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Human Rights and Business Responsibilities in the Global Marketplace

Published online by Cambridge University Press:  23 January 2015

Douglass Cassel
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Abstract:

Communism lost the Cold War, not to pure free market capitalism, but to a range of diverse economic systems based on varying degrees and forms of social regulation of the market. Such social regulation was possible because both polities and economies were primarily national. Since the end of the Cold War, there has been rapid globalization of the economy, but not of effective social regulation. Incipient global political institutions are too weak to regulate global corporate power, while national governments no longer have sufficient reach to regulate large multinationals. Corporate self-regulation has begun, but only haltingly and mostly ineffectively.

While global prosperity has risen dramatically in recent decades, not everyone has progressed since the end of the Cold War. Since 1990 some 55 countries have had declining per capita incomes, while inequality has risen within and between countries. It is too soon to say whether global capitalism will be saved from itself by regulation, just as American national capitalism may have been saved by the New Deal reforms it opposed. As Pope John Paul II has warned, the world must not succumb to a “radical capitalist ideology” which “blindly entrusts” social problems to market forces.

Type
Articles
Information
Business Ethics Quarterly , Volume 11 , Issue 2 , April 2001 , pp. 261 - 274
Copyright
Copyright © Society for Business Ethics 2001

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References

Notes

This article is adapted from a Keynote Address to the Society for Business Ethics and the Social Issues in Management Division of the American Academy of Management, meeting in Chicago, August 7, 1999.

1 G.A. res. 217 A(III), U.N.Doc. A/810 at 71 (1948).

2 Mary Ann Glendon, “Propter Honoris Respectum: Knowing the Universal Declaration of Human Rights,” Notre Dame Law Review 73 (1998): 1153.

3 Milton Friedman, “The Social Responsibility of Business is to Increase Profits,” New York Times Magazine, September 13, 1970, pp. 32, 125.

4 Richard C. Longworth, Global Squeeze: The Coming Crisis for First-World Nations (Chicago: NTC/Contemporary Publishing, 1998), pp. 170–81.

5 G.A. res. 2200A (XXI), 21 U.N. GAOR Supp. (No. 16) at 49, U.N. Doc. A/6316 (1966), 993 U.N.T.S. 3, entered into force, Jan. 3, 1976. For a continually updated list of ratifications, see <http://untreaty.un.org>.

6 Longworth, Global Squeeze, pp. 36–39, 125–55. New York Times foreign affairs columnist Thomas Friedman, admittedly “a little tongue-in-cheek,” calls Japan’s economy one-third free market and two-thirds communist. Thomas Friedman, The Lexus and the Olive Tree: Understanding Globalization ( New York: Farrar, Straus & Giroux, 1999), pp. 334–35.

7 For diverse perspectives of prominent commentators on globalization, compare, e.g., Global Squeeze with The Lexus and The Olive Tree (see notes 4 and 6); George Soros, “Capitalism’s Last Chance?” Foreign Policy 113 (1998–99): 55; Jeffrey Sachs, “International Economics: Unlocking the Mysteries of Globalization,” Foreign Policy 110 (1998): 97; William Greider, One World, Ready or Not: The Manic Logic of Global Capitalism (New York: Simon & Schuster, 1997); Paul Krugman, “Is Capitalism Too Productive?” Foreign Affairs 76 (1997): 79; Ricardo Hausmann, “Will Volatility Kill Market Democracy?” Foreign Policy 108 (1997): 54; Dani Rodrik, “Sense and Nonsense in the Globalization Debate,” Foreign Policy 107 (1997): 19; Jacques Attali, “The Crash of Western Civilization: The Limits of the Market and Democracy,” Foreign Policy 107 (1997): 54; Jeffrey Garten, “Can The World Survive the Triumph of Capitalism?” Harvard Business Review, January-February 1997, p. 144 (reviewing Greider, One World, Ready or Not); Richard Barnet and John Cavanagh, Global Dreams: Imperial Corporations and the New World Order (New York: Simon & Schuster, 1994).

8 For statistics in this and succeeding paragraphs, see United Nations Development Programme, Human Development Report 1999, p. 25; and Global Squeeze, pp. 7–8.

9 Human Development Report 1999, p. 32.

10 Ibid., p. 37.

11 Washington has promulgated a vague, general, and voluntary set of Model Business Principles for multinationals, and has pinned awards on a number of corporate lapels. Douglass Cassei, “Corporate Initiatives: A Second Human Rights Revolution?” Fordham International Law Journal 19 (1996): 1974–76; Debora Spar, “The Spotlight and the Bottom Line: How Multinationals Export Human Rights,” Foreign Affairs 11 (1998): 7–8.

12 Commission on Global Governance, Our Global Neighborhood: The Report of the Commission on Global Governance (New York: Oxford University Press, 1995).

13 Not all multinationals are mammoth. For reminders of this and other differences among multinationals, see John Stopford, “Multinational Corporations,” Foreign Policy 113 (1998— 99): 12.

14 D’ Jámila Salem, “Human Rights Group Targets Disney,” Los Angeles Times, April 30, 1996. (National Labor Organization told House Democratic Policy Committee that “Disney has marketed Pocahontas T-shirts made by impoverished Haitian children and adults, who receive an average of 25 cents for manufacturing a shirt with a retail price of $11.”)

15 For perhaps the most complete survey and analysis available, see Investor Responsibility Research Center, The Sweatshop Quandary: Corporate Responsibility on the Global Frontier (Washington, D.C.: IRRC, 1998); see also International Labor Organization Governing Body, Working Party on the Social Dimensions of International Trade, Overview of Global Developments and Office Activities Concerning Codes of Conduct, Social Labelling and Other Private Sector Initiatives Addressing Labour Issues, ILO Doc. GB.273/WP/SDL/ 1 (Rev.l), 273rd sess. Geneva No.v 1998 (accessible through <http://www.ilo.org>).

