Lifeworth 2001 Review of Corporate Responsibility
Home | Introduction | January - March | April - June | July - September | October - December | Footnotes
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July - September
International perspectives at Warwick
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Compact news
The Global Compact, a UN programme intended to help businesses become better corporate citizens, celebrated its first anniversary on 26 July with more than 300 corporate partners, up from 44 at its launch. New UN Assistant Secretary-General Michael Doyle outlined the idea is to use the Global Compact website as the foundation for a learning network where companies can share best practices on CSR. 'It's going to be a genuine learning exchange', he said. Earlier in the month his predecessor, John Ruggie, explained to Warwick University, UK's 4th Annual Corporate Citizenship Conference the plans for the Global Compact Learning Forum, to be based at the university. Professor Ruggie explained that the Compact 'has explicitly adopted a learning approach to inducing corporate change, as opposed to a regulatory approach'. More of his thoughts are summarised in the review of the Warwick conference more
After the anniversary, it became clear that some environmental and human rights groups were disappointed that the Global Compact would not be doing more than acting as a learning forum. 'Viewing the program solely as a learning experience represents a wasted opportunity in assuring corporate responsibility,' said Arvind Ganesan, the director of business and human rights programmes for Human Rights Watch. 'The progress we expected on moving beyond just a learning forum hasn't occurred yet.'
While the analysed process of reviewing case studies submitted by signatory companies will be by Warwick University's Corporate Citizenship Unit and staff at MIT, some NGOs have produced their own analyses of the conduct of those companies. The website CorpWatch offered a series of case studies, starting with a study of Aventis, the biotech firm whose StarLink genetically modified corn was found to have strayed into the food supply. CorpWatch argued that this meant Aventis violated the Global Compact's precautionary principle, which implies that no products should be marketed if effects on health and the environment are unknown. More case studies are promised in the coming months. 1
In addition to its learning role, the Global Compact is also proving to be a mechanism for involving corporations in intergovernmental conferences on social and environmental issues. For example, in August United Nations Secretary-General Kofi Annan and United Nations High Commissioner for Human Rights Mary Robinson hosted a panel at the World Conference Against Racism to discuss the impact of racism and discrimination in the workplace. The dialogue sought to draw attention to private-sector initiatives that promote equality and inclusion in and out of the workplace. Participants included representatives of Volvo Car Corporation, the International Confederation of Free Trade Unions, Eskom (South Africa), Satyam Computer Services (India), the United Nations Environment Programme and the International Labour Organisation. 2 Kofi Annan was 'encouraged by the commitment of Compact participants who have agreed to throw their considerable weight behind the cause of diversity and non-discrimination.'
One company that had come under fire on racism and diversity issues announced a $7.8 billion minorities programme. Toyota Motor Corporation was attacked in the US by Rev. Jesse Jackson following an advertisement that was accused of being racially offensive. The funds will add new minority-run dealerships each year and increase spending on minority advertising, job training and community support. The announcement puts flesh on the deal reached between the company and Jackson earlier in the year to avoid a threatened boycott against the car-maker.
