Corporate Rights vs. Human Need
Rachel's Environment and Health Weekly, November
(Environmental Research Foundation)
P.O. Box 5036, Annapolis, MD 21403
Fax (410) 263-8944; E-mail: firstname.lastname@example.org )
For many years, the potential market for baby foods and infant
formula in the "developed" countries has been shrinking
because birth rates have declined. Therefore, to create new demand
for their products, baby food corporations have aggressively sought
to "open new markets" in the Third World.
A key vehicle for "opening new markets" is advertising
intended to convince women that breast-feeding their babies isn't
"modern" and bottle feeding is healthier. Of course
the premise of such advertising is medically false -- breast-feeding
provides superior benefits compared to all synthetic substitutes.
(Breast-feeding provides an infant with significant immunity against
disease; it creates a strong emotional bond between mother and
child; it helps prevent breast cancer in the mother, and more.)
Nevertheless, many women are taken in by the false advertising;
as a result, according to the United Nations Children's Fund (UNICEF),
only 44% of infants in the Third World are breast-fed. (The proportion
is even smaller in "developed" countries.)
Chiefly because of this false advertising, according to UNICEF,
1.5 million infants die each year because their mothers unwittingly
prepare infant formula with contaminated water, causing fatal
During the 1970s, a world-wide grass-roots campaign focused
attention on this problem, boycotting products made by Nestle,
a major manufacturer of infant formula.
Partly because of the Nestle boycott, the World Health Organization
(WHO) developed and published a Code on Marketing of Breast-Milk
Substitutes. The WHO code prohibits words like "humanized
breastmilk" and "equivalent to breastmilk." Furthermore,
to protect illiterate women from being duped, the WHO code prohibits
pictures on labels "that idealize the use of bottle feeding."
In 1983, Guatemala passed a law and regulations incorporating
the WHO code. The goal of the Guatemalan government was to encourage
new mothers (1) to breast-feed their infants and (2) to fully
understand the threats to their babies of using infant formula
as a substitute for breast milk. The Guatemalan law prohibited
the use of labels that associated infant formula with a healthy,
chubby baby; specifically, the law prohibited pictures of idealized
babies on packages of baby food intended for children younger
than 2 years. Furthermore, the Guatemalan law required labels
to carry a statement that breast-feeding is nutritionally superior.
The law also prohibited baby food manufacturers from providing
free samples of their products (if a baby starts taking free samples
the mother stops lactating, thus converting mother and infant
into full-time, paying customers). And finally the law prohibited
baby food manufacturers from directly marketing their products
to young mothers in the hospital.
The regulations went into effect in 1988 and all domestic
and foreign manufacturers of baby foods -- with one notable exception
-- came into compliance. Infant deaths attributable to bottle
feeding declined, and UNICEF began highlighting Guatemala as a
model for what works.
However, the U.S. baby food manufacturer, Gerber (motto: "Babies
Are Our Business"), objected to Guatemala's new law. Although
the Guatemalan Ministry of Health made numerous attempts to negotiate
with Gerber, the company reportedly continued to market its infant
formula directly to mothers in the hospital, and continued to
give free samples to doctors and day care centers.
Most importantly Gerber refused to remove its trademark picture
of a chubby, smiling baby from its product labels, and it refused
to add a phrase saying breast milk was superior. In sum, Gerber
thumbed its nose at Guatemalan health authorities, who were trying
to protect their most vulnerable citizens, infants, against harm.
In November, 1993 -- ten years after Guatemala passed its
law, and five years after its regulations went into effect --
Gerber lost its final appeal. A Guatemalan Administrative Tribunal
ruled in favor of the Ministry of Health and it looked as though
even Gerber would have to comply with the Guatemalan law.
But Gerber opened a new line of attack on Guatemala, arguing
that the Guatemalan law was illegal under international statutes
because the law was really an "expropriation of Gerber's
trademark." This tactic bought Gerber some time while the
World Trade Organization was being created. Then in 1995, when
the WTO came into being, Gerber dropped its claim about illegal
expropriation of its trademark and began threatening to challenge
Guatemala before a WTO tribunal.
Within a short time, Guatemala realized it was now up against
immense power and the Guatemalan government changed its law to
allow Gerber to have its way. Gerber won without ever having to
formally request that the U.S. take its case to the WTO. Just
a few letters containing the WTO threat were sufficient.
This example illustrates another marvelous feature of the
WTO -- the ease with which small, poor countries can be intimidated
by transnational corporations into "opening their markets."
Under WTO rules, countries must open their markets to foreign
corporations and governments cannot establish, as a precondition
of doing business, that their domestic laws will be respected.
In effect, the WTO has given corporations a powerful new way to
challenge the laws of any government (federal, state or municipal).
Many poor countries, including Guatemala, cannot afford to
support a full-time delegation to monitor the WTO in Geneva, Switzerland.
Nor can they maintain in-house legal expertise on fast-changing
WTO rules. They could legally hire outside counsel and experts
to defend themselves against a WTO challenge but the cost of such
a defense would be several million dollars. Countries that know
the ropes in Switzerland and have money to burn can use procedural
ploys that make the WTO a very expensive arena in which to litigate.
