Privatizing Human Rights: Can Multi-Nationals Excel Where
Governments Fail?
J. Oliver Williams
Professor of Political Science
North Carolina State University, USA
I. Introduction
Recognition of the link between business and human rights has
increased significantly in recent years placing a greater emphasis
on social and economic rights. Although human rights are
principally the responsibility of governments, this has become
increasingly an important issue for business. Responsibilities of
businesses, especially multi-national corporations, in fields of
labor rights [child labor, freely chosen employment, wages and
working conditions inhuman treatment] are contained in national and
international law and are recognized my responsible multinational
corporations. Now, social, cultural and even civil rights are being
privatized as expectations of companies regarding human rights
emerge among governments and non-governmental organizations
[NGOs].
An important question is the prospects of promoting human rights
standards beyond traditional areas of labor law into the realms of
political and civil rights.
Can business succeed, where government has failed, in spanning
the cultural gap between countries and regions in human rights that
are regarded as universal in western societies but culturally
relevant in Asian countries?
Although the commitment of business in human rights are
voluntary, unless backed by national and international law,
public opinion, shareholders, and international organizations can
bring support and pressure to incorporate human rights standards in
international commerce.
Can the reach of business across national borders play an
effective role in promoting human rights? If so, will
businesses that engage in global commerce help to create harmonious
environments among countries that promote international trade but
differ on cultural principles of rights of individuals?
II. Business and Human Rights
Recognition of the role of business in advancing human rights
has increased significantly in recent years. As a result evidence
indicates that discourse on human rights is increasing in
corporations that span national borders, expectations regarding
human rights have increased among the largest companies, and that
businesses operating in global commerce are under greater pressure
from the public, from government and from human rights [NGOs] to
avoid business practices that violate human rights. Likewise,
increasingly, there is evidence that more of the largest companies
are following business practices that are consistent with legal
principles embodied in national and international laws.
The social responsibility movement is relatively new in the
history of capitalism. In 1800, Adam Smith wrote,
in Wealth of Nations:
“By pursuing his own interest [an individual] frequently
promotes that of the society more effectually than when he really
intends to promote it. I have never known much good done by those
who affected to trade for the public good.”
As late as 1970, Milton Friedman, modern day proponent of free
market economy, wrote:
“There is one and only one social responsibility of
business—to use its resources and engage in activities designed to
increase its profits so long as it stays within the rules of the
game, which is to say, engages in open and free competition without
deception or fraud.”
“That’s the orthodox view among free market economists: that
the only social responsibility a law-abiding business has is to
maximize profits for the shareholders.”
Today, in both the European Union and North America, codes of
social conduct are prevalent in a wide variety of international
corporate sectors. Business for Social Responsibility lists 98
corporations in North America with a human rights policy in its
business codes of conduct, along with economic and social rights
and environmental protection. BSP for over a decade has helped
companies to achieve success in ways that demonstrate respect for
ethical values, people, communities and the environment. BSR
connects members to a global network of business and industry
peers, partners, stakeholder groups and thought leaders. BSR also
convenes and facilitates cross-sector dialogue and collaboration
and includes human rights among its other concerns which include
business ethics, responsibility to communities and the
environment. In 2005, the UN Commission on Human Rights
requested the UN Secretary-General to appoint a special commission
on the issue of human rights and transnational corporations and
other business enterprises. The SRC, while recognizing that human
rights principles were intended to limit state actions towards
individuals or groups, has taken the stance that human rights
principles relate directly to private sector actions.
The SCR categorizes human rights into economic, social.
cultural, political and civil Most notably, the SRC takes the
positions that corporate responsibility includes protecting civil
rights, as well as economic and social. At the same time, it
refutes the contention that human rights are a western or northern
concept that do not apply universally. Noting that economic and
social rights, including the avoidance of forced prison labor and
child labor, has been a longer and more publicized area of
corporate responsibility, the SRC recognizes that the United
Nations Universal Declaration of Human Rights is the most widely
recognized human rights benchmark and holds that corporate concerns
must preclude activities that that deprive citizens of basic civil
liberties.
