Articles by McGrigors
30 September 2006
Profiting from an ethical approach?
(Published The Times)
Multinationals are starting to make an issue of their human rights obligations. Christine Seib asks whether it goes any further than the corporate brochure.
It sounds like the very model of a modern multinational. "We conduct our business with uncompromising integrity and strive to live up to every one of our commitments to our customers, partners, employees and shareholders." So runs the boast on the corporate website.
There is more in the business ethics section: "There is no substitute for personal and professional integrity. Doing well and doing good can go hand in hand. Trust and respect have always been the cornerstones of our success." You might nod approvingly, until you learn whose website this is. The ethical blustering comes from Hewlett-Packard, renowned these days for putting private investigators on the tails of its own directors, firing off tracer e-mails, planting false information and tapping the phone records of pesky journalists.
HP's recent travails are a gift for cynics who see a huge gulf between the shiny corporate social responsibility bro-chures of multinationals and their activities in the real world.
Research from McGrigor Rights, the human rights consultancy, shows that only 82 of the world's 80,000 multina-tional companies have set specific internal regulations to ensure the protection of human rights. Yet Alan Miller, a di-rector of McGrigor Rights, believes that companies are gaining a better understanding of the importance of protecting the human rights of their employees and the citizens of countries in which they operate.
Speaking at a debate this week titled Outside the Comfort Zone: Business Obligations on Human Rights, Professor Miller said that globalisation has handed giant multinationals as much economic and political clout as some govern-ments. At the same time, however, technological advances have given an increasingly sophisticated population the means to monitor whether companies are using their new power responsibly.
"Public perception and expectations of business have changed and if something bad takes place in a far-flung cor-ner of the world, it can be on the internet within minutes," he said. "There are still a relatively small proportion of com-panies who are discussing and developing human rights policy, but it represents a trend that's identifiable and growing. Some see it as a risk management or brand issue and others see it as a way of bringing about business opportunities."
Gareth Crossman, director of policy at Liberty, the human rights organisation, believes that the troubles of British executives on trial in the United States have brought home to high-flying company executives the importance of human rights, for the first time.
"The Natwest Three struck a real chord with a lot of people in the corporate sector," Mr Crossman said. "It helped people realise that human rights are not just things brought up in terrorism trials; they can just as easily be about white collar crime."
This new sense of responsibility has put companies that operate in emerging markets, where corruption is rife, in an awkward position, according to Karina Litvack, the head of governance and socially responsible investment at F&C Asset Management. "Companies are increasingly having to step into a vacuum created by a weak government," she said. "They are being asked to be the world's police, to do things that are, essentially, society or the government's job."
John Rugge, the United Nations special representative on human rights, is a year into his two-year appointment, at the end of which he will produce a set of recommendations on the human rights responsibilities of the business commu-nity.
Organisations such as the Business Leaders Initiative on Human Rights (BLIHR) are working alongside the UN on developing a framework in which companies can operate. Professor Miller said that such co-operation between non-governmental organisations and companies was blossom-ing. BLIHR was founded in 2003 and is now co-ordinated by 11 global giants, including MTV, National Grid, Novartis, The Body Shop, Gap...and Hewlett-Packard. When it comes to human rights, the business world may still have some distance to go before it practices what it preaches.
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