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Climate for change
In the heat of July in Germany, delegates managed to agree to proceed with the climate-cooling Kyoto Protocol, without the world's biggest polluter, the United States. As the ink was drying, the protocol was already creating heated debate within the business community, especially in large organisations where parent companies and subsidiaries had opposing views. For example, Swedish auto-maker Volvo publicly supported Kyoto while its parent company in the US, Ford, did not. Coca-Cola, like Ford, belongs to the US Council for International Business, which opposed Kyoto. But Coca-Cola's subsidiary in Spain endorsed the treaty. Pedro Antonio Garcia, from the Spanish subsidiary, said, 'You cannot operate if you are against the Kyoto Protocol in a European context. It's the price of entry.' In the US, Executive Vice President of the National Association of Manufacturers (NAM), Michael Baroody, wrote to George W. Bush, 'thanking' him for his opposition to the agreement. 'On behalf of 14,000 member companies of the NAM - and the 18 million people who make things in America - thank you for your opposition to the Kyoto Protocol on the grounds that it exempts 80 percent of the world and will cause serious harm to the United States.' 3 Baroody made selective use of statistics. He calculates 80% based on population, not total carbon emissions, 25% of which are produced by just 4% of the world's population living in the United States. "Some US businesses with overseas operations may wonder if they've missed out on a commercial opportunity in the Kyoto Protocol" When President Bush dismissed the Kyoto climate change treaty as 'fatally flawed', he meant to spare companies such as the members of NAM from paying to control pollution. But, now that about 180 countries have pushed ahead without the US, some American businesses with overseas operations are left wondering if they've missed out on a commercial opportunity. This is because that, under the treaty, companies that reduce their own emissions of greenhouse gases can sell credits to other companies whose emissions are growing. Although criticised by many environmentalists as letting big business off the hook, this new system means that money will be made from reducing carbon emissions. 4 No wonder, then, that a new initiative established to help companies express their support for the Kyoto Protocol had generated significant support. Signatory companies of Emission55.com 'call on the governments of the world to ensure the entry into force no later than 2002 of the Kyoto Protocol. This will require ratification of the Protocol by at least 55 countries responsible for 55% of the carbon dioxide (CO2) emissions from industrialised countries.' A diverse range of companies have already signed, including Otto Versand, Ricoh and the Credit Suisse Group. 5 Meanwhile, the world's largest oil group, ExxonMobil, which trades as Esso in many European countries, was beginning to show signs of concern over the StopEsso.com campaign. ExxonMobil is considered a big influence on the Bush administration because, critics say, it helped bankroll the Bush presidential race to the White House. The StopEsso.com campaign widened to include Germany, Norway and New Zealand as well as Britain, where it started. While ExxonMobil representative Lauren Kerr stated that the company did not expect a significant impact, a spokesman for Esso UK told The Guardian newspaper that they were 'concerned about the boycott'. The newspaper reported that the company was planning a public relations strategy to try to 'win back customers'. 6 Their strategists might want to look at a new survey that found some 80% of adults take corporate responsibility into account when making purchasing decisions, and 70% do so when making investment decisions. 7 As The Body Shop began daubing 'StopEsso' straplines on company trucks, corporate lines were also being drawn. "Corporate beauty is in the eye of the beholder" The problem, of course, is that different people have different social and environmental concerns. In its September issue, the US-based Sierra magazine assessed the environmentalists' best choices for green gasoline companies. The article ranked oil and gas companies not just on the climate change issue, but on a range of human rights and environmental commitments and practices. The key issue for Sierra was some companies' plans to drill in the Arctic National Wildlife Refuge, leading to BP, Chevron, Phillips Petroleum and, yes, ExxonMobil, being named the 'Dirty Four'. 8 Corporate beauty is in the eye of the beholder.
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Humane resources
It's one thing to focus on consumer and investor concerns; but perhaps equally important is how company staff feel and react to their employer's position and performance on social and environmental issues. Business Ethics magazine reported that companies making job offers to prospective employees might find themselves faced with questions about the firm's environmental commitments. A growing number of employees - nearly 100,000 - have signed up to the activist website Ecopledge. com, making a commitment to reject job offers at corporations that 'fail to take specific, positive environmental actions identified by Ecopledge.com researchers'. Among the steps identified are stopping the sale of polluting products, increasing recycling, and ending controversial developments. Companies targeted by Ecopledge include Boise Cascade, BP Amoco, Coca-Cola, Citi-group, DaimlerChrysler, Dell, Disney, Nestlé, PricewaterhouseCoopers, Sprint and Staples. "Many professionals need a purpose beyond the paycheck" Further reinforcement of this trend came with publication of the third annual POLLARA survey for the Women's Executive Network which showed that the