By Fazila Farouk · 13 Sep 2008
In June this year, the United Nations (UN) extended, Special Representative on Human Rights and Business, John Ruggie’s mandate to continue finding solutions to bridge the gap between business and human rights.
Ruggie’s work is largely aimed at addressing the perils of globalisation given the increasing mobility of big companies marching across the planet in search of the best labour deals in the most pliable working environments
The corruptive power of the mighty corporation has been well documented. Its moral misdemeanours not even escaping Hollywood’s attention, as we saw in Oliver Stone’s 1987 movie, Wall Street, a path breaking movie for its time, even inspiring a recent academic paper.
Two decades on, the herculean presence of corporations and their growing wealth continues unabated. Of the 100 largest economies on earth today, 51 are corporations, says scholar of international trade and sustainability, Annie Leonard.
Susan George, author of “A Fate Worse than Debt” unambiguously demonstrates the inequity of the situation when she argues that Tanzania, a country with a gross national product of 2.2 billion dollars, has to share this between 25 million people; whereas Goldman Sachs, an investment firm raking in annual profits of 2.2 billion dollars, shares these among 161 partners. "That’s the world we’re living in now", she says.
The growing wealth of corporations can in large part be attributed to the manner in which they’ve externalised costs, contends Leonard in a superb interpretation of the materials economy in her must-see documentary, “The Story of Stuff”.
Scant regard for human rights and environmental protection is widespread in the supply chain of the 21st century. Big companies don’t absorb production costs. The beauty of the current system lies in the fact that this cost is not even passed on to the consumer. Production costs are borne by our planet (global warming as a result of the plunder of natural resources) and the poor (growing inequality due to excessive exploitation). Thirty percent of the children in the Congo have dropped out of school to mine coltan, a metal needed for the production of cheap electronics, reveals Leonard.
The evidence against business is mounting and the UN appears determined to develop a set of norms and standards to reign in the unethical escapades of big companies. But, the UN’s “Norms on the Responsibilities of Transnational Corporations and other Business Enterprises with regard to Human Rights”, has been challenged by business groups. Key among the detractors is the International Chamber of Commerce.
Mary Robinson, former UN High Commissioner for Human Rights, revealed this fact at a conference about globalisation and business ethics, which took place in South Africa in January 2007. The conference, hosted by the Foundation for Human Rights (FHR), was aimed at introducing the concept of human rights policy making to South African businesses -- a group conspicuous by their absence at the event.
Just more than a year later, the topic was broached again by The South African Human Rights Commission (SAHRC) when it hosted the “Business, Development and Poverty Conference” in March 2008.
Both the FHR and SAHRC conferences were launch platforms, seeking to engage in a constructive dialogue with South African businesses about the adoption of a human rights policy framework. They covered similar topics, including human rights in the work place, corporate governance, extractive industries and the march into Africa – amongst others.
However, the cautiously optimistic statement released by the SAHRC after the March 2008 conference is telling of a partnership where one side appears more willing and eager to engage than the other.
South African businesses continue to show little interest and/or understanding of the concept of human rights in economic development. After all, many comfortably made their millions during the apartheid era when it was required by law to violate human rights. Something they happily co-existed with.
Consider for a moment the findings of the “State of Responsible Investments in South Africa” survey, released by the United Nations Environment Programme Finance Initiative in 2007. This is a survey of how the South African investment community perceives and approaches environmental social and governance (ESG) issues when making their investments.
To quote the report: “The survey interviewed principal officers from 32 pension funds controlling approximately ZAR 975 billion (US$ 138 billion); the Chief Investment Officers from 19 asset management companies managing approximately ZAR 2 320 billion (US$ 330 billion); and the Chief Operating Officers or Heads of Research from 11 investment advisory service providers.”
The key finding of the survey is that while many of the respondents thought that ESG has ‘some material value’, many are doing nothing about it, primarily because of the belief that responsible investing yields lower financial returns.
It is of great concern that only 16 percent of those surveyed had even heard of the concept of responsible investments before the survey.
One of the barriers to responsible investing particularly relevant to this discussion is the fact that fund managers “do not want to get involved with ethical and moral debates”.
This is the attitude that concerns both local and international human rights agencies most.
South African companies have a long way to go before they fully comprehend the scope of the changes they will have to adopt to engender a healthy respect for human rights. Simply placing a paper-recycling bin next to the photocopier won’t cut it.
Short-term Profits are Blind Profits
Corporations are so focused on short-term profits that they often fail to implement the long-term strategies necessary to ensure their survival. So, like cancers, they destroy the environment that gives them life. Perhaps the corporation of the future will have evolved into something other than a tumor.