Thursday, June 12, 2008

Questioning corporate responsibility claims

The knowledge that many IntLawGrrls work on the development of transnational norms designed to hold corporations to account perhaps militates against this post, which is spurred by 2 recent IntLawGrrls items (here and here). Conversely, the same knowledge counsels in favor of posting, for the reason that voicing doubts may give rise to a healthy and informative debate.
These days, calls for creation of transnational norms seems de rigueur in human rights circles. That fact is demonstrated not only in IntLawGrrls' prior posts on transnational norms, private contractors, and Alien Tort litigation against corporations, but also by the many symposia (examples here, here and here, and slated for next week, here) that nowadays are devoted to the subject.
The calls have been:
► critical (of corporations); and, at the same time,
► optimistic (about a future in which corporations assume responsibility for the social cost of their activities).
Yet in the end, the conferences have not convinced; at the least, they have yet to convince this attendee.
It is refreshing to hear a corporate mea culpa voiced at such conferences. Still, it is hard for a skeptic not to feel that more than one such corporation simply has assigned to employees -- or even outsourced to outside consultants -- the task of assuaging by apology, even as the corporation itself continues business much along the same lines as usual. It is hard not to assume that paying someone to play this role has become a cost of doing business -- a cost far cheaper than that of making any actual change in practice.
Meanwhile, some aspects of the corporate accountability issue seem to get short shrift:
Economics. There seems far more need for consideration of hard-nosed economics, for an answer to this question: How can critics of current practices make the maintenance of those practices no longer worth the corporation's trouble? Economic imperative seems far more likely to move corporate behavior than voluntary feel-good/sound-good norms.
Enforcement. In the United States, at least, much corporate reform has occurred only at the behest of government-urged regulation. Thus did the novelist Sherwood Anderson mark the birth of "corporate accountability to the community" not in some industry-driven initiative, but rather in the Depression-era government hearings at which "'for the first time ... men of business'" were "'coming up on the platform to give an accounting.'" It was that government-required event that injected "'an entire new principle in American life,'" and the corollary "death knell of the old idea that a man owning a factory or store has a right to run it in his own way.'" (Anderson's quoted on page 303 of The Defining Moment, Jonathan Alter's excellent study of Franklin Delano Roosevelt's 1st 100 days as President).
Some current proposals would invoke the repressive power of many states to punish corporations, an approach I questioned in a 2001 article. At the other extreme are those current efforts that seem to depend on corporate self-control, perhaps buttressed by a "global governance" system not yet in place. The effectiveness of such a regulatory framework remains much in question.
Theory. Statements respecting corporate social responsibility seem to take as given that corporations indeed bear such responsibility, in a manner analogous to responsibility that states bear to persons within their jurisdiction or control. But the proposition is not self-evident. Anyone who looks for inculcation of a corporate social responsibility norm ought to welcome the development and dissemination of rationales privileging that norm over the laissez-faire and free market traditions that retain much rhetorical -- and, indeed, real -- force in today's world.
Having ventured these observations from an admittedly ill-informed vantage point, I welcome others' insights and responses on this critical question of how to hold businesses accountable for what they now seem to manage to deflect as "externalities"; to hold them accountable, that is, for the social costs of doing business.


(image from poster for 2003 Canadian documentary film "The Corporation")

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