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Multinationals show their global
muscle
By Alan Boyd
SYDNEY - A
powerful corporate alliance is poised to block a
contentious United Nations charter that would make
multinational corporations more accountable for their
actions - especially in labor rights, working conditions
and personal liberties - for their employees in the
Third World, including Asia.
The UN Commission
on Human Rights (UNCHR), currently holding its annual
meeting in Geneva, is expected to avoid any vote and
instead to return the "Norms on Business and Human
Rights" to its drafting committee because political
leaders are unwilling to take a strong - and financially
costly - stand in favor of it. Sponsors have admitted
that intense lobbying by the International Chamber of
Commerce (ICC) and the International Employers
Organization (IEO) has made it unlikely the charter will
get beyond the committee stage, at least for now.
"There is ... a real risk that governments
meeting in Geneva will decide not to endorse the
proposed norms, but instead send them back to the UN
sub-commission for the protection and promotion of human
rights. This would mean a major blow, if not the end of
the process," said Corporate Europe Observatory, a
business advocacy group.
Known formally as the
UN Norms on Responsibilities of Transnational
Corporations and Other Business Enterprises with Regard
to Human Rights, the charter was approved by the
sub-commission in April after four years of work. It
sets out the obligations of multinationals under
international treaties governing such areas as labor
rights and working conditions, and encourages foreign
investors to advance the general concept of personal
liberties as they decide where and how to invest.
Corporate critics say they are comfortable with
these ideals, which are already pursued by many
companies on an individual basis. What they reject is
the notion that there should be any international
compulsion. While the charter would not have the force
of a formal UN treaty, it has taken the rare step of
including an enforcement lever that might force
negligent firms to pay compensation to their alleged
victims - if they are convicted in local courts.
Another clause if adopted might commit
governments to pursue legal action at home for
violations that were committed by their corporations
abroad.
"We don't have a problem at all with
efforts that seek to encourage companies to do what they
can to protect human rights. We have a problem with the
premise and the principle that the norms are based on,"
ICC spokesman Stefano Bertasi stated in a paper
outlining the chamber's objections.
"These norms
clearly seek to move away from the realm of voluntary
initiatives ... and we see them as conflicting with the
approach taken by other parts of the UN that seek to
promote voluntary initiatives."
ICC's most vocal
members and opponents of the charter, such as energy
giant Shell, contend that multinationals already have
sufficient avenues to safeguard the interests of their
local employees. Foremost among these is the Global
Compact, initiated in 2000 by UN Secretary General Kofi
Annan in consultation with the ICC and other global
business associations, which encourages companies to
meet conduct guidelines on human rights - labor rights,
working conditions and personal liberties.
Other
protocols have been drawn up by the Organization for
Economic Cooperation and Development, which groups the
most advanced economic powers, and the International
Labor Organization.
Non-government organizations
say the problem is that few firms have bothered to sign
voluntary codes, in essence because they are voluntary.
A handful of multinationals agree, putting them at odds
with the ICC and the IEO.
In December, a group
that includes Novartis, Novo Nordisk, Nokia and Barclays
Bank set up a coalition with the express intention of
advancing the proposed labor and human rights norms
within the business community.
"It has become a
tradition for [the ICC and IEO] to oppose any kind of
legislation or regulation that limits the behavior of
companies," said Sune Skadegard Thorsen, senior adviser
on corporate responsibility at Novo Nordisk.
Nokia's chief legal officer, Chip Pitts, who is
also a UNCHR delegate, said that "for all the good done
thus far by the Global Compact, fair observers must
admit that the uptake by businesses has not been what it
could. Recurring significant problems of corporate
social responsibility demonstrate the need for even more
helpful and effective approaches to build upon the
foundation already laid by the Global Compact while -
frankly - moving beyond its limitations," he added.
Not so, said Shell, which has been singled out
for particular criticism by the loose alliance of NGOs,
human rights groups, corporations and judicial
organizations that is backing the charter.
In a
rebuttal of the criticism, the British-Dutch
multinational maintained that its position on the
charter had no bearing on Shell's own approach to the
protection of human rights. "We have been working hard
over several years, within the company and with others,
to ensure human rights issues are taken properly into
account in carrying out our day-to-day business
operations and have been progressively building these
considerations into our processes and management systems
for what we call social performance - ie, all the ways
in which we impact on or contribute to the communities
that surround our operations and the societies in which
we work," the company stated.
Caught between a
hostile human rights lobby and the ambivalent corporate
sector, the political leaders who will decide the fate
of the transnational norms on employee treatment are
mostly unenthusiastic, even though the charter would be
the first to shift responsibility in international law
away from governments.
Third World nations fear
an exodus of foreign investment if the charter is
implemented. Governing parties in advanced countries
such as the US and the United Kingdom depend heavily on
campaign contributions from multinationals.
In
Asia, only China and Japan have spoken out forcefully on
the subject, but Indonesia, Thailand, Malaysia and most
of the South Asian sub-continent are known to have
strong reservations. Some, including South Korea, are
expected to abstain from voting, helping to consign the
norms on fair treatment of employees to the UN's out
tray.
The region has taken little heed of
warnings by the human rights lobby that working
conditions in factories run by foreign investors are
deteriorating, either through neglect by regulators or
indifference by multinationals.
A study released
this week by British-based charity Oxfam reported that
women working in global supply chains had become
progressively disadvantaged, as the legal rights of
corporations were "dramatically deepened and extended"
though the auspices of the World Trade Organization and
other trade agreements.
One development had been
a shift toward more flexible working conditions, such as
short-term employment without contracts, that did not
offer the same legal protections under domestic labor
statutes.
According to Oxfam, fewer than half of
the women employed in Bangladesh's textile and garment
exports sectors now have contracts, while most get no
maternity or health coverage. About of 80 percent of
workers interviewed feared dismissal if they complained.
In China's Guangdong province, young women were
expected to work 150 hours of overtime each month in
garment factories owned by foreign firms, but 60 percent
had no written contracts and 90 percent had no access to
social insurance.
"The pressure of competition
from low-cost imports is clearly one reason [for
abuses], but so too is the pressure inherent in being
employed at the end of a major company's global supply
chain, whether it is sourcing overseas or domestically,"
the study concluded.
"Under such pressures,
factory and farm managers typically pass on the costs
and risks to the weakest links in the chain: the workers
they employ. For many producers, their labor strategy is
simple: make it flexible and make it cheap," the charity
reported.
(Copyright 2004 Asia Times Online Co,
Ltd. All rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
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