16 On Levi’s record and for what follows in the text above, compare the information on the company’s web site, <http://www.levistrauss.com>, especially the section on “corporate social responsibility” under “general information,” with that provided by the Clean Clothes Campaign (<http://www.cleanclothes.org>), which describes itself as consisting of national coalitions of consumer, human rights, labor and women’s groups, researchers, and activists.

17 Frank Swoboda, “Levi Strauss to Drop Suppliers Violating its Worker Rights Rules,” The Washington Post, March 13, 1992, p. Dl; “A Stitch in Time,” The Economist, June 6, 1992, p. 27.

18 International Labour Convention and Recommendations, Convention No. 1, Hours of Work (Industry) Convention (1919), p. 1; Diane Orentlicher andT. Gelatt, “Public Law, Private Actors: The Impact of Human Rights on Business Investors in China,” Northwestern Journal of International Law and Business 14 (1993): 66, 107 (Levi’s), 113–14 (ILO conventions), 125 (quoting Levi’s “Business Partner Terms of Engagement” on working hours: “While we favor partners who utilize less than sixty-hour work weeks, we will not use contractors who, on a regularly scheduled basis, require in excess of a sixty-hour week.”).

19 On wages, Levi’s Business Partner Terms of Engagement provided: “We will only do business with partners who provide wages and benefits that comply with any applicable law or match the prevailing local manufacturing or finishing industry practices.” Quoted in Orentlicher and Gelatt, “Public Law, Private Actors,” p. 125. See the same article for ILO conventions on minimum wages, requiring that account be taken of “the needs of workers and their families.”

20 ”Levi Strauss & Company: Corporate Profile and Case Material,” May 5, 1998, in <http//www.cleanclothes.org/companies/levi>; but see criticisms by the Community Affairs Director for Levi Strauss Europe, reflected in part in “98–12-22, Levi Strauss update from the CCC,” at the same Web site.

21 Levi’s won the 1984 President’s Volunteer Action Award for Corporate Volunteerism for its Community Involvement Teams; the 1997 National Business and Labor Award for Leadership on HIV/AIDS, from the United States Centers for Disease Control; the 1998 Ron Brown Award for Corporate Leadership, awarded by President Clinton for Project Change, an anti-racism initiative in the U.S.; and the Council on Economic Priorities’ America’s Corporate Conscience Award for International Commitment, for Levi’s 1992 code of conduct. See <http://www.levistrauss.com>, “general information,” section on “corporate social responsibility.” As noted below, in July 1999 Levi’s also became one of only a few multinationals to date that have joined the Fair Labor Association.

22 See <http://www.levistrauss.com/about/chairman.html>.

23 The company is owned by descendants of the founder’s family. Its shares are not available for public trading, except in Japan, where Levi Strauss Japan K.K. is publicly traded. See <http://www.levistrauss.com/about/general.html> .

24 In May 1999 Levi’s endorsed a set of human rights principles for U.S. business in China developed by major human rights organizations. Press Statement, May 28, 1999, reprinted at <http://www.cleanclothes.org/companies/levi>. The Code provides, “Our facilities and suppliers shall provide wages that meet workers’ basic needs, and fair and decent working hours, at a minimum adhering to the wage and hour guidelines provided by China’s national labor laws and policies.”

25 In July 1999 Levi’s joined the Fair Labor Association. Press Release, July 19, 1999, at <http://www.levistrauss.com/press/pr_pressrelease>. It thereby committed to comply with the Association’s Charter Document (amended June 1999), whose Workplace Code of Conduct provides: “Hours of Work. Except in extraordinary business circumstances, employees shall (i) not be required to work more than the lesser of (a) 48 hours per week and 12 hours overtime or (b) the limits on regular and overtime hours allowed by the law of the country of manufacture or, where the laws of such country do not limit the hours of work, the regular work week in such country plus 12 hours overtime.” (<http://www.lchr.org/sweatshop/amendedFLA.htm>)

26 The current wage standard in the Code is as follows: “Employers recognize that wages are essential to meeting employees’ basic needs. Employers shall pay, as a floor, at least the minimum wage required by local law or the prevailing industry wage, whichever is higher, and shall provide legally mandated benefits.” The Department of Labor study was completed in early 2000. U.S. Department of Labor, Bureau of International Labor Affairs, “Wages, Benefits, Poverty Line, and Meeting Workers’ Needs in the Apparel and Footwear Industries of Selected Countries,” February 2000. Accessible at <http://www.dol.gov/dol/opa/public/media/press/ilab/ilab2000068.htm>.

27 The Sweatshop Quandary pp. 153–63, 296–306. The Fair Labor Association commits its members to a form of external monitoring by auditors accredited by the Association, but does not mandate that these be local groups. Instead, Principle G of the Association’s Principles of Monitoring requires that the external monitors (who may be, e.g., accounting or management consulting firms) shall “consult regularly with human rights, labor, religious or other leading local institutions that are likely to have the trust of workers and knowledge of local conditions and utilize, where companies deem necessary, such local institutions to facilitate communication.” (<http://www.lchr.org/sweatshop/amendedFLA.htm>)

28 See <http://www.fairlabor.org>. An alternative organization of universities, the Workers Rights Consortium, with 66 members as of November 2000, has also recently been established. See <http://www.workersrights.org>.

29 The Lexus and The Olive Tree, p. 287.

30 Human Development Report 1999, p. 22. It should be noted that these data predate the effects of the Asian and Russian financial crises of late 1997 and 1998.

31 Human Development Report 1999, pp. 2–3.

32 Global Squeeze, p. 3.