most important factor attracting women executives to an employer is the organisation's ethical conduct. The organisation, Canada's largest public opinion and marketing research forum, found that women placed ethics ahead of other factors such as the quality of the organisation's leadership, the quality of its products and services, its overall reputation, and remuneration. So it seems that many professionals do need a purpose for the paycheque. For example, Nick Wright of UBS Warburg, the investment banking division of UBS, told the Warwick Corporate Citizenship Conference that 50% of all applicants asked about corporate responsibility during their interviews. And a survey of 255 UK employees by the Industrial Society found that more than half claimed to have chosen the company they work for because they 'believe in what it does and what it stands for'. Study author Stephanie Draper, head of corporate social responsibility at the society, said a tight UK employment market is putting pressure on companies to become 'employers of choice'. (Despite fears of a recession in the US, the labour market in the West remains tight, especially for highly skilled individuals.) The findings 'challenge prevailing recruitment and retention strategies which centre on pay and benefits,' she added. 'Other priorities such as ethics and reputation are now playing a more important role.' It is therefore no surprise that Lifeworth.com reported high uptake in its new CSRJobs Bulletin, which lists job opportunities in the corporate responsibility field. It reached over 1,000 subscribers within a month of launching its service. 9
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SRI 'R' US
Socially responsible investment (SRI) research bodies from 12 countries joined forces to provide data on companies' social and environmental performance for institutional investors. The Sustainable Investment Research International (SiRi) group explained that it will offer standardised profiles of the largest 500 global companies as well as SRI consultancy services. SiRi will have a combined total of 100 researchers to draw from, who will focus on environmental performance, employment practices, customer relations, community involvement, governance standards and supply chains. The group spent the previous year standardising the research practices of its members, who will pool their research on companies in the FTSE Eurotop 300 index, Standard & Poor's 100 in the US, and 100 Canadian and Japanese corporations. Each member will continue to research its respective national markets. The partners are: Kinder Lydenberg Domini from the USA, AReSE (France), CentreInfo (Switzerland), Caring Company (Sweden), Scoris (Germany), Triodos Bank (Netherlands), Michael Janzi Associates (Canada), Avanzi (Italy), ECodes (Spain), Stock at Stake (Belgium), the Sustainable Investment Research Institute (Australia) and the Pensions Investment Research Centre (UK). The plan is that they will be joined by a Japanese partner. 10 Indications that interest in SRI is growing in Japan came when the first Japanese bank signed up to a United Nations statement on sustainable development. By signing the UN Environment Programme (UNEP)'s 'Statement by Financial Institutions on the Environment and Sustainable Development', the Development Bank of Japan (DBJ) committed itself to a 'precautionary approach' to environmental management. The statement, set up in 1992, also requires the state-owned bank to recognise that 'sustainable development depends upon a positive interaction between economic growth and environmental protection'. Most of the 171 financial institutions that have signed to date are European, so UNEP hopes that DBJ's lead will increase the number of Asian signatories. Deputy governor of DBJ, Takashi Matsukawa, said the bank would help UNEP to get other financial institutions in Asia involved. 11 Efforts such as this, aimed at increasing the profile of SRI in the South are important. Given the limited experience and capacity the South has in this field, it is understandable yet regrettable that no Southern groups are involved in the SiRi initiative at this stage. Although the key financial centres are in the North, most quoted companies have extensive operations in the South, where their positive and negative impacts need to be researched, analysed and prioritised by independent and informed local people. As investors' interest in information that is credible to a broad range of local and global stakeholders grows, so this may become a more serious issue. more
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Branding criticism
Echoing concerns from leaders in the private sector that NGOs are sometimes too quick to condemn companies that begin working on corporate responsibility, a representative of Amnesty International (AI) called on NGOs to give the benefit of the doubt when companies make public statements about their aspirations on human rights. Writing in the third Visions of Ethical Business, edited by Warwick Business School's Malcolm McIntosh, AI's business group manager Peter Frankental argued that 'when a company associates itself with values of any kind it is often making a statement of how it wishes to be perceived, rather than of what it actually does'. This, he explained, 'creates a gap between aspirations and reality ... which causes many NGOs to dismiss aspirational statements as a public relations exercise'. He warned that, if NGOs reject a company's aspirational statements, they risk 'throwing the baby out with the bath water', as before a company can integrate social values into its operations it must develop the aspiration to do so. Considering the importance of corporate reputation and branding, Frankental suggested that 'a company that ties its flag to the mast of human rights is offering a hostage to fortune. If it fails to deliver on its stated commitments, its credibility will be at stake.' 12 This issue arose at a seminar on corporate power and globalisation hosted by Respect Europe. Delegates from NGOs and corporations discussed how NGOs are often dependent on the media for communicating their message, and that this can affect the way they talk about companies. To be heard, NGOs must 'brand' themselves and their criticisms as much as companies brand themselves and their products or services. Hypocrisy is a better story than mere malpractice, so NGOs and activists may find it easier to attract media attention if they focus on those companies that say they are addressing the issues. 13 This reveals the complexity involved with communicating corporate responsibility policies, and the importance of developing understanding with NGOs. "Hypocrisy is a better story than malpractice"
