The Place of Corporations in a New Constitution For Aotearoa | Legal Personality | Corporations

The Place of Corporations1 in a new Constitution for Aotearoa

(A Primer, by Catherine Davis, concerned citizen) 1. Introduction

1.1. Corporations (or associations of people) or companies hold a disproportionately advantageous economic and legal position relative to human citizens in society today. On the one hand, they are „legal persons‟, which mean they enjoy many of the same legal rights that persons do, such as the ability to carry on business, own and protect its property, sue others for violations against it, etc. 1.2. On the other hand, their paramount objective in the overwhelming number of circumstances is profit maximisation above all else; and the legal system enables corporations to lawfully violate recognised ethical standards regularly enforced against human persons (e.g. for environmental protection and human rights) while limiting the liability (“Ltd”) of its human stockholders thereby often avoiding true accountability for their actions (corporations have no physical body to imprison when they commit a crime, for example). Moreover, too often, corporations wield an unacceptably large degree of lobbying influence over political decision-making and in so doing circumvent and weaken the (so-called) democratic power of the people (the primary mechanism for determining the Government Agenda is meant to be democratic elections where citizens of voting age have their say). 1.3. The advantageous situation of corporations in today‟s society is so perverse, it‟s a wonder citizens haven‟t demanded it be corrected before now. Certainly, there is no justification for this inequitable situation to continue. And with the opportunity to design a new constitution for Aotearoa, a consideration of high priority must be to protect environmental and human values against the propensity for harmful corporate behaviour. 2. Pathological Behaviours

2.1. What are some examples of corporate pathological behaviour? If the case histories of many corporations around the world were to be analysed from a psychological perspective, we‟d see a clear tendency towards systematic pathological corporate behaviour. In individuals, this would result in incarceration by the „authorities‟ to protect society. But corporations, on the other hand, are allowed to – and the law enables them to - continue their pathological behaviour (sometimes,


Ref (among other sources) the DVD “The Corporation” (2006),

such behaviour is interrupted by corporations being caught and having to pay a financial penalty, but over time they often return to their bad habits). Some examples are as follows: a. Callous disregard for the concerns and suffering of others: Refusal to ensure even the most basic of employment conditions (no minimum wage, long working hours, unsafe working conditions…). Incapacity to maintain enduring relationships: Many Corporations exploit the resources of an area – including human labour and/or the environment. Eventually, when resources are exhausted (often, leaving the area and/or its people worse off) they abandon the site to re-locate to the next area to exploit. Reckless disregard for the safety of others: Corporations pollute the environment (mining, industry waste), and make products that contribute to illness and even death (e.g. cigarettes, pesticides, food products…). Deceitfulness: repeated lying and conning of others for profit: Corporations often knowingly lie about the harmfulness to people and the environment of their activities and products. Incapacity to experience guilt: Corporations routinely even knowingly cause harm, but they just continue their behaviour, or if caught, just pay the penalty and factor it in as a drag on their bottom line profits. They show no remorse. Failure to conform with social norms with respect to lawful behaviours: Whether corporations obey the law or not is often simply a business decision: “Is the cost of the fine or the loss to our good will in the market place if we get caught greater than the profit we could make from this behaviour?” If the cost is greater, we will comply – if not, we will flout the law and pay the penalty (if we get caught).







"Negative Externalities"

3.1. „Negative Externalising‟ is an economic mechanism whereby companies and businesses pass on the “costs” of goods or services production to third parties irrespective of whether they (1) are a consumer or producer of that good or service, or (2) gave their permission to bear the burden of that cost. 3.2. For example, a company might interfere with traditional fish spawning grounds or migration paths as a result of building a hydro electricity dam, the COST of which is a reduction in the fishery for the local community who rely on them as a traditional food source. Or – the Rena sea vessel might run aground at Tauranga, spilling cargo and leaking oil into the environment, leaving it for the local community to clean up.

3.3. Conversely, the company‟s palming off of this cost translates as a BENEFIT to those same companies doing the damage (for example, increased profits because they don't have to make efforts to comply with best practice environmental standards, and they aren't forced to pay the REAL price of environmental damage). What a sweet arrangement! Legalised Theft 3.4. This legislated 'arrangement' actually makes such mechanisms lawful to operate. But, it's basically legalised THEFT. Why? Because theft is someone taking something of value from you without your permission. And if I'm having to contribute my value (tax dollars, my disposable income, my time) to clean up YOUR mistake, without YOU securing my agreement first - it's THEFT! Or, extend that out to 'community': if a clean awa or river is 'the commons', and all people have a right to enjoy a clean awa, then YOU come along and dirty up that awa causing the local community to have to pay to clean it up…you've just taken something from us without out permission: it's THEFT! 3.5. Someone once said, all you have to do is 'track the money', and you'll know who's benefitting. There you'll find the perpetrator/s. As Māori, and as caring citizens, we say "No!" to family violence. COMPANY THEFT BY NEGATIVE EXTERNALITY is not only wrong, it's a form of violence - a violation of citizens' rights, a violation of Māori ability to exercise our kaitiaki responsibilities, a violation against Papatuanuku. 4. Summary

4.1. As one of the key dominant institutions of our time, corporations are inherently predisposed to fit the psychological profile of, and behave like, a social psychopath. Corporation‟s behaviours are a form of taxation without representation levied by generations yet to be born, a form of intergenerational tyranny. Where is the accountability? Shouldn‟t corporations be held to the same standards of accountability as human „persons‟? And how should that accountability be effected? Should the people who have interests in it (e.g. stockholders) and who are leading the decision-making within the corporations (e.g. Directors) be held more directly accountable? Should Governments have the ability to end the „life‟ of Corporations that routinely violate basic ethical standards by shutting them down? 4.2. These are some constitutional questions worth considering. ENDS

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