Professional Documents
Culture Documents
NGO Strategies For Promoting Corporate Social Responsibility
NGO Strategies For Promoting Corporate Social Responsibility
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ing sense within the human rights community that the major human rights NGOs
must find ways of effectively addressing
abuses of economic and social rights. The
recent focus of many human rights NGOs
on the activities of MNCs in developing
countries has emerged as one way in which
this demand is being met.
Another important reason for many
human rights NGOs increased focus on
MNCs is a desire to find new allies. Human
rights NGOs have traditionally drawn most
of their membership and financial support
from the better-educated, better-travel ed ,
more cosmopolitan segments of society.
Many executives of MNCs fit this profile,
and many businesspeople are pers on a lly
supportive of NGO activities in a variety of
fields. Just as NGOs attempt to attract support and expertise from other professional
groups, some within the NGO community
are actively trying to enlist support from
people in the business world. In some cases
there may be a role for business executives as
potential agents of political influence, for
instance, by interceding with host governments to raise human rights issues. Some
even think that corporations themselves can
be used as levers for progressive social and
economic change, rather than just being
engines of profit.5 Several recent studies
have cautiously suggested that multinational corporations may have a constructive role
to play in conflict prevention and conflict
resolution in the worlds troubled countries.6 A contrary view is also widely held.As
Maria Ottaway notes, during an earlier era
of globalizationempire buildingcharter
companies played a major role in bringing
civilization to the South.She warns against
allowing private corporations to combine
their entrepreneurial activities with the role
of political and moral reformers.7 Likewise,
not all NGOs believe that MNCs can or
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CONFRONTING MNCs:
ENACTING ENFORCEABLE
LEGAL STA N DARDS
The voluntary CSR approach is not the only
NGO strategy. Another influential school of
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the development of international CSR standards. During the 1990s public criticism of
their labor practices,security arrangements,
and other human rights practices in the
global media embarrassed a number of
companies. Some MNCs that have experienced these kinds of crises have now begun
to consider seriously the human ri gh t s
implications of their activities and have
established private voluntary codes of conduct for overseas offices, subsidiaries, suppliers, and contractors. These voluntary
codes generally deal with such issues as
compliance with national and local laws;
nondiscrimination; adequate wage levels;
workplace safety and health; working hours
and overtime; freedom of association and
the right to organize trade unions; prohibitions on child and forced labor; environmental protection; dissemination of company
policies; implementation of company policies by supervisors; and protection for
employees who complain about breaches of
company policies. In addition,some associations of MNCs have developed joint standards, for instance, the Fair Labor
Association for the apparel industry, and
Rugmark for handmade carpets.
But critics of the CSR approach see voluntary codes mainly as corporate propaganda and as means of avoiding strict
government regulation. This crucial difference in political analysis leads to further differences among NGOs in terms of their
tactics in dealing with global corporations.
E VA LUATING STRAT E G I E S :
ENGAGEMENT OR
C O N F R O N TAT I O N ?
In practice, no NGO acts solely as an
en ga ger, nor do any act purely in a confrontational mode; all utilize strategies that
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porations that have committed their companies to the terms of the Global Compact.
Also in attendance were representatives of
several major international human rights
organizations, including Amnesty International, Human Rights Watch, and the
Lawyers Committee for Human Rights.
Amnesty International and Human
Rights Watch, along with several other
NGOs,welcomed the Global Compact initiative, but deliberately stopped short of formally endorsing it, mainly because of its lack
of independent verification and enforcement mechanisms. They saw affiliation with
Global Compact as a first step on the path
toward global corporate social responsibility,
rather than the end of the journey.
At the same time, a coalition of other
human rights and environmental NGOs,
including Corporate Watch, Institute of Policy Studies, Green pe ace International, the
Third World Institute and several others,
issued a press release blasting the GC as
threatening the mission and integrity of the
UN. Joshua Karliner of Corporate Watch,
for one, charged that the Global Compact
partnership and the Guidelines for Cooperation do not ensure the integrity and independence of the United Nations and allow
business entities with poor records to bluewash their image by wrapping themselves in
the flag of the United Nations. 14
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Shareholder Activism
A third approach that is compatible with
voluntary CSR seeks to influence corporate
policy by means of shareholder resolutions.
This technique has been used successfully for
more than thirty years by the Interfaith Center on Corporate Responsibility, which
mainly represents faith-based organizations
pension funds in shareholder actions against
companies.19 Areas addressed in such resolutions include health and safety, tobacco,
weapons, environment, discrimination,
labor and human rights issues, and issues of
corporate governance. Since large pension
funds often hold large numbers of shares in
many major companies,they can often exert
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19
See www.fairlabor.org.
See www.iccr.org.
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pamphlets entitled Visions of Ethical Businessthat make the business case for CSR by
highlighting the practices of the most CSRf ri en dly companies. 23 Most NGOs avoid
praising corpora ti ons for good behavior
out of fear it will undermine their own reputations for independence, but virtually all
NGOs that are active in the field of CSR
employ moral shaming to some extent.