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The politics of partnership
In July, August and September, a spate of publications appeared that analysed the proliferation of corporate codes of conduct. In a new book from the Carnegie Endowment for International Peace, Virginia Haufler explores codes of conduct across three different policy arenas: environment, labour and information privacy. 14 She identifies the common driving forces for, challenges to and questions from the increasing application of voluntary codes of conduct. In the magazine Foreign Policy, an article described an emerging 'NGO-Industrial Complex' constituted by businesses and NGOs working together on ethical codes of conduct and certification. 15 'While certification will never replace the state, it is quickly becoming a powerful tool for promoting worker rights and protecting the environment in an era of free trade', argue Gary Gereffi, Ronie Garcia-Johnson and Erika Sasser. The UN Research Institute for Social Development (UNRISD) previously theorised these relationships as forms of 'civil regulation' - the quasi-regulation of business by civil society. 16 It followed up this work with a new report welcoming developments in corporate codes of conduct and certification, but warning of the 'danger that codes may be seen as something more than they really are'. Report author Rhys Jenkins cautions that they 'can be used to deflect criticism and reduce the demand for external regulation. They can also undermine the position of trade unions in the workplace.' He argues 'how vitally important it now is to develop strategies to ensure that codes are complementary to government legislation and provide space for workers to organise'. 17 A new report funded by the Aspen Institute's Nonprofit Sector Research Fund suggests that NGO involvement in codes of conduct and certification can be challenging and lead to conflict within civil society. The report chronicles both the difficulties and successes faced by Rainforest Alliance in certifying Chiquita Brands International plantations with its Eco-OK scheme. 18 Collaborative relations between the private sector, governments and NGOs is the subject of a new report from the World Bank's 'Business Partners for Development' (BPD) project. Endearing Myths, Enduring Truths draws on partnership examples in natural resources, water and sanitation, road safety and youth development, to argue that tri-sector partnerships 'benefit the long-term interests of the business sector while meeting the social objectives of civil society and the state by helping to create stable social and financial environments'. 19 The World Bank's BPD is one of a number of organisations promoting the concept of inter-sectoral partnership. In the UK, the International Business Leaders Forum (IBLF) launched the 'Partnership Brokers' website, which is intended to act as a resource for partnership-building. 20 In the US, new specialist agencies have appeared in this field. 21 The Copenhagen Centre is also actively promoting the idea of inter-sectoral partnership. At the end of June, 400 people from all sectors gathered in Copenhagen to hear Danish Prime Minister Poul Nyrup Rasmussen's speech on 'Partnerships and Social Responsibility in the New Economy'. Mr Rasmussen said that Europe and the European Union is in a 'unique position to take a major step forward in implementing and mainstreaming corporate social responsibility and public-private partnerships.' 22 These groups advocate that at local, national and international levels partnership-building has emerged as the approach most likely to bring about truly sustainable development. They argue that bridge-building between the public sector, the private sector and civil society is effectively promoting social cohesion, environmental stability and equitable economic growth. Proponents point to projects such as Togo's first Cisco Networking Academy, opened at the University of Lomi in August. That project is part of a global effort by the United Nations Development Programme (UNDP) and Cisco, the leading supplier of computer network routing equipment, to set up Networking Academies in 29 of the world's 49 least-developed countries by the end of 2001. There are now more than 70 innovative international public-private partnerships, according to a recent inventory by the Geneva-based Initiative on Public-Private Partnerships. Although many would welcome such initiatives for IT development, not everyone working on corporate responsibility shares the view that public-private partnerships are always desirable. Some are concerned that public-private partnerships can mask the commercialisation of sectors that had hitherto been the preserve of the public sector, such as water, health and education. Julian Liu of the Center for Economic and Social Rights argued in a letter to The New York Times that "international financial institutions and multinational corporations are pushing privatization plans that transform water from a common resource available to all into a commodity for purchase. The result: low-income communities around the world are forced to seek water from polluted and untreated sources, leading to needless deaths from waterborne diseases. For these reasons, international human rights law recognizes the right to water as an essential component of the rights to life and health. Government and business should also recognize that the right to safe drinking water must neither be bought nor sold." The World Health Organisation (WHO) has also realised the sensitivity around this issue, dedicating the August edition of its Bulletin to the question of public-private partnerships for drugs and vaccines. 