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Keeping an eye on business
Most people would not have enough faith in companies to regulate themselves and corporations with a sense of awareness would agree that they need some direction in being socially responsible. "The responsibility of companies extends not only to how they treat their workers, but how they relate to the communities in which they operate," said Irene Khan, Secretary General of Amnesty International at the Global Compact Summit in Beijing. There has been international recognition that economic globalization has extended the reach of corporate power and responsibility; the UN ratified the Human Rights Norms for Business in 2003, following on from the UN Global Compact. It calls for companies to adhere to some basic but essential practices such as ensuring workers' fundamental freedoms and provide them with secure environments. (Read more about the UN Human Rights Norms for Business.) Both are voluntary for companies to sign up to and neither is legally binding. Ultimately it is still down to companies to take more responsibility for their actions and improve their practices. One organization that is both guiding and educating companies in their social responsibilities is Verité - a non-profit organization set up in 1996 by social entrepreneur Heather White. International corporations like Gap, Levi Strauss and Timberland have employed Verité to show them how they bring positive changes to their workplaces and supply chain, and promote better conditions for workers.
"Most have embraced this, but in different ways, some effectively and some very defensively and not effective." Some may adopt a better attitude after being shamed into it. Nike was exposed in the1990s by many non-governmental organizations (NGOs) as complicit in the use of sweatshops. Its reputation took a battering, but it cleaned up its act and now employs a monitoring process of its factories and publishes addresses of its suppliers on its web site. PEOPLE POWER If some companies are seizing the initiative to be more responsible, the role of other groups representing civil society is just as important in keeping them on their toes and bringing changes to the workplace. "The role of civil society in reaching this stage is absolutely fundamental, companies can't function without it. That's why Verité is set up to have partnerships with NGOs around the world, so these issues can be taken on locally and directly." Working in over 65 countries Verité has partnerships with other NGOs advocating and acting to uphold the rights of workers across the globe. "Corporations are moving responsibility for labor conditions away from head offices in London, Seattle and Brussels, so it makes sense to have more involvement from local NGOs," says Viederman "Often the factories themselves are given responsibility, where awareness of the importance of labor conditions isn't high. It needs to be met by a local response as well as need to be pushed internationally." One established group that Verité has worked closely with is the Association for Stimulating Knowhow (ASK). The Indian organization has been operating in India for longer than Verité, finding creative solutions to problems surrounding child labor and Indian companies' corporate social responsibility programs. Through Verité's help, ASK has been able to enter into direct dialogue with global corporations. "We've also been able to educate and train those on the other side, the corporate leadership level," says Viederman. OPENENING UP TO A CHANGING WORLD The openness of companies is also key. The biggest advances are being taken by companies that are openly sharing the kinds of problems they find and identifying those that they promise to solve.
"We're increasingly able to draw a clear line between the companies that are improving their practices towards worker's conditions and those that aren't." "We know how to measure companies that are laggards. Some companies are trying very hard to get it right and can be the equal of NGOs in exploring the ways in which they can improve their situation. But companies will always need some kind of external regulatory mechanism," says Viederman. "The global balance of corporate power is shifting. A company started by an Indian entrepreneur is the word's biggest steel maker, China will soon be the world's biggest market, Singapore is the leading producer in the disk drive industry," said Khan In such a dynamic environment, Viederman believes there are new and unusual challenges ahead, not least from China. "It's an intensely competitive environment, where it's overwhelmingly oriented towards the private sector with little government regulation and a top-down structure that doesn't really value participation by workers in deciding on conditions." "In such an environment of shifting power, we need consistent rules," said Khan, Until then companies that hold social responsibility as important as other parts of their business will only amount to a small minority, but perhaps a future with more grassroots advocacy and NGOs like Verité can help that number grow. What do you think? Have your say on any of the issues and join the discussion. Name: MS Ramamurthy The initiative is most timely. We have a role to play in making corporations as well as government agencies accountable to general wealth. Name: Rita Mishaan What about environmental standards? What is taking place in China and what are multinationals doing to protect the environment or evolving towards clean industries? Name: Charles Business can profit without abusing the very people that work for them and the environment. Obviously no one is watching big business who have got a free pass on every violation of human rights and environmental policy since the Bush administration has been in office. Clinton proved this during his administration so why can't these guys? |
Who makes sure companies act responsibly? Corporations don't operate free of regulations but labor laws and government attitudes to business practices vary from country to country.
"Companies no longer deny that they have a role to play, that workers in their supply chains should work in good conditions," says Verité executive director Dan Viederman.
"Companies that are transparent in their reporting are really leading things right now. But a lot of companies still aren't talking openly about what they find," says Viederman.
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