US companies breaking environmental laws can now obtain federal contracts

The Bush Administration has caused fury by overturning a ‘blacklist’ rule introduced by former President Bill Clinton during the final days of his tenure in January 2000, which prevented companies that had broken labour, civil rights, environmental and consumer protection laws, from obtaining lucrative federal contracts.

The ‘blacklisting’ rule was suspended in April 2000, by the new Bush Administration, whilst being reviewed. This latest decision has revoked the rule permanently.

The American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), the voluntary federation of the US’s trade unions, representing 13 million workers, is angered at the ruling. “It is an outrage for the Bush Administration to revoke the contractor responsibility rules designed to protect the public and the government from corporate contractors that do not respect labour, civil rights, and environmental laws and consumer protections,” the organisation in a statement.

According to AFL-CIO, the rules were carefully put together over three years by the Clinton Administration with substantial public and government agency input, and states that studies have shown that these rules are needed to make corporations accountable.

The organisation states that US General Accounting Office figures show that during one year, 261 federal contractors with over 5,100 violations of health and safety laws received US$38 billion in federal contracts. Eighty firms that had broken US labour laws also received US$23 billion.

“It is hypocritical for the Bush Administration, a strong proponent of individual responsibility in the area of law enforcement, to look the other way when corporate contractors violate laws enacted to protect the public,” said AFL-CIO.

However, the US Chamber of Commerce has welcomed the decision, which was published at the end of December in the Federal Register, stating that the former rule had given government agents blanket discretion to “blacklist federal contractors based on subjective and arbitrary notions of satisfactory compliance with any federal, state, or even foreign law”. “Mere allegations of wrong-doing could prevent a business from winning a federal contract,” said Randel Johnson, Chamber Vice President for labour and employee benefits.

“Government agents could have wielded virtually unlimited power under this rule,” said Johnson. “The number of laws, pages of regulations and court cases coming within this regulation was countless; and government contracting would have become even more complex, cumbersome and protracted than it already is.”

Nevertheless, AFL-CIO is adamant that the decision is wrong. “By overturning these contractor responsibility rules, the Bush Administration has made it easier for more corporate lawbreakers to rake in lucrative federal contracts in the future,” said the organisation. “And to ordinary citizens who play by the rules every day, the Bush Administration has said that it’s okay for corporations that violate the law to be rewarded with millions of taxpayer dollars.”

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