Does respecting human rights pay?

Multinational corporations have a reputation for adhering to one set of labor standards in their home countries, and a very different set in the thirld world.

According to Lord Browne of Madingley of British Petroleum and Gary Steel of ABB, such practices will not pay off over the long run. They spoke of their own companies’ concerted efforts to adopt corporate human rights standards and practices. They insisted that respecting human rights can be consistent with the pursuit of profits, but it isn’t easy. Often times, corrupt or incompetent local governments get in the way by allowing foreign corporations to literally get away with murder (my expression, not theirs).

Many members of the audience at the WEF’s Open Forum – which is open to all members of the general public – made it clear in their questions and comments that they weren’t convinced that these multinational corporations are truly serious about human rights.  Nor was David Ugolor, President of the African Network for Environmental and Economic Justice, based in Nigeria.  He spoke of the exploitation of Nigeria’s poor by foreign oil companies. "Voluntary codes of companies will not work and shall not
work," he said.

George Kell spoke of the effort he is leading to get corporations to sign on to a Global Compact, in which signatory companies promise to adhere to ethical labor standards.  He said that while few companies thought this made good business sense when the compact first started, that is changing. Call it peer pressure – and fear of negative publicity for those who don’t sign on.

But Amnesty International‘s Irene Khan believes that while this kind of voluntary compact is a good start, it’s not nearly enough. Corporate behavior must ultimately be held accountable for their behavior by international human rights law.

The trick is, that would have to be enforceable… which is difficult when you’re dealing with countries where corrupt elites are quite happy to line their pockets while unscrupulous investors mistreat their citizens. 

So while some might rail against the evil capitalist corporations as being the source of all evil, the situation is much more complicated.  Governments, with pressure from civil society, must impose real consequences on businesses for bad behavior. But when governments aren’t held accountable for their own bad behavior, what can you do?  Until that problem gets solved, the best way to hold corporations accountable for their behavior is through our consumer pocketbooks. And to do that we’ll need information about what they’re up to — which is why  organizations like Amnesty International, Human Rights Watch, and other newer organizations like AccontAbility are so important.

The webcast for the session will be available on Friday here. Hit the "comments" link and let us know what you think.