Recognition of the link between business and human rights, the
SRC points to two recent trends which include [1] inclusion of
human rights and civil rights corporate codes of conduct; [2]
inclusion of human rights into global business principles that
include trade sanctions on nations that broadly disregard
international human rights standards. The attention paid to human
rights by consumers and investors as well as shareholder
resolutions calling upon corporations to ensure that business is
conducted consistent with human rights standards, is cited by the
SRC as the stimulus for the embodiment of civil rights standards in
business practice.
Apart from corporate response to consumes, NGOs and
shareholders, human rights embodied in national and international
law has been a major factor. In the U.S. and Europe, courts
have accepted lawsuits alleging that multinational companies have
contributed to human rights violations, particularly in third world
countries. To avoid legal responsibility, the SRC states that both
business practice and corporate codes of conduct needs to be
consistent with local and international laws to avoid challenges to
their global operations.
The most comprehensive data on business practices in the field
of human rights is a recently released survey undertaken by the UN
Secretary-General’s Special Representative for Business and Human
Rights. Respondents to the survey, released in September, 2006,
were a “global Fortune 500”, included the world’s largest firms
defined by revenue. Some 450 of these firms were located in
the United States [176], Europe [195] and Japan [80].
Among these large multinational corporations, nine out of ten
reports having an explicit set of human rights principles or
management practices in place. Significantly fewer, about
half, reported to have had a significant human rights
issue. At the same time, corporate leaders stated that
embarrassing relegations created an immediate necessity to drive an
uptake of human rights concerns.
Of significant interest, corporations include in their concerns
issues that span the spectrum of human rights included in the UN’s
declaration on universal rights and the social and economic rights
embodied in other UN covenants.
Among the 450 responding companies:
• Recruitment and promotion based
on merit, not race, gender or religion or other factors, and
workplace health and safety were cited by all of the 450
respondents.
• Freedom of association and
collective bargaining were included by 87 percent.
• Forced, bonded or compulsory
labor and child labor was cited by 80 percent of the
companies.
• Three out of four companies
indicate that they recognize a right to privacy.
Some variation occurred among countries in various regions of
the global and across corporate sectors. Apart from
non-discrimination and workplace safety, which were virtually
universal concerns, extractive industries more frequently that
European, listed freedom of association and collective
bargaining. Forced labor and child labor were mentioned more
frequently by European firms, and European firms were more likely
to recognize right to life, liberty and security of the
person. Right to privacy showed little regional variation and
is supported across sectors.
The overall clear and strong levels of support do show some
slight regional differences, at least in rankings. U.S. companies
rank employees and suppliers higher in their concerns but place
lower emphasis on community and country of operation than do
European firms. Japanese companies are least likely to include
countries of operation in their human rights concerns.
When asked what if any human rights instruments influence
policies and practices, not surprisingly international business
organizations were cited. However, outside of business groups, the
Universal Declaration of Human Rights was the most cited. A fourth
of the companies cited no international instruments, but notably
all extractive industries cited the universal declaration and
nearly half of Japanese firms indicated that no outside
international agreements affected human rights practices.
III. Assessing the Impact Business Human Rights
Initiatives
Non-governmental participation in human rights is receiving
considerable emphasis. However, the premise that capitalist
markets will necessarily foster human rights improvements is far
from being realized. Still the growth of international trade, and
the increasing influence of international trade organizations, and
the willingness of multinational corporations to articulate a human
rights commitments hold promise that the privatization of human
rights will become an important strategy of attaining human rights
globally. Not only are corporations and international business
groups assuming greater roles in formulating and advancing human
rights concerns; businesses have begun to establish code of conduct
and monitoring business practices.
The growing number of non-state actors, among multinational
corporations, international leading institution as well as
insurgency groups and even terrorists are part of the growing
privatization movement. Non-governmental organizations [NGOs],
including Amnesty International and Human Rights Watch that
serve monitoring and advocacy roles have taken the stance that
private sector action is important but must be accompanied by
legislation and continued governmental leadership.
