Oh, Behave!Voluntary Codes Can Make Corporations Model Citizens In 1851, Great Britain Great Britain, officially United Kingdom of Great Britain and Northern Ireland, constitutional monarchy (2005 est. pop. 60,441,000), 94,226 sq mi (244,044 sq km), on the British Isles, off W Europe. The country is often referred to simply as Britain. organized the first world's fair world's fair: see exposition. world's fair Specially constructed attraction showcasing the science, technology, and culture of participating countries and enterprises. , which attracted some six million visitors to London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. . By comparing foreign and British products, the "Great Exhibition" celebrated British industrial prowess PROWESS Infectious disease A clinical trial–Recombinant Human Activated Protein C [Zovant™] Worldwide Evaluation in Severe Sepsis . It implicitly im·plic·it adj. 1. Implied or understood though not directly expressed: an implicit agreement not to raise the touchy subject. 2. highlighted British democratic capitalism Democratic Capitalism is an economic ideology based on a tripartite arrangement of a market-based economy based predominantly on economic incentives through free markets, a democratic polity and a liberal moral-cultural system which encourages pluralism. as a model for other nations to follow. One hundred fifty years later, the British are again advancing a new vision of how democratic capitalism should evolve Evolve may refer to several terms:
The extent to which businesses are socially responsible in meeting legal, ethical and economic responsibilities placed on them by shareholders. The aim it to create higher standards of living and quality of life in the community in which it operates, while . They seemed to understand early on that policymakers would need new tools and strategies to govern globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation . In 1990, Prince Charles Noun 1. Prince Charles - the eldest son of Elizabeth II and heir to the English throne (born in 1948) Charles formed the Prince of Wales Prince of Wales switches places with his double, poor boy Tom Canty. [Am. Lit.: The Prince and the Pauper] See : Doubles Business Leaders Forum to promote responsible business practices in Britain Britain (brĭt`ən), alternate term for Great Britain, comprised of England, Scotland, and Wales. Often used synonymously with the United Kingdom, the name Britain is derived from Britannia, and around the world. On March 7, 2000, Dr. Kim Kim orphan wanders streets of India with lama. [Br. Lit.: Kim] See : Adventurousness Howells became Britain's Minister for Corporate Social Responsibility. Dr. Howells is the first government minister in the world to have such a portfolio. He is working to convince business that corporate social responsibility "can create win-win win-win adj. Of or being a situation in which the outcome benefits each of two often opposing groups: a win-win proposition for the buyer and the seller. situations for both business and communities." However, policymakers, activists, and executives are finding it is not easy to create win-win situations for all the stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. in the global economy. Citizens have become more vocal vo·cal adj. 1. Of or relating to the voice. 2. Capable of emitting sound or speech. vocal pertaining to the voice. in demanding that global business be held accountable for conduct that could undermine undermine, v to separate surgically the skin or mucosa from its underlying stroma so that it can be stretched or moved to cover a defect or wound. economic, social, or environmental progress. Yet there is no road map for how firms should operate around the world. Nor is there one set of norms for governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. the global corporation. Globalization puts governments in a bind. On the one hand, policymakers want to encourage further economic integration. All nations--rich and poor alike --need the investment, technology, employment, and cost efficiencies global firms bring to national economic growth. At the same time, most policymakers want to ensure that such corporations don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. despoil de·spoil tr.v. de·spoiled, de·spoil·ing, de·spoils 1. To sack; plunder. 2. To deprive of something valuable by force; rob: the environment, produce defective defective adj. not being capable of fulfilling its function, ranging from a deed of land to a piece of equipment. (See: defect, defective title) products, or abuse workers. Yet while they must act to cushion Cushion In the context of project financing, the extra amount of net cash flow remaining after expected debt service. cushion See call protection. citizens from the side effects Side effects Effects of a proposed project on other parts of the firm. of capitalism capitalism, economic system based on private ownership of the means of production, in which personal profit can be acquired through investment of capital and employment of labor. , such as environmental degradation Environmental degradation is the deterioration of the environment through depletion of resources such as air, water and soil; the destruction of ecosystems and the extinction of wildlife. , policymakers are less able to regulate reg·u·late v. 1. To control or direct according to rule, principle, or law. 2. To adjust to a particular specification or requirement. 