23 WHO argued that 'partnerships between the public sector and private enterprise can bring wide benefit in terms of improved health, but there must be safeguards to make sure that their prime focus is healthier populations rather than richer companies'. Overcoming just three of the world's biggest killers - tuberculosis, malaria and HIV/AIDS - requires action by both governments and the private sector, according to the Bulletin editor-in-chief Richard Feachem. 'Either alone will be insufficient', Feachem warned. Public-private partnerships can increase the chances that the biotechnology revolution will benefit not only the rich but also poorer populations, he said, so long as the respective energies and expertise of both sectors are efficiently harnessed to attain their common objectives. Writing from his experience as chief scientific officer of the Medicines for Malaria Venture, Robert Ridley urged commentators to focus less on the differences between public and private bodies and more on the opportunities that partnerships can offer. The aim, he says, is not 'bargaining to obtain maximum advantage to one side or the other' but 'commitment to a common goal through the joint provision of complementary resources and expertise, and the joint sharing of the risks involved.' Possible pitfalls in WHO's interaction with industry were highlighted by Yale University's Kent Buse and WHO's Amalin Waxman. For example, could WHO's advocacy functions become subject to commercial pressures, and could the organisation's traditional concern for the poorest and least commercially 'attractive' populations be influenced by partners with necessarily different concerns? To ensure that WHO's involvement in partnerships reflects its constitutional commitment to equity and public accountability, the authors propose, among other things, that WHO's relations with the private sector be based on clear benchmarks of 'good partnership practice.' 24 The concern raised in the earlier section Patients Pending more
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Will EU require it?
The relationship of corporate responsibility to regulation was the focus of an interview with the European Commission official in charge of the development of European policy on corporate responsibility, Dominique Be. He was reported in the September issue of Ethical Performance as saying he wants corporate responsibility to develop on a voluntary basis because this encourages innovation and genuine enthusiasm for the concept. Be drafted the European Commission green paper which defined Corporate Social Responsibility as 'a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis'. Therefore the EU would not consider legislating to compel companies to adopt corporate responsibility strategies. 25 The green paper is a discussion document, and the Commission's thinking is at an early stage. The underlying theme of the green paper is that social responsibility is in everyone's interest, but will be meaningless without rigour and transparency. So companies need to produce reports with sufficiently uniform information to allow comparisons. Also, users of such reports need the assurance of external input and verification to be able to rely on the information presented. Similarly, consumers who want to buy products that have been produced responsibly need a simple, authoritative labelling system. And investors who want to back responsible companies need clear criteria that can be consistently applied. The paper stresses the importance of transparency and dialogue, with the need for developing multi-stakeholder consensus on the way forward. "The threat of regulation is seen as a key motivating factor for voluntary initiatives" Consensus might not be easy, as some would argue that the threat of litigation is a key motivating factor for voluntary initiatives. Professor Ralph Steinhardt from George Washington University Law School maintains that the prospect of litigation may have accelerated the use of voluntary, marketplace initiatives pertaining to corporate responsibility in human rights. 26 As the co-ordinator of the Voluntary Codes Forum, Kernaghan Webb, suggests, 'there is often a legal element to voluntary initiatives, and a legal framework within which such programs operate.' Thus the political implications of concepts such as 'public-private partnership' and 'corporate responsibility' as well as the role of legislation began to be discussed on listservs during this period. 27 These discussions suggest that most professionals agree that the growth in corporate responsibility is a result of deregulation and privatisation. Some go further and argue that corporate responsibility is an answer to deregulation and privatisation, while others question whether it is enough to solve the problems that arise. Some go further still and suggest that corporate responsibility is a justification for more deregulation and privatisation, while others argue the importance of good regulation and key public services being provided as a right and not for profit. There is no consensus among professionals working in this area, although some seem to assume so.
