Supping with a long spoon

How much do human rights count for, when there’s business to be done? Roger East picks out some hot potatoes, and Oliver Balch gets the views of two people in the thick of the debate.

Arms sales to China are on the cards again, for the first time since the Tiananmen Square massacre back in 1989. If the EU, as expected, lifts its long-standing ban, you can bet it won’t be because the world’s largest dictatorship has repented for killing all those young pro-democracy protestors. It’s partly because the memory’s faded: there’ll be people voting in elections here this May who were barely two at the time.

What’s more, arms aside, we’ve been happily doing business with China since the early 1990s. Scruples about forced labour by political prisoners are a tricky problem for supply chain management, admittedly, but we’d be mad not to be there, wouldn’t we, with opportunities on that scale? The advocates of EU arms sales, too, argue that you can’t treat an emerging economic superpower as a pariah state.

The French, of course, have never been big fans of constraints on their military exports – and you can just see the Gallic shrug at complaints of unprincipled ‘realpolitik’ from the likes of Human Rights Watch. Globally, trade bans have a chequered record. The US, perhaps surprisingly in view of its identification with free enterprise, seems both most prone to their use and most dogged in their application.

Countries like Cuba, or Libya until last year, carrying nothing like China’s clout as potential trading partners, can be cast outside the pail of commerce and investment for decades when political anathema has been pronounced against them. Whether this works is a different matter. The durability of both Castro and Gaddafi suggests the contrary.

The opposite tack is constructive engagement. This rests on the premise that you can do more to encourage beneficial change, in countries where standards of human rights (and environmental practice) are below acceptable standards, by maintaining and developing links – and, particularly, by doing business. In practice, this is the dominant approach in the globalised economy. It’s a key test of responsible business, too, that engagement should involve more than casting a cloak of piety over a de facto connivance with ‘business as usual’.

“The memory of Tiananmen has faded: we’ve been happily doing business with China since the 1990s.”

The former UN human rights commissioner Mary Robinson recently wrote that “the manner in which companies treat human rights is a litmus test for the globalisation process”, while Amnesty International takes the view that there is an inherent obligation within the Universal Declaration of Human Rights for corporations to be proactive in seeking to improve the environment in which they operate. As Sir Geoffrey Chandler has said: “Corporations must recognise that they bear responsibility for the total impact of their operations, for the manner in which they treat employees, for their security arrangements and for their effect on the social, physical and political environment in which they operate.”

The real live debate is twofold. Is there sufficient reason – and pressure – for companies to do this voluntarily? And in what circumstances are they just kidding themselves (or the public) that constructive engagement can work, when there’s really only one ethical answer to the question ‘should I stay or should I go?’…

Should I stay or should I go?

We asked corporate citizenship specialist Oliver Balch to talk this through with Chris Marsden, formerly of BP, who chairs Amnesty International’s Business Group, and Andrew Hope, UK director of the International Chamber of Commerce (ICC).

Oliver Balch: Are there some countries that companies should simply avoid because of their poor human rights record?

Chris Marsden: Amnesty does not take a position as to whether a company should go into a country or not, nor does it campaign for companies to get out of particular countries. On the whole, I would want companies with declared policies for taking human rights seriously to stay. They are much more likely to be a force for good and for change than companies with no policy and no interest in human rights.

Andrew Hope: I would strongly support that position. In most incidences, international businesses are the ones with the highest standards. They serve as an example to national businesses to improve their policies and programmes. But using the terminology of human rights is perhaps unhelpful. For the manager on the ground, a company’s labour standards or their health and safety standards or what they do in the local community are just that – standards for doing business. They are not part of a ‘human rights’ policy and presenting them as such becomes potentially confusing.

CM: The recent UN Norms for Businesses [see right] clearly spell out what might reasonably be expected for companies to do under the principles of the Universal Declaration on Human Rights, including rights for the environment. Companies are not going to be able to set themselves up in a quasi-governmental role and address all human rights issues they face in a given country. They need to determine what rights they can materially influence through the nature of their operations, and to take an absolute stand on these immediately.

Those rights over which they exert less direct influence require a longer term strategy. It’s the unequivocal responsibility of all companies firstly to be aware of the impacts of their decisions on human rights; secondly, to manage these impacts effectively; thirdly, to be accountable for their performance.

OB: What happens when a country’s laws fall short of international standards on human rights?

AH: For us, helping improve the law remains the starting point for improving human rights. It can be a difficult issue for companies, though, especially when one considers differences in cultural expectations. The role of women provides a good example. In some parts of the world, female equality is not universally held in a country’s laws and social customs despite it being clearly set down in the Universal Declaration.

CM: I think this issue of cultural relativism is incredibly dangerous. The fact that a particular country doesn’t recognise a universal right, such as equality of women, should not alter a company’s position to protect such a right – using all its contacts and points of influence over the governing authority, from the national level to the local, to demand improvements.

OB: What could the UK government do to improve business performance on human rights?

CM: Voluntary codes like the Ethical Trading Initiative in the retail sector, and the Extractive Industries Transparency Initiative, are good examples of ways to make clear what the general expectation for companies ought to be. The UK government could support such initiatives, and thereby enable other countries to follow suit. I would also like to see the British legal system adopt similar legislation to the US, which allows cases of human rights abuses committed outside national borders to be tried in national courts.

In states where legislation is poorly enforced, leaving things to companies’ own standards, plus a little pressure from non-profit groups, is not ideal. Too often governments have weakened the rule of law for competitiveness reasons. We need tougher legislation that will level the playing field and really move things forward.

I would like to see the UK moving towards some form of compulsory reporting for companies on human rights issues. I don’t trust the businessman who says ‘leave it to me, I’ll deal with it’. Voluntarism isn't enough.

AH: I agree that it’s absolutely fundamental for a company to state what it wants to achieve and to report on its progress, but I am wary about making this mandatory. Just look at the plethora of semi-compulsory or voluntary reporting requirements that already exist. There’s also the problem of making a mandatory reporting system relevant to individual companies operating in very different contexts.

Requiring companies to report on human rights issues will, I believe, risk encouraging minimal compliance rather than aspirational development. Where companies can have an impact is in ensuring that their suppliers operate in full compliance with their own stated codes and their ways of doing business. The huge majority of international businesses have such codes and are fully aware of the reputation risk if any transgression is identified. The private sector is also working together to establish policy initiatives on these issues. The work of the Business Leaders’ Initiative on Human Rights is one example.

CM: Companies could be doing considerably more to realise their potential. A clear determination to do business properly will change attitudes in those countries where international companies operate. Take bribery: companies with no clear bribes policies, such as Shell and BP, are actually beginning to influence the thinking in some of the countries where they are working.

NEUTERED NORMS?

26 January 2005

Oliver Balch and Roger East