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Government-Imposed Standards
A seventh tactic assumes that only national
governments have sufficient power and
authority to force companies to adopt ethical practices that protect human rights and
the environment.NGOs accepting this view
tend to focus their efforts on enacting legislation at the national or, preferably, the
international level, by imposing enforceable
legal obligations on MNCs. NGO activists
would like to see multilateral trade and
investment agreements such as NAFTA,and
the failed Multilateral Agreement on Investment, incorporate strict and enforceable
standards on labor rights, human rights,and
environmental protecti on . But there are
other legislative initiatives in the works.
In January 1999, the European Parliament
passed a Resolution on Standards for European Enterprises Operating in Developing
Countries. The resolution calls on the European Union to establish legally binding
requirements on European companies to
ensure that these MNCs comply with international law relating to the protection of
human rights and the environment. The resolution proposes that European MNCs be
monitored by a panel composed of independent experts and representatives from
European businesses, international trade
unions, environmental and human rights
NGOs, and the developing world. It also
calls on the European Commission to
ensure that MNCs acting on behalf of, or
financed by, the European Union act in
accordance with basic requirements for
human rights and environmental protecti on . However, this resolution was not
approved by the Commission and did not
become a law. In s te ad , in June 2001 the
Commission issued a green paper on Promoting a European Framework for Corpo-
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Litigation
An eighth tactic being used against some corporations involves holding them accountable
in U.S. courts for human rights violations
committed by them or their business partners. Examples of this adversarial approach
are the suits against Unocal for its role in
Burma, a suit against Texaco for its operations
in Ecuador, and suits against Chevron and
Shell for their alleged involvement in human
rights abuses in Nigeria.27 These suits are
based upon the provisions of the Alien Claims
Torts Act of 1789 (ACTA) that gives U.S. courts
jurisdiction over torts claimed by aliens
resulting from violations of jus cogens norms
of international law such as piracy, torture,
and slavery.
The most famous of these cases is John
Doe v. Unocal Corporation, in which the
plaintiffs, a group of Burmese refugees
presently residing in California,alleged that
Unocal is liable for torts committed against
them in connection with sec u ri ty operations carried out by the Myanmar militar y
during the construction of the Yadana oil
and gas pipeline from Myanmars eastern
Tenasserim region to Thailand. Unocal is a
joint venture partner in this project along
with the French oil company TotalFinaElf,
the National Petroleum Company of Thailand,and the military government of Myanmar, known as the SLORC, or more recently
as the SPDC. The plaintiffs, who are
Tenasserim villagers whose identities have
been concealed in order to protect their
families from reprisal, alleged that the
Myanmar military forced them to leave their
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tudes NGOs encounter. Some major companies are engaged in fighting the ideas of
social responsibility and environmental sustainability and cling to the classical view that
the only social responsibility o f business is
to make money for investors. Others are
basically passive and have no considered
position on CSR issues. Still others have
begun internal discussions about CSR and
human rights issues as they affect their businesses, and are moving cautiously in the
direction of embracing greater social
responsibility for their own operations and
supply chains. In addition, there are a few
leading companies that have turned the corner by formally and publicly accepting the
view that they should base their business
practices on international human rights and
labor standards,and adopting codes of conduct or business principles that embody this
commitment. Finally, a few companies have
made serious attempts to implement such
commitments by educating their own
employees,identifying and operationalizing
performance benchmarks, communicating
their standards to their suppliers and business partners, carrying out internal audits,
and in some cases seeking external independent auditing to verify their social performance to external stakeholders. What
progress has been made on CSR thus far is
largely the result of NGO activism.
On the positive side one can see the
engager/confronter split as an example of a
good copbad cop interrogational strategy
in which the confronters push MNCs to put
human rights onto their agendas by means
of stigmatization and economic pressure,
while the engagers pull them further toward
corporate social responsibility by means of
ethical and prudential reasoning. This combination of push and pulltactics appears
to have worked in several cases. Since the
confronters make it their business to dig up
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rily to moral persuasion. This general conclusion is amply supported by recent developments in a va ri ety of industry sectors,
most notably the pharmaceutical industry,
which bowed to public pressure to allow
generic versions of proprietary HIV/AIDS
drugs to be made available to developing
countries. In the future, more companies
may seek to avoid the risks associated with
such negative publicity by adopting and
implementing a comprehensive human
rights code of conduct before they have been
spotlighted and publicly shamed.
C O N C LU S I O N
NGOs cannot really force corporations to
do anything, and their attempts to influence
corporate behavior by means of any combination of strategies and tactics are unlikely
to be successful in the long run unless they
are able to mobilize two other important
constituencies: consumers and governments. Recent studies of consumer preferences have consistently found that
consumers are motivated to avoid purchasing products that they know are being made
under abusive labor conditions. However, as
the authors of one of these studies conclude:
The implication is that firms can lose greatly
from having their products identified as being
made under bad conditions but have only limited space to raise prices for products made
under good conditionsunless consumers see
competing products as made under bad conditions. The differential consumer response to
information about good and bad conditions
helps explainthe behavior of activists and
firms in the market for standards.31
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