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ISO wants consistency
While the European Commission was stressing the need for greater consistency in corporate responsibility terminology and practice, across the Atlantic the US Ethical Officer Association (EOA) was asking the International Organisation for Standardisation (ISO) to consider developing a solution. The EOA represents 400 mainly US-based multinationals, including companies such as GM, Microsoft and Philip Morris. Following in the wake of ISO 9000 (the quality standard) and ISO 14000 (the environmental management standard), proposals are now being drawn up to create a new ISO standard for ethical business conduct. Termed a 'Business Conduct Management Standard' (BCMS) by the EOA, it would focus on management processes rather than ethical outcomes. It would aim to specify the internal structures, processes and resources that would be required to enable a company to be consistent in the implementation of its principles of ethical conduct. One of the arguments used in favour of the proposed standard is that the authority of a verifiable ISO standard would help companies to fend off the competing demands generated by a plethora of codes and guidelines. 28 Some groups working in corporate responsibility may raise questions about the benefit of this proposal. ISO 14001 has been criticised for giving the semblance of environmental quality and consistency when it allows companies to set their own environmental standards and priorities (apart from requiring legal compliance). Therefore an ethical ISO standard could disguise very different ethical performance among certified or registered companies. This is a concern, given the current state of corporate ethical codes that often ignore key issues such as freedom of association and collective bargaining. In addition, some may be concerned that, as ISO standards are suited to large companies who can document complex management systems, so the widespread adoption of BCMS might marginalise already-disadvantaged producers and independently run SMEs (small to medium-sized enterprises). The EOA's suggestion that the BCMS could be based on a company's self-declaration of commitment and performance may concern many NGOs who have for a number of years advocated the importance of independent verification. Commercial auditing firms, whose ISO 14001 auditing services have proved lucrative in the past five years, may echo their concerns. However, these auditing firms and NGOs may disagree on the appropriate form of independent verification, given the high costs of commercial audits and their current limited expertise on labour rights issues. "Some will question the legitimacy of ISO, given its membership and methodology for conformity assessment" In addition, those local NGOs already involved in monitoring factories' codes of conduct may question the legitimacy of ISO, given that its membership is restricted to national standards organisations and that it has developed a methodology for auditor accreditation that is more suited to commercial auditing companies. For example, the Independent Monitoring Working Group (IMWG) has developed a form of ethical standards monitoring that is predicated on a different methodology to ISO, by involving local NGOs as ongoing monitors, advisors and arbitrators of disputes. In September the IMWG released a report on the history and development of independent factory-monitoring initiatives in El Salvador, Guatemala and Honduras. 29 The initiative started in 1995 when labour problems at the Mandarin International factory in El Salvador became widely reported. Most apparel companies doing business at the factory stopped sourcing their brand-name products from the facility. However, Gap Inc. agreed to stay and explore the creation of an independent factory-monitoring programme in El Salvador. They also agreed to work with the Business for Social Responsibility Education Fund (BSREF), the Interfaith Center on Corporate Responsibility (ICCR) and, later, the Center for Reflection, Education and Action (CREA) towards that goal; and hence the Independent Monitoring Working Group (IMWG) was formed. In the report, IMWG argues that it has demonstrated that companies and NGOs from Central America and the US can join forces to enhance efforts to respect workers' rights. 'During this five-year collaboration, we have learned a great deal about how different perspectives can enrich efforts to create fair, harmonious and productive working conditions', said Rev. David M. Schilling of the ICCR. In El Salvador, the IMWG engaged four local organisations that formed the original Independent Monitoring Group of El Salvador, or GMIES. The primary objective of monitoring was to promote harmonious and productive working conditions through verifying factory compliance with national labour laws, international conventions and Gap Inc.'s own 'Codes of Vendor Conduct'. The report emphasises the importance of attending to the rights of workers in global supply chains, and providing workers with a new channel through which to raise concerns about their treatment and the conditions under which they work. Therefore, they contend that independent monitoring works best when it is joined with