Regulating corporations
Lozada, Carlos
OF SEVERAL MINDS CARLOS LOZADA REGULATING CORPORATIONS Should the UN do it? On August 13, a little-known entity in the massive UN bureaucracy produced a seemingly innocuous draft document called...
...The document-yet to be approved by the full UN Commission on Human Rights-represents a significant departure from past UN efforts in this area, which have tended to stress voluntary codes of conduct for global corporations...
...Should their compensation be different, even for similar work...
...Moreover, the draft states that multinational corporations "shall respect civil, cultural, economic, political, and social rights, and contribute to their realization...
...like so many other multilateral documents, this draft lays out the UN vision of what someday should be- not of what is or can be today...
...We don't have a problem at all with efforts that seek to encourage companies to do what they can...to protect human rights," contended Ste-fano Bertasi of the International Chamber of Commerce, in the Financial Times...
...Such remuneration shall take due account of their needs for adequate living conditions with a view toward progressive improvement...
...and the provision of a safe and healthy working environment...
...prohibition against forced labor...
...Rights activists favor the new norms, pointing to the enormous social, political, and economic influence international businesses exert...
...To what extent can your critics claim you benefit in any way from human-rights abuses committed by your business partners...
...We have a problem with the premise and principle that the norms are based on...[W]e see them as conflicting with the approach taken by other parts of the United Nations that seek to promote voluntary initiatives...
...Nevertheless, unrealistic or unenforceable rules only discredit the larger enterprise and risk obscuring the worthier and more practical norms that the United Nations wishes to promote...
...Worse yet, the twenty-six-nation sub-commission includes Cuba, Russia, China, Mozambique, and Belarus-not exactly the most credible advocates of human rights or transparent business practices...
...nondiscrimination on the basis of race, sex, language, nationality, and religion...
...If it should, is this document a useful first step...
...For example, the document states that transnational businesses shall "provide workers with remuneration that ensures an adequate standard of living for them and their families...
...Moreover, the United Nations would require national governments to introduce legislation that ensures compliance...
...Supporters will note that many of the draft norms seem commonsensical and reflect national laws in many rich countries...
...Sounds terrific, but who defines "adequate living conditions...
...And what if different workers have different needs...
...If UN efforts to hold governments to task on human rights have failed, then this new draft document aimed at multinational corporations is not a step forward for the cause of human rights...
...Of course, voluntary codes of conduct are often little more than window dressing for multinationals...
...They include equality of employment opportunity...
...However, his recommendations-addressed to a generic multinational CEO from a fictional general counsel-are based on perception of human rights, not reality...
...Yet, by charging the world's transnational corporations with the task of upholding and promoting the full range of human rights, the United Nations is also admitting defeat...
...Little surprise that business leaders are fighting back and expressing their support for public but voluntary codes of conduct...
...Schrage asks the world's CEOs...
...And how are corporations suited to promote the "realization" of cultural and political objectives...
...It is merely Plan B. Carlos Lozada is the managing editor of Foreign Policy magazine...
...In many ways, the UN norms are as-pirational...
...With rights champions like these, who can blame the United Nations for looking askance at corporate voluntary codes of conduct...
...To borrow from the language of economics, what is their comparative advantage in such areas...
...Note how the questions reflect a fear of liability more than any stated concern for human rights...
...Other proposed norms are as vague as they are ambitious, and could produce enormous enforcement difficulties...
...In practice, what does that mean...
...Despite countless human-rights treaties and norms governing the behavior of nation-states-the very nation-states that make up UN membership-this new document implicitly acknowledges that individual countries are no longer able to uphold human rights for their citizens or other citizens, if they ever were...
...Moreover, can the United Nations, with its culture of compromise and dependence on the major powers, become an independent arbiter of business and human rights...
...On August 13, a little-known entity in the massive UN bureaucracy produced a seemingly innocuous draft document called "Norms on the Responsibilities of Transnational Corporations and Enterprises with Regard to Human Rights...
...Even so, should the United Nations be the body that regulates that global corporate influence...
...In an unwittingly revealing article in the August issue of the Harvard Business Review, Elliott Schrage of the Council on Foreign Relations cautions that "human-rights claims should be a pressing concern to every global company...
...companies violating the norms would provide reparations to all those harmed...
...Issued by the UN subcommis-sion for the promotion and protection of human rights, the document lays out an extraordinary and unprecedented proposition: The United Nations would regulate the behavior of multinational corporations across a broad range of human rights issues, and would monitor their behavior to ensure compliance...
...To what extent can your critics claim you benefit in any way from government human rights abuses...
Vol. 130 • September 2003 • No. 15