Nevertheless, important questions are raised by the
privatization movement. While bringing greater emphasis to economic
rights, will privatization lead, on the other hand, to less
emphasis on non-economic, civil rights embodied in the Universal
Declaration? Will the power of citizens’ groups hold corporate
human rights abusers accountable through information campaigns and
even product boycotts? Will good citizen corporations set standards
that third-party suppliers and companies that violate human rights
will be compelled to follow?
Of great importance is what effect wills commercial human rights
practices have on countries with serious violations of universal
rights?
On several of these questions, the record does not allow an
assessment yet of the effectiveness of the privatization
movement.
1. Has the privatization movement embraced
non-economic rights?
Concern for political and civil rights of citizens in countries
where they operate has been expressed widely in the codes of
conduct of the largest multinationals. Business for Social
Responsibility on its web site lists the codes of human rights
practices of 21 top companies with human rights reports.
Cisco is among the corporations that affirm support of the
United Nations Universal Declaration of Human Rights and Global
Compact, Cisco's codes of conduct, employee policies and guidelines
substantially incorporate laws and ethical principles including
those pertaining to freedom of association, non-discrimination,
privacy, collective bargaining, compulsory and child labor,
immigration and wages and hours.
Cisco’s approach is to have codes, policies and guidelines are
reviewed by a corporate citizenship council consisting of an
executive committee and a broad-based global membership of Cisco
management.
Hewlett-Packard, another international corporation that cites
human rights in its code of conduct, states:
“We also engage globally with various stakeholder communities to
address issues related to the environment, economic development,
digital divide, privacy, labor and human rights.”
HP has a policy of encouraging employees to apply time and
effort to help solve problems in their communities.
In reference to human rights, the HP code of business conduct
“upholds and respects human rights as reflected in the Universal
Declaration of Human Rights.”
HP is also states a commitment to fair labor practices and the
respectful treatment of all employees, including the protection of
workplace health and safety and data-privacy protections.
Publishing reports on social concerns and adopting codes of
conduct do not guarantee respect for human rights in corporative
practices any more than human rights are practiced in countries
that a signature nations in United Nations covenants.
Amnesty International, on of the most respected non-governmental
organizations in the field of human rights, believes that the
business community also has a wider responsibility -- moral and
legal -- to use its influence to promote respect for human rights
and advocates national and international legal instruments that
promote greater corporate responsibility for human rights,
including those that assure the risk of legal accountability if a
company commits or is complicit in human rights abuses in their
operations.
II. Status of Universal Rights in Government and
Business
It is in the area of individual rights embodied in the basic
United Nations’ Universal Declaration of Human Rights, where
governments have so widely diverged in the support and the practice
of human rights principles. It is in coming to an agreement on the
principles of this declaration that nation’s having failed so
basically in human rights practices. Throughout Europe and North
America and some areas of South and Central America and Africa
these principles are considered universal rights that all
individuals want and deserve. In most of Asia, however, governments
consider these rights to be based on western values that do not
reflect the values of Asians who culturally have greater regard for
social harmony and stability.
Until there is agreement on these principles there is likely to
be little harmony on human rights among the major countries of the
world.
Despite the Bangkok Declaration that states a commitment to
principles contained in the Charter of the United Nations and the
Universal Declaration on Human Rights, leaders in most Asian
nations continue to advocate a cultural relevance in universal
rights, act on the principle that individual rights conflict with
social harmony and stability, and cite Asian values as
contradicting the western ideal of universality. In fact, it
was from the Bangkok meetings that Asian leaders began to promote a
cultural relevance approach to universal rights, although the
principle had been argued before then.
International NGOs which are largely prohibited from monitoring
and reporting human rights violations in these countries, through
contact they maintain with human rights advocates in Asia, conclude
that non-democratic rulers are a bigger impediment to human rights
than the cultural and social value system of the region. Some Asian
scholars, as well, believe that the Asian values, historically from
the time of Confucius, have philosophical roots in individual
freedoms and rights.