effective internal factory systems that allow workers to express their concerns without fear of retaliation. They also argue that an independent monitoring process should provide for a third party to act as intermediary or negotiator, when problems or concerns arise. This is interesting news for other players in the labour standards monitoring field, such as Social Accountability International (SAI). It shares a similar methodological approach to ISO, accrediting international firms to carry out inspections, and doesn't put the same emphasis as IMWG on continual monitoring, dialogue and mediation at the local level. More information on its approach is contained in the book SA 8000: The Definitive Guide to the New Social Standard, which features case studies of companies using the standards. 30 In July, SAI teamed up with the International Textile, Garment and Leather Workers' Federation (ITGLWF) to conduct a workshop in the Philippines. The programme builds on the ITGLWF's network of study circles: factory-based groups that have proven to be very effective for worker education and organising. Over the course of three days, 32 study circle leaders worked with the materials, geared towards promoting worker awareness about globalisation and human rights in the workplace and fostering worker participation in codes of conduct. With the question of retailer responsibility for the social and environmental practices along their supply chain now firmly established on the corporate responsibility agenda, a report from Egypt started some retailers thinking 'How low can you go?'. Down the supply chain, that is. Human Rights Watch (HRW) issued a report showing that Egyptian children working in cotton-farming co-operatives worked long hours, were routinely beaten by foremen, and were inadequately protected against pesticides and heat exposure. The child labourers, most between the ages of seven and twelve (the country's legal minimum age for seasonal agricultural work), earned an average of three Egyptian pounds (about one US dollar) each day. 'The way children are treated in the cotton fields is deplorable', said Lois Whitman, executive director of the Children's Rights division of HRW. Although retailers might already have thought they were bending over backwards to deal with social and environmental issues involved in the manufacture and assembly of their products, it seems there are issues of concern right at the base of the supply chain. Perhaps it is not feasible for retailers to go any lower down the supply chain? Perhaps this is a question of suppliers and governments needing greater capacity to deal with these issues? 31
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International perspectives at Warwick
In July the UK University of Warwick's Corporate Citizenship Unit (CCU) held its 4th annual conference. Delegates from industry, government, civil society organisations and academia flew in from around the globe to discuss the latest news, views and research of people working in collaboration with the CCU. During the opening plenary, former Assistant Secretary-General Professor John Ruggie shared his thoughts on, and hopes for, the UN Global Compact. Professor Ruggie explained that the Compact would be using its website as a way of showcasing corporate experiences in implementing the nine principles, and facilitating the review of corporate submissions by civil society. He explained that it was a practical and pragmatic decision to focus on encouraging and facilitating changes in corporate practice, as the UN did not have a mandate to directly regulate companies. Therefore, he identified the Learning Forum as 'the heart of the change mechanism' envisaged by the UN Secretary-General's office. Ruggie noted that there are differing opinions on the efficacy of a learning approach in creating positive change, but stressed that the Global Compact was only part of the solution to the problems posed by economic globalisation. He noted a number of the challenges that they will face in future. 'There are some things that a learning model by itself cannot achieve. The Compact's recognition and promotion of a company's "good practices" provides no guarantee that the same company does not engage in "bad" ones elsewhere', he warned. In addition, Ruggie noted the possibility that some companies would seek to join in order to deflect criticism - including that coming from other agencies in the UN system. In a packed workshop on 'Shared Values and the Global Compact', Dr Malcolm McIntosh expressed the aim to start 'a global conversation' on the role of the corporation. He reported mushrooming interest in the Compact from around the world, because of 'the moral authority of the UN', which gave the principles 'a certain provenance'. McIntosh explained that the first submissions from corporations were being analysed by members of the Learning Forum and would be posted along with comments from reviewers and selected NGOs over the coming months. He explored the key issues that they would consider when assessing the submissions, noting the complexity of the area and how they would themselves be learning how corporations can operationalise the Compact's principles. 