In a time when multinational corporations have become truly globalised, demands for global standards on their behaviour are increasingly difficult to dismiss. Work conditions in sweatshops, widespread destruction of the environment, and pharmaceutical trials in third world countries are only the tip of the iceberg. This timely collection of essays addresses the interface between the calls for corporate social responsibility (CSR) and the demands for an extension of international human rights standards. Scholars from a vast variety of backgrounds provide expert yet accessible accounts of questions of law, politics, economics and international relations and how they relate to one another, while also encouraging non-legal perspectives on how businesses operate within and around human rights. The result is an essential incursion for a wide range of scholars, practitioners and students in law, development, business studies and international studies, in this emerging area of human rights.
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About the Author
Aurora Voiculescu is an academic in the Centre for Law at Open University Business School and an Associate Research Fellow at the Centre for Socio-Legal Studies, Oxford University. Helen Yanacopulos is Senior Lecturer in International Politics and Development at the Open University.
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The Business of Human Rights
An Evolving Agenda for Corporate Responsibility
By Aurora Voiculescu, Helen Yanacopulos
Zed Books LtdCopyright © 2011 The Open University
All rights reserved.
Human rights in business contexts: an overview
AURORA VOICULESCU AND HELEN YANACOPULOS
The business and human rights nexus
The role and responsibility of business in issues of labour, environment and society has been a key point of discussion over the past few decades, and has led to such terms as 'corporate social responsibility' entering common parlance. Corporations have rushed to incorporate voluntary instruments into their business practices – frequently as a response to public criticism, but also frequently as a means of 'doing good'. Businesses have been encouraged to do this by international frameworks and declarations, and by pressure to ensure that they achieve some international standards. The framework of human rights has become an international social norm, to which many international businesses now subscribe.
Why has this been seen as necessary? First of all, large corporations have become increasingly international (some would say 'global') and, in terms of their supply chains, even more interconnected than before with medium-sized and smaller producers across the globe. In their primary aim of reducing costs (and consequently increasing their profit margins), corporations have fuelled what has been called the 'race to the bottom' – finding the cheapest labour to produce their products. Furthermore, in trying to maximise profits, some corporations have frequently cut corners, resulting in damage to the environment where products are produced or disposed of (typically not the same locations as where the products are consumed). This has inevitably generated harsh public criticism. The internationalisation and globalisation of business has also meant that, whereas in the past businesses have been linked to local communities via production and consumption, this link is now (with few exceptions) severed.
Second, frequently there is a disjuncture between the needs of individuals and societies, and the agencies – largely governmental – that can (or have the duty to) provide/protect/promote/fulfil these needs. This broken link may be detected with regard to instances of individual harm and the perpetrator agency (for instance a transnational corporation), as well as instances of harm and the compensatory agency (generally, national governments). However, aside from this severed link between needs and the duty-bearing agencies, there is also a perceived conceptual and legal dislocation of duties and responsibilities.
Corporate social responsibility
Businesses today are expected to conduct their operations responsibly and with accountability to wider society. The responsibility and accountability derived from these expectations have found their platform in the corporate social responsibility debate. The concept of corporate social responsibility itself is multifaceted. Zenisek (1979), for instance, spoke of corporate social responsibility as meaning 'something', but not always the same 'something' to everyone. To some it conveys the idea of legal responsibility or liability; to others it means socially responsible behaviour in an ethical sense; to still others the meaning transmitted is that of 'responsible for' in a causal mode; many simply equate it with 'charitable contributions'; many of those who embrace it see it as a mere synonym for 'legitimacy'; a few see it as a sort of fiduciary duty.
In a similar vein, Carroll (1979) suggested that the definition of corporate social responsibility (CSR) should encompass the range of social expectations placed on companies, including economic, legal, ethical and philanthropic responsibilities. From this perspective, he spoke of at least four types of corporate responsibility. First of all, of course, there is economic responsibility, which corresponds readily with a business's self-perception of its scope and role in society. This would imply the primary responsibility of a business organisation to produce goods and services in a way that is profitable for its owners.
Second, while assuming their fundamental economic role, companies are expected to comply with the laws and regulations that reflect society's values and norms. Legal expectations apply to companies as legal entities that can act as persons; but they also affect individuals in their role as employees. This represents the legal dimension of a business organisation's social responsibilities.
Third, business organisations are expected to abide by the ethical norms of society. Carroll argues that, because these norms are not written down in law, they are more ambiguous than legal requirements and therefore more difficult for companies to anticipate and follow. Nevertheless, as we shall see throughout this volume, there is an inherent link between legal and ethical responsibilities, because ethical expectations can be seen to underpin and predict the emergence of new laws and regulations. For example, social movements – including those that promote labour rights, women's rights and environmental protection - have advocated values that have later been codified into law. Moreover, the law has its own insidious ways of cross-pollinating what was initially regarded as the domain of voluntarism and philanthropy.
