Privatization and public procurement
A prime object of capture by corporations are the decision-makers who decide on privatization and procurement matters.
According to Philip Alston, the former U.N. Special Rapporteur on extreme poverty and human rights, “Privatization is a process through which the private sector becomes increasingly, or entirely, responsible for activities traditionally performed by government, including many explicitly designed to ensure the realization of human rights. It can take many forms, ranging from the complete divestiture of government assets and responsibilities to arrangements such as public-private partnerships.”
During the Covid-19 Pandemic, the public procurement of healthcare and medical equipment was on full display, as the wall traditionally separating the public and private sectors crumbled away. States sought to produce vaccines and protect their citizens as fast as possible, which often meant the “privatization of healthcare services/medical assistance; protection of intellectual property; lack of transparency in contracts related to healthcare services/medical assistance; [and] the diversion of emergency funds by the wealthiest 1% at the expense of people’s health and healthcare workers, most of whom are women”. (ESCR-Net, “Corporate Capture of Our Healthcare Systems Derails Health Equity“)
Corporate capture not only targets State-owned enterprises for privatization or lucrative public contracts, but also works to undermine the State in other ways so as to increase dependency on corporations. According toConectas(Brazil), “Corporate capture is also [pressures] for the forced dismantling of the services provided by public companies and the widespread broadcasting of corruption scandals involving them to gain public support for privatization. This mainly occurs when the public company monopolizes the activity or when its market position tends to be greater than that of the private sector.”
Alston also argues that “Most definitions of privatization are of limited utility, because they fail to capture the deeper processes of value transformation that are at play. Narrowly conceived, privatization involves full divestiture, through which ‘all or substantially all the interests of a Government in a utility asset or a sector are transferred to the private sector’, even if some form of governmental regulation or oversight is maintained. More broadly, the term can cover any private sector involvement in public service provision.”