II. Has there been an increase in the
concerns for economic rights and the rights of women and
children?
The damaging exposure of the Nike Corporation, and later as many
of ten more multinational companies, in the treatment of women
workers and use of child labor shifted the debate over corporate
social responsibility for human rights. It created a watershed in
the past decade by developing a positive role in business and trade
in enhancing respect for human rights in countries with widespread
violations. Revelations of child labor and abysmal working
conditions led corporations to express respect for essential human
and labor rights, such as freedoms of association and expression,
as well as an end to cruelty and discrimination and inequality on
the basis of ethnicity or gender. Advocacy by human rights groups,
repeated media exposure, and legislative interest in banning
products made by child labor from import in the United States has
made child labor and women’s working conditions a foremost human
rights issue in the global economy. The extensiveness of child
labor, estimated at over 250 million children working around the
world, has indicated a major social problem of condemning children
to a life of poverty by putting them to work in lieu of
education.
Whether the attention has improved significantly, or even
marginally, women’s working rights or reversed a trend in child
labor has not been documented. Journalist reports indicate that
poor working conditions of women China is less a problem with joint
venture companies in Special Economic Zones [SEZs] than small scale
manufacturers surrounding these zones.
III. Has privatization affected country human rights
policies?
The ascension of China to the World Trade Organization, which
facilitated dropping annual assessments of China’s human rights
under Most Favored Nation trading status, has moved human rights
from a central place in U.S. foreign policy to in most cases
subordinate to trade policy. From a high point in the Carter
administration, when human rights were prominent in foreign policy
debate, human rights concerns now are raised in conjunction with
trading issues. While trade policies mandate that the U.S. advance
human rights through its voting in multinational trade groups and
its security assistance to other countries, the subordination of
human rights to trade and security concerns has not led to
consistency in current U.S. policy. Countries important to U.S.
economic and political interests are not subjected to the same
degree of human rights scrutiny as nations deemed less vital to
U.S. interests. Recognizing that human rights are not central in
U.S. foreign policy, and inconsistent as well, NGOs that watch
human rights compliance have pushed for sanctions against nations
committing gross human rights violations.
The internet restrictions agreed to in China by American
internet providers illustrates two sides of a problem with
international corporations violating principles in the Universal
Declaration. The actions by the large information providers were
viewed as corporate complicity in restricting rights of freedom of
speech and information. The enormous outcry from western NGOs and
citizens in western countries indicate the scrutiny the
corporations receive in social and human rights issues. Although
public opinion has not led to any reversal of agreements made by
Google
Actions by Yahoo, Google and Microsoft are viewed in the West as
corporate complicity in restricting freedom of speech and
information. The enormous public outcry has not reversed agreements
made by Google. However, these corporations are likely to be more
reluctant in making further restrictions and will be especially
guarded in the types of information that they filter.
The issue also acerbates China’s problem of human rights in
international business. Private markets thrive on information and
to remain a hub in international trade and manufacture, China
confronts a conflict between information flow that is vital to
business and the government’s ability to control, or even appear to
control, speech and information. The expectations of multinational
corporations in upholding human rights are likely to reverberate
inside China as much as outside, with as much scrutiny as social
and economic rights have previously received.
IV. Conclusions
In the past decade, there has been considerable advancement in
the trend toward injecting human rights issues in global trade. In
the business world, public opinion, non-governmental organizations,
and trade organizations that have become a leading source for
business throughout the world have worked to raise the expectations
of companies in social and civil rights. This has led to the
adoption of business codes of conduct in many of the world’s
largest companies. Significantly, western businesses have
included many of the rights considered as universal rights in the
United Nations declaration. Harmony on human rights has been
impeded by conflicting value systems toward universal rights
between western nations and the economically advancing nations of
Asia. It remains to be seen if global trade will become a vehicle
for bridging the gap this basic human rights divide.
(China.org.cn)