Philanthropy is the fourth dimension of the business responsibilities identified by Carroll. Businesses may, for instance, engage in activities that go beyond the expectations of society – through such activities as volunteer work, sponsorship of philanthropic projects and donations to public and non-profit organisations (such as sports clubs). Even though lack of engagement in discretionary activities is not perceived as irresponsible, it is quite common for companies to carry out such roles in society. Carroll's four-part model is useful in distinguishing and clarifying the motives and contradictions behind corporate behaviour (Griseri and Seppala 2010).
Stemming from the CSR debate, as well as from a host of complex factors related to globalisation processes, is the growing acknowledgement of international human rights as potential rules of a globally operating, ethical market economy. An increase in the speed and efficiency of communications has brought the way in which we view events across the world into sharper focus, including the suffering and exploitation that goes hand in hand with the complex modes of production associated with the global market economy. An increased realisation of the potential link between democracy, rule of law and development – passing via accountability and good governance in both politics and trade and business – has again brought human rights into focus as potentially offering a conceptual framework within which to build a fairer world.
Why human rights?
This book is in tune with the growing acknowledgement of international human rights standards as rules for a globally operating ethical market economy. Historically, human rights and the marketplace have occupied very different places in the normative landscape, exemplifying the classic distinction between the public and the private sphere.
A classic definition of a legal right is that of the Stanford and Yale law professor and theorist Wesley Hohfeld (cited in Kinley 1998: 15) as 'one's affirmative claim against another'. According to Hohfeld, the correlative of a right was a duty and all rights are human rights. Human rights are 'international norms that help to protect all people everywhere from severe political, legal, and social abuses' (Nickel 2006). Nickel distinguishes between different senses of human rights: political, moral and legal. In political terms, 'human rights are political norms dealing with how people should be treated by their governments and institutions'. In the moral sense, 'a human right can exist as a shared norm of actual human moralities, as a justified moral norm supported by strong reasons'. Legal human rights are those recognised under national or international law.
While in philosophy, the existence, content, nature, universality, justification and legal status of human rights are subject to continuing debate (ibid.), a generally accepted understanding of human rights is encapsulated in the 1948 Universal Declaration of Human Rights. Although the Declaration emerged long before the idea of corporate social responsibility took any real shape, it is regarded as the first international document to go beyond the classic governmental responsibility for the realisation of human rights, this responsibility being assigned to both governments and 'other organs of society'. In this sense, the preamble of the Declaration recognises the state's primary responsibility to protect and promote human rights, while at the same time allowing for other organs of society – such as business organisations – to be conceived as bearers of human rights responsibilities.
These processes bringing human rights into focus have their potential dangers. The predominantly Western concept of human rights brings inevitable allegations of conceptual and cultural imperialism that is intended to support the now more refined forms of economic imperialism. Economic globalisation and the globalisation of the human rights discourse appear on multiple agendas from multiple sources that nuance the relationship between business and human rights.
The United Nations agencies, for instance, have often been at the centre of various initiatives aimed at formulating universally acceptable standards or norms for the activities of business organisation in general and the activities of transnational corporations (TNCs) in particular. Its long-debated and failed draft UN Code of Conduct for TNCs contained a wide range of responsibilities – from respect for tax and competition rules to respect for the sovereignty and the political system of the host country, as well as respect for human rights norms and abstention from corrupt practices. Similarly, the Organisation for Economic Co-operation and Development (OECD) has made the link between business practices and human rights through various inter-governmentally endorsed documents. Among other things, the OECD Guidelines for Multinational Enterprises (MNE), revised in 2000, addressed the MNEs' duty to contribute to sustainable development in their host countries, to respect human rights and to refrain from seeking or accepting exceptions from the host country's regulatory framework in the areas of environment, health and safety, labour rights and other protective measures.
The UN Global Compact – another UN initiative that attempts to build a bridge between business, human rights, labour, environment and anti-corruption – can be seen as particularly relevant in addressing the question: 'Why human rights?' Enjoying, as it does, quite a wide acceptance among business organisations (largely because of its rather vague formulation of responsibilities), the Global Compact is in fact based on three international documents that have human rights and human development at their heart. At least two of these benefit from fairly broad domestic legal endorsement, and all three can be seen as actual or credible sources of potential new legislation. The first document is the Universal Declaration of Human Rights, with its enhanced assignation of responsibility for human rights to individuals as well as to 'other organs of society'. The second provides the basis for the UN approach to this issue – the International Labour Organization's Declaration on Fundamental Principles and Rights at Work. The Declaration requires respect for freedom of association, recognition of collective bargaining, elimination of all forced and compulsory labour, the effective abolition of child labour and the elimination of discrimination with respect to employment. While it remains a 'declaration', the document was the result of debate within the International Labour Organization (ILO) as a tripartite organisation, which brings together government, employers and trade union representatives. Finally, the Rio Declaration of the UN Conference on Environment and Development represents the third pillar of the UN strategy, which, while focusing on the environment, has at its heart the aim of human development and implicit human rights values (Bradlow 2001).
