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Prizing Open the Profit-Making World

By Richard Calland | June 12, 2007

This chapter is excerpted from The Right to Know: Transparency for an Open World, Ann Florini, ed. (New York: Columbia University Press, 2007).

INTRODUCTION

Transparency is now a generally accepted norm for the democratic state, understood to be essential for democracy, of significant instrumental value in enhancing efficiency in public administration, and crucial to the effective exercise of other rights. There has been a huge amount of activity and progress in recent years, with government action matching civil society activism to promote the right to know. More than fifty laws creating some sort of legal right to access public information have been passed since 1995.

This focus on the public sector leaves out large, and growing, amounts of relevant and important information held by private entities. For while the case for transparency in the public sphere has been successfully made and in many places implemented, public power has seeped into a new range of institutions and bodies. Because of the massive trend toward privatization, goods and services once provided by the state, or at least considered to be state responsibilities, are now provided by private firms under various arrangements with governments. As Roberts notes, in the last quarter of the twentieth century "authority has flowed out of the now-familiar bureaucracy and into a new array of quasi-governmental and private bodies. The relocation of authority has provoked another doctrinal crisis: the old system of administrative controls, built to suit a world in which public power was located within government departments and agencies, no longer seems to fit contemporary realities." Like archaeologists who finally locate the buried tomb of Egyptian King Rameses II but, when they prize open the door, find that the riches within have been long since looted, advocates for government transparency will now find that much public information has been spirited away into the hands of the private sector.

In addition, there is growing awareness that the public effects of many private sector activities (e.g., environmental effects) warrant public scrutiny, and disclosure is increasingly seen as a potentially effective regulatory tool. Many corporations have begun to operate voluntary disclosure regimes in response to civil society demands and the "corporate social responsibility" (CSR) context. Yet disclosure of private-sector information is haphazard at best, with little consensus on what business should be required to disclose. This presents a significant challenge to the advocates for transparency, from both an instrumental and a philosophical, human rights–based perspective.

These two issues—privatization and the trend toward disclosure of environmental, labor, and other information in the CSR context—raise powerful questions. Should corporations that are playing quasipublic roles and providing public goods and services be held to the same standards of public transparency and accountability as their public sector brethren? Does voluntary disclosure of environmental and other social impact information adequately fill the existing regulatory gap, or should such disclosures be standardized and made mandatory? Who decides, and on what basis?

This chapter addresses these questions in turn. It lays out the history of and reasoning behind corporate secrecy and describes the trends that have occasionally pushed for greater openness. It then takes in turn the concerns raised by privatization and by civil society demands for greater corporate social responsibility. It explores the rapidly changing legal regimes concerning corporate transparency in many parts of the world, with special attention to the case of South Africa, one of the few countries that specifically extends its right-to-know law to cover the private sector.

Download: Prizing Open the Profit-Making World (PDF, 145.43 K)

Read More: Business, Democracy, Governance, south africa, africa

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