Monthly Archives: October 2016

Beyond corporate social responsibility – rethinking the international business agenda

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Globalization and the growth and reach of the international private sector raise tough questions for progressives about the regulation and governance of transnational corporations (TNCs). While considerable progress has been made over the last few decades in holding large companies to account for their environmental performance, progress on social issues such as human rights, corruption, corporate transparency and labour standards has been more limited.

So far, the main way in which progressives have sought to address these issues has been through support for corporate social responsibility (CSR). For most companies, this has consisted of a series of voluntary initiatives to enhance the social impact of their policies, with some of these initiatives actively promoted by government. In the UK, for example, leading CSR bodies like the International Business Leaders Forum have developed substantive human rights agendas and the new FTSE4Good indices benchmark companies on their CSR performance. The UK Government has also been a strong supporter of the Ethical Trading Initiative (ETI), which aims to promote adherence to ILO core labour standards along companies’ international supply chains.

Some corporate sectors have incorporated human rights provisions into their codes of conduct. A number of companies have also sought to work more closely with human rights NGOs in formulating corporate policy in difficult countries. BP, for instance, has adopted this approach: working with Amnesty International after serious concerns were raised about the human rights impact of the Baku-Tbilisi-Ceyhan (BTC) pipeline project.

But while CSR has brought benefits, it also has serious limitations. Many of the most difficult issues surrounding the international corporate sector occur in poor countries with weak and sometimes corrupt systems of government. Poorly regulated international investment in these environments can distort local development, fuel conflict and contribute to human rights abuses. This is particularly the case in poor countries that are heavily dependent on natural resources. World Bank research has shown that around 50 armed conflicts, active in 2001, had a strong link to natural resource exploitation, and that the international private sector is often involved in this resource extraction. As a result of weak management and regulation, abundant natural resources, which should be a blessing for a low-income country, in many cases make poor people poorer.

In response, progressives should support a strengthening of political and economic institutions in such countries, so that their governments are more accountable and effective and better able to regulate the private sector in the public interest. But progressives should also support a strengthening of cross border corporate accountability and more effective global regulation of TNCs.

The case for more effective regulation is further reinforced by the fairly limited impact of some existing international initiatives for promoting high corporate standards, for example, the UN Global Compact, the OECD Guidelines on Multinational Enterprises, and the Extractive Industries Transparency Initiative.

The UN Global Compact

The UN Global Compact was established at the instigation of the UN Secretary-General in 1999. The Compact brings together the private sector and NGOs with UN member states and UN agencies. It is based on nine core principles covering human rights, labour standards and the environment. Companies that sign up to the Compact are required to ensure that they support and respect human rights within their sphere of influence.

But while the Compact has played a role in drawing attention to the responsibilities of the private sector in relation to human rights, labour standards and the environment, it is not yet having any real impact in influencing and changing corporate policies on the ground. There are no conditions of membership or criteria that companies must meet before they are permitted to become a member of the Compact and no system for dealing with complaints made against specific companies.

Progressives should support clearer criteria for membership and a system of independent monitoring of company compliance with the principles of the UN Global Compact. There is also a case for introducing a proper complaints system, either through a small executive committee or through an appointed ombudsman.

The OECD Guidelines on Multinational Enterprises

The longest standing initiative for promoting high corporate standards is the Organisation for Economic Co-operation and Development (OECD) Guidelines on Multinational Enterprises. First adopted in 1976, the Guidelines have been endorsed by all 30 members of the OECD, and a further eight non-OECD countries. They set out a comprehensive list of guidelines for good corporate behaviour, including guidelines on human rights and labour standards.