For example, one country can challenge the credentials of another
country's delegation, thus prolonging the proceedings indefinitely.
As Ralph Nader's organization, Public Citizen, has written, "The
WTO practice of allowing rich adversaries to object to the delegations
of poor countries undermines poor countries' meaningful participation
in the WTO -- and makes threats of WTO challenges enormously powerful
tools to forestall the adoption of public health safeguards by
poor countries that need them the most."[1,pg.117]
The pharmaceutical corporations in the U.S. and Europe evidently
learned an important lesson from Gerber's victory over Guatemala.
The drug corporations have launched a campaign of threats against
countries that are trying to make medicines more affordable and
accessible to their citizens. South Africa, Thailand and India
In 1997, under the leadership of Nelson Mandela, South Africa
passed a Medicines Law which has not yet taken full effect. When
all the provisions of the law are implemented, it will encourage
the use of low-cost generic drugs, and it will prohibit drug companies
from paying bounties to doctors for prescribing particular drugs.
The Medicines Law has two additional provisions that the pharmaceutical
corporations find particularly distasteful:
(1) the law requires drug companies to license their products
to other companies who must then pay a royalty fee to the drug's
developer. Such a law encourages competition in the manufacture
of new drugs, thus making modern drugs available at reduced cost.
(2) The second provision is called "parallel importing"
and it allows a pharmaceutical product to be imported from several
different countries simultaneously, thus taking advantage of the
lowest prices available. For example the antibiotic Amoxicillin
costs 50 cents per tablet in South Africa, 30 cents in New York
and only 4 cents in Zimbabwe.[1,pg.114] South Africa's new law
would make Amoxicillin cheaper and thus more widely available
to the people of South Africa, many of whom are poor.
Transnational pharmaceutical corporations, with assistance
from the Clinton/Gore administration, are now using threats of
WTO action to force South Africa to repeal its Medicines Law.
When AIDS activists protested the Clinton/Gore administration's
role in trying to overturn South Africa's Medicines Law, a "senior
Gore advisor" issued a statement defending Mr. Gore: "Obviously
the Vice President's got to stick up for the commercial interests
of U.S. companies."[1,pg.121] Mr. Gore is doing more than
merely sticking up for U.S. corporations. U.S. State Department
memos describe a "full court press," led by Mr. Gore,
to force South Africa to "repeal, suspend, or terminate"
its Medicines Law. As the U.S. sees it, there is simply no choice
-- under WTO rules, the intellectual property rights of corporations
have higher priority than human health; this is, in fact, a correct
interpretation of WTO rules. However, Mr. Gore seems to recognize
that his campaign against medical care for the poor in South Africa
might come back to bite him. When pressed by the group ACT-UP
in June 1999, Mr. Gore issued a statement denying that he was
pressuring South Africa.[1,pg.123].
The South Africa case is not unique. In 1992, Thailand established
a Pharmaceutical Review Board which established compulsory licensing
for medicines. A firm with an exclusive patent on a critical medicine
was required to license other companies to manufacture it, with
royalties paid to the patent-holder. This created competition
and drove down the price of critical medicines for the people
of Thailand, such as Pfizer's Flucanazole, used to treat meningitis.
After compulsory licensing, the cost of treatment with Flucanazole
dropped from $14 per day to $1 per day in Thailand. However, the
U.S. pressured Thailand relentlessly for 7 years until the Thai
Pharmaceutical Review Board was formally abolished. The U.S. argued
successfully that such a Board is illegal under WTO rules.[1,pg.113]
Under WTO rules, corporate intellectual property rights have higher
priority than human health.
For many years, India had a law making it illegal to patent
a substance "intended for use, or capable of being used,
as a food or as [a] medicine or drug."[1,pg.105] A WTO tribunal
ruled in 1997 that India's law is illegal. Using the WTO as a
battering ram, the U.S. successfully pressured India to abandon
its prohibition against patenting food and pharmaceuticals.
Now W.R. Grace has filed for a U.S. patent on a pesticidal
byproduct made from the Neem tree, which grows only in India.
Neem has been used for centuries in India to make medicines and
bio-pesticides. Indeed, the Neem tree is nicknamed "the village
pharmacy." W.R. Grace claims that it has a new method of
producing the pesticides that indigenous people have produced
for hundreds of years. Grace now says it deserves the exclusive
right to sell the products that were developed by indigenous communities
-- and Grace argues that under WTO rules the government of India
has an obligation to enforce Grace's patent rights.[1,pg.110]
It appears that the WTO is a nearly-perfect vehicle for extending
corporate dominance into every corner of the world. But the corporations
are not yet satisfied. The purpose of the WTO meeting in Seattle
November 29-Dec. 3 is to consolidate and extend the WTO's power
even further. To get involved, phone toll-free 1-877-STOPWTO.
 Lori Wallach and Michelle Sforza, WHOSE TRADE ORGANIZATION?:
CORPORATE GLOBALIZATION AND THE EROSION OF DEMOCRACY (Washington,
D.C.: Public Citizen, Inc., 1999). ISBN 1582310017; telephone