Structure and chapters
This edited collection sets out to bring together different perspectives on human rights in a business context. There are ethical conceptions and perspectives of human rights (that respect by all rational actors for human rights is, at the least, an ethical requirement). There are political perceptions and conceptions of human rights (that human rights are political agreements and are part of a social contract, for individuals as well as for organisations). And there are legal conceptions of human rights (that human rights are social demands conveyed via legal mechanisms). This book aims to equip the reader to take a systematic critical approach to identifying business responsibilities within human rights frameworks. It introduces and builds on questions of law, politics, economics and international relations, and maps out the extent to which human rights law can be instrumental in the business ethics debate. Thus, it sits at the nexus of three areas: human rights, business and ethics. And, with varying emphasis, all chapters address the intersection of these three areas.
The international legal landscape is shifting in the field of human rights and business. In Chapter 2, Voiculescu explores a key issue in the debate on business responsibility for human rights: that of corporate self-regulation versus international enforceable rules. Should adherence to ethical guidelines be achieved predominantly through social dialogue and self-regulatory mechanisms? Or should the international community come together to design a set of clear, enforceable rules that are applicable to all business enterprises? By focusing her analysis on these questions and on the international initiatives of the ILO, the OECD and the UN in particular, Voiculescu illustrates the various points of tension between the imperative nature of human rights discourse (requiring a strong normative commitment) and the predominantly conversational nature of the voluntary approach.
As international initiatives strive to reach agreement on corporations' legal and normative responsibilities with regard to human rights, corporations' behaviour is also shaped by marketing and branding considerations. A number of major brands have had their reputations damaged when human rights abuses have been associated with their (or their subcontractors') activities. Corporate social responsibility has therefore become a key element in many leading brands' identities. In Chapter 3, Harris considers tensions between marketing and corporate social responsibility, with specific reference to branding and reputation management.
The global recession that started in 2008 has meant that there is now even more pressure on companies to keep labour costs of production low, in order to maintain low prices for consumers. What has been called the 'race to the bottom' – corporations' quest to find the cheapest labour to produce their products – has been the cause of labour abuses across the globe. As a result, an increasing share of the human population has been drawn into waged labour. In Chapter 4, Pangsapa and Smith argue that labour rights must be central to business ethics and, while independent monitoring and verification of factories might be quite effective, in order to address these injustices we need to shift from a system of labour standards to one of labour rights.
The dynamic relationship – potentially supportive – between an ethical and a legal dimension of business responsibility for human rights is illustrated in Slapper's Chapter 5 on violent corporate crime, corporate social responsibility and human rights. Saving us from being blinded by innocuous expressions such as 'industrial accident', Slapper argues that at least some of these 'accidents' can easily be construed as murder, manslaughter or criminal negligence. Focusing on the way law can be used to enhance corporate social responsibility and to encourage compliance with human rights, Slapper argues in favour of the recognition in law – and even in 'global law' – of the business responsibility for such human rights principles as the right to life.
Bringing together 'hard law' and compelling ethics, in Chapter 6 Bright and Muraguri consider the responsibility of pharmaceutical companies to share scientific advances and the various initiatives undertaken by the public and private sectors to promote the right to health. By using the pharmaceutical industry as a case study, the authors argue that human rights concepts have shaped the use of intellectual property rights and the development of health-related legal and social infrastructure mechanisms in poorer countries. Looking at legal institutional traditions and the international human rights debate, Bright and Muraguri highlight how a combination of shaming, generic competition, increased dialogue and creative thinking can result in an enhanced right to health – and ultimately to life.
Excerpted from The Business of Human Rights by Aurora Voiculescu, Helen Yanacopulos. Copyright © 2011 The Open University. Excerpted by permission of Zed Books Ltd.
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Table of Contents
1. Human rights in business contexts: an overview - Aurora Voiculescu and Helen Yanacopulos
2. Human rights and the normative ordering of global capitalism - Aurora Voiculescu
3. Brands, corporate social responsibility and reputation management - Fiona Harris
4. Transforming labour standards to labour rights - Piya Pangsapa and Mark J. Smith
5. Violent corporate crime, corporate social responsibility and human rights - Gary Slapper
6. Access to medicines: intellectual property rights, human rights and justice - Keren Bright and Lois Muragur
7. Foundations - actors of change? - Helen Yanacopulos
8. Combating transnational corporate corruption: enhancing human rights and good governance - John Hatchard
9. Business in zones of conflict: an emergent corporate security responsibility? - Nicole Dietelhoff and Klaus Deiter Wolf
10. Human rights, ethics and international business: the case of Nigeria - Olufemi Amao
11. Clusters of injustice: human rights, environmental sustainability and labour standards - Mark J. Smith and Piya Pangsapa