Ask More of Business

Asking More Commentary: Perspectives from Mendoza College of Business

Commentary Post - Oliver F. Williams, CSC

The UN Global Compact and doing the right thing

August 16, 2012

Big business has been behind some nasty things in its time: Deals with questionable governments; disappearances in Mexico; child labour in Pakistan; diamond smuggling in Sierra Leone; curtailing the right to freedom of expression in China; and the list goes on.

In fact, human rights activists and their organizations have mushroomed all over the world, bringing these often hidden stories to the surface, making the business of human rights abuses everyone’s business.

One central document on which some of these issues pivot is the UN Global Compact. Almost 12 years old now, the idea was to gather the most powerful businesses in the world to join in on the fight against human rights abuses, to tell companies like Nike – who were found to be in violation of human rights in the nineties: ‘Just DON’T do it’. Nike is now a member of the UN Global Compact and is considered by many activists to be a model company in the way it insists on humane treatment of its subcontractors’ workers.

The principles basically call on business to support and respect the protection of human rights. The Compact demands that business does not use forced labour and child labour and that it allow the workers to make free decisions on collective bargaining, while abolishing discrimination in the workplace. Business has also to nurture the environment and work toward the elimination of all forms of corruption.

John Ruggie, Special Representative of the UN Secretary General for Business and Human Rights, was tasked with defining exactly what the obligations are for business in regards to human rights in relation to the Global Compact. He was commissioned to do this work because the corporate world had thrown up its collective hands in protest against a UN subcommittee proposal at the start of the millennium that equated business’s responsibility with that of the state.

After five years of research Ruggie proposed: protect, respect and remedy. His main justifications being that “doing harm” has adverse economic impacts on business. The obligations for business, however, are limited. Governments have the duty to protect and promote human rights while business has to respect them, that is, make sure it does not in any way violate the rights of others. Both have the duty to set up processes to adjudicate allegations of rights violations.

Although companies can join the UN Global Compact, with its ten principles of adherence, and some companies are involved in furthering UN Millennium Development Goals, for the most part there is at present no generally accepted rationale that mandates that business take on some of the problems of the wider society as a matter of moral obligation.

Increasingly business leaders are feeling – and articulating – the moral squeeze. Sometimes they do good because it makes business sense. For example, a powerful soft drinks company is distributing HIV medicine and literature along its distribution route in Africa because, as one of its executives said off the record: ‘sick people don’t drink’ soft drinks.

But then other multinationals are acting on moral grounds, where they are not obliged to do so by any other set of principles.

In 2000, MSD/Merck Company Foundation partnered with the Government of Botswana and the Bill and Melinda Gates Foundation to form the African Comprehensive HIV/AIDS Partnership (ACHAP). Initially, the two foundations committed US$50 million each over five years. In addition Merck & Company Inc donated two antiretroviral medicines, Crixivan and Stocrin, to be distributed for free. In 2008 it donated another two: Isentress and Atripla.

Merck’s mission statement on the ACHAP website hints to a moralistic approach to what the company does.

“Our responsibility is to marshal our expertise and capacity in cutting-edge science to discover and develop breakthrough medicines and vaccines that will save lives and spare human suffering.”

Since ACHAP, over 90 000 patients have enrolled in the Botswana government’s ARV treatment program, 1 100 healthcare workers have been trained, more than 500 schools have been reached by the HIV education program, and the capacity of community organizations to support people living with the disease, orphans and families has increased.

There are companies in the world that are filled with people who want to do good, who want to be proud of their work and of their companies, like the scientists at Merck.

There are many who feel business should never yield so much influence and others who feel that society should not expect business to ‘step in for the state’ where the state fails or is incapable of adequate action. But is this not short sighted? Particularly in the developing world where governments are weak and social need huge, there is a tremendously important role that business can play in creating stable, healthy societies that will benefit everyone. Business can play this role not only because it has the power and influence to make a difference, but, perhaps more importantly because it has the management skills to get things done.

All organizations producing goods and services have an implied contract with society. And companies have a duty to be socially responsible. This includes honoring human rights. It does not just make good business sense – it is quite simply, the right thing to do.

Note: This article originally was published in the University of Cape Town Graduate Business School Newsline.