The OECD Guidelines contain a mechanism – reporting through national contact points (NCPs) – with the intended purpose that signatory governments should respond to concerns raised about specific companies, including adverse impacts on human rights. But this mechanism is weak and ineffective. For example, in October 2002, the UN Expert Panel on the Illegal Exploitation of the Natural Resources of the Democratic Republic of Congo named over …

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In defence of the mass media

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In many Western democracies, the relationship between politics and the media is becoming increasingly tense. Several recent clashes between politicians and journalists attest to this. In the UK, allegations that the Government had ‘sexed up’ its dossier on Iraqi weapons of mass destruction led to a protracted battle between the government and the BBC, culminating in the resignation of the BBC Chairman and Director-General. In Italy, the President of the board of RAI, Lucia Annunziata, announced earlier this year that she was stepping down o make it clear that the bounds of pluralism have been overstepped and that this board is operating illegitimately [1] – a reference to the new media ownership law that left the Berlusconi empire intact. In Spain, the state press agency EFE and several other media outlets were accused (and found guilty) of colluding with the Aznar government to maintain the fiction that ETA was behind the March 11th bombings in Madrid, just days ahead of a general election.

There are other, more latent signs of tension as well. Politicians from both ends of the political spectrum have suggested that the media are out of control and something must be done. From the Right, newspapers and television and radio stations are under attack for their alleged promotion of liberal, anti-establishment and immoral attitudes and values. Violent films, reality TV and sexually explicit programming are said to contribute to the degeneration of moral and ethical standards in society. Public broadcasting is accused of left-wing bias. Dutch Justice minister Piet Hein Donner is one of the standard-bearers of this tendency. In November 2003, he complained that satirical TV programmes aimed at the royal family threatened to undermine the stability of the monarchy. In May 2004 he issued a warning, during a speech to a conference on the media, that press freedom is not absolute. He argued that an increasing share of the government’s workload consisted of correcting erroneous reporting by journalists. In any other sector of the economy, the minister said, he state would already have intervened. While much of the public as well as many journalists and politicians shared Donner’s concerns about the quality of programming and reporting, his thinly veiled threat to legislate against media excesses was seen as an outright attack on the freedom of the press.

From the Left, the media are charged with a lack of factual accuracy (and a refusal to correct mistakes, such as in the case of the BBC’s reporting over the ‘sexed up’ dossier on Iraqi weapons of mass destruction), an obsession with trivial issues over serious reporting and an editorial policy increasingly influenced by commercial considerations. TV programming is being ‘dumbed down’ to suit the tastes of a larger audience. Public broadcasting’s eagerness to prove its neutrality, the Left complains, leads to the Right being given an easy ride, and its negative portrayal of the political world leads to voter cynicism and a lower turnout at elections. Furthermore, the concentration of private media companies in the hands of a few powerful (and generally right-wing) magnates means that the pluralism of the media landscape is under threat. On the 22nd of April 2004, the European Parliament adopted a report by Dutch social-liberal MEP Johanna Boogerd-Quaak on freedom of expression and information in the EU, in which these concerns were underscored. The report focused in particular on the Italian situation, where here could be a risk of breaches of the right to freedom of expression and information [2]. The Parliament noted that in Italy he level of concentration of the television market is currently the highest within Europe (…) One of the sectors in which the conflict of interest is most obvious is advertising (…) The Italian system presents an anomaly owing to a unique combination of economic, political and media power in the hands of one man – the current President of the Italian Council of Ministers. The report was adopted only after surviving a filibuster by the Right, led by the Parliament’s largest political group, the European People’s Party (EPP), of which Italian Prime Minister Silvio Berlusconi’s Forza Italia is one of the component parts.

The developments and views described above have caused a certain amount of confusion and uncertainty among progressives. At a recent meeting of the Policy Network Democratic Renewal Working Group in Rome where this topic was discussed, the participants from the political world spoke in defence of the media whereas the journalists present were mostly critical of their own profession. In the wider world, the centre-left has tended to focus on the negative aspects of the way the media have developed over the last decade or so. I believe that to be a mistake. By effectively forming an alliance of convenience with the neo-conservative critics of broadcasting standards, the centre-left runs the danger of …

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