32 The second plenary featured presentations on recent experiences in South Africa, Burma and Vietnam. Gavin Anderson of the Development Resources Centre in South Africa, stressed that the development challenges faced by his country were so great that individual companies would need to work together to drive positive change. He suggested that corporate responsibility should not be seen as the activity of individual companies but as a collective process. He called for an active 'corporate citizenry' to work together on social and environmental challenges. Jerry Sternin, of Save the Children USA, excited delegates with his experiences of working in Burma and Vietnam. He introduced delegates to the idea of 'positive deviance'. He asserted that 'in communities throughout the world there are a few "deviant" individuals whose uncommon behaviours or practices enable them to outperform or find better solutions to pervasive problems than their neighbours with whom they share the common resource base'. He showed that you could find appropriate solutions to development challenges by identifying the problem and identifying how some 'positive deviants' manage to cope better, and then devising an intervention that allows that deviance to be copied by others. This was essentially a development studies lecture, which was of interest to delegates for two reasons. First, companies are increasingly involved in development work in Southern countries and are hungry for the experiences and ideas of the governmental and voluntary development communities. But they were also interested for a quite different reason: Sternin was describing how to provoke positive behaviour - something that delegates are aiming to do, not so much in the South, but in the boardrooms of corporations. Sternin's theory suggests that more research could be conducted on the positive deviants who are champions of corporate responsibility in the business world. If we can identify what made them take a lead and how, then it might be possible to replicate their positive deviance across the private sector. Delegates also heard the perspectives of people working on aspects of corporate responsibility in Latin America. Marcello Paladino, of Austral University in Argentina, argued that 'Latin America needs new leaders' and that socially aware business leaders should take on responsibility for the state of Latin society. He stressed that 'enterprises are related to social transformation' and that the values embodied in ethical business are the values that could help their society progress. Emphasising this political dimension to business, he suggested that 'management is a political discipline, as it [business] can't be understood outside the community. Enterprises without the community do not exist.'
Another workshop focused on the 'Challenges for Development Professionals Working with Business Partners in Zones of Conflict'. In his presentation entitled 'Securing a Licence to Operate in Zones of Conflict', the Vice President for Social Responsibility at the Norwegian oil company Statoil, Geir Westgaard, dealt with the difficult issue of oil companies operating in places such as Burma and the Sudan. He argued that oil companies should not be expected to try to influence the way oil revenues are spent in war-torn areas where they operate. 'There are real limits as to how far beyond the factory gate a corporation can move without jeopardising its licence to operate,' he said. 'Even though the role of the corporate sector has increased significantly with globalisation, business has to be careful about demands that fall outside the scope of legitimate action by a commercial entity.' As discussed in the section 'reporting rights' more
Westgaard's depiction of economic activity (oil production) as non-political and political activity (civil war) as non-economic was questioned by some during discussions, especially as there appeared to be an economic motive for the Sudanese government waging civil war. Interestingly, Westgaard's analysis seemed somewhat contrary to the presentation from Richard Jones of Premier Oil, who emphasised how corporate constructive engagement with regimes such as the Burmese military dictatorship could help catalyse change and protect human rights. Jones chronicled Premier's initiatives such as training Burmese security personnel on human rights principles and law, and also intimated that its high-level advocacy efforts might help develop the government's thinking. Perhaps with more dialogue the various opinions on these issues might begin to converge. For example, while Westgaard was reluctant to unilaterally place conditionalities on its investment, he suggested that 'if and when we do ... it will be as part of a broader effort that involves the international community. The conditionality should then be imposed by legitimate international bodies such as the United Nations ... with the oil companies cast more in a supporting role.'
"Perhaps with more dialogue on the proper role of oil companies the various opinions may converge"
After examining the feedback from delegates, the CCU outlined their plans to make the 5th annual conference an opportunity for more dialogue and debate on the issues raised, including different and perhaps more critical stakeholder perspectives.