3. To adjust a mechanism for accurate and proper functioning. 4. at the national level because such regulation may make their nations less attractive to global investors. Thus, those activists and policymakers who want to promote global business citizenship citizenship Relationship between an individual and a state in which the individual owes allegiance to the state and in turn is entitled to its protection. In general, full political rights, including the right to vote and to hold public office, are predicated on citizenship. must find a strategy that holds corporations accountable without thwarting thwart tr.v. thwart·ed, thwart·ing, thwarts 1. To prevent the occurrence, realization, or attainment of: They thwarted her plans. 2. the many benefits that such companies bring to their stakeholders. As a result, a growing number 6f policymakers have focused on promoting global corporate citizenship. To many analysts, voluntary codes of conduct are an attractive alternative to direct regulation. They are formal statements of the values and business practices of a corporation. While they are non-binding, many companies expect their employees to be guided by such codes everywhere they operate. Some companies have had codes of conduct since the Nineteenth Century. But after the ITT ITT Initial Teacher Training (UK) ITT I Think That ITT Invitation To Tender ITT Individual Time Trial (professional cycling) ITT Intention-To-Treat ITT In This Thread (forums) scandal Scandal See also Controversy. Scapegoat (See DUPERY.) Abélard, Peter (1079–c. 1144) French theologian takes Héloïse, abbess, as lover; marries her in secret. [Fr. Hist. in Chile Chile (chĭl`ē, Span. chē`lā), officially Republic of Chile, republic (2005 est. pop. 15,981,000), 292,256 sq mi (756,945 sq km), S South America, west of the continental divide of the Andes Mts. and the Nestle boycott boycott, concerted economic or social ostracism of an individual, group, or nation to express disapproval or coerce change. The practice was named (1880) after Capt. (where activists boycotted the marketing of infant formula Infant formula is an artificial substitute for human breast milk. Formulas are designed for infant consumption, and are usually based on either cow milk or soy milk. Use of infant formula has been decreasing in industrial countries for over forty years as a result of antenatal ) in the 1970's, activists, executives, and policymakers began to develop codes as a tool to govern global economic interdependence Economic interdependence is a consequence of specialization, or the division of labor, and is almost universal. It was described at least by 1828, when A. A. Cournot wrote, "but in reality the economic system is a whole of which the parts are connected and react on each other. . The International Chamber of Commerce noted that as of May 2000 there were more than forty codes, existing or in preparation, designed to govern the activities of global corporations. As Chart 1 illustrates, some of these codes are sector specific; other codes were designed to apply to all companies operating across borders. The codes also differ as to authorship; some were developed by civil society activists; others by executives acting on their own initiative; and still others were devised by executives working in tandem Adv. 1. in tandem - one behind the other; "ride tandem on a bicycle built for two"; "riding horses down the path in tandem" tandem with activists. With the prominent exception of the Global Reporting Initiative (which is a system of disclosure on environmental, social and economic aspects of corporate performance) and the SA 8000, which sets verifiable standards for certifying corporate performance in human and labor rights Labor rights or workers' rights are a group of legal rights and claimed human rights having to do with labor relations between workers and their employers, usually obtained under labor and employment law. , most of these codes lack mechanisms for monitoring and accountability The traceability of actions performed on a system to a specific system entity (user, process, device). For example, the use of unique user identification and authentication supports accountability; the use of shared user IDs and passwords destroys accountability. . Thus, many social and environmental activists will continue to insist on enforceable en·force tr.v. en·forced, en·forc·ing, en·forc·es 1. To compel observance of or obedience to: enforce a law. 2. international agreements to govern the global commons Global commons is that which no one person or state may own or control and which is central to life. A Global Common contains an infinite potential with regard to the understanding and advancement of the biology and society of all life. e.g. and work conditions.
CHART 1 A Content Comparison of Various Initiatives, Codes of
Conduct, and Corporate Accountability
Name of Code Global Compact Global Sullivan
Agreement Principles
Code United Nations Rev. Leon Sullivan,
Proponents major multinationals
Focus of Code Voluntary Aspirational
(Whom is it UN-sponsored global code for
addressing?) platform for companies of
encouraging and all sizes,
promoting good
corporate practices.
CONTENT:
- Freedom of Respects right Respects voluntary
Association to associate right to
associate
- Right to Respects right Not addressed
Bargain to bargain
Collectively collectively
- Sustainable Not addressed Meets basic
Living needs and
Wage increases skills
- Human Rights ILO, UN Human Supports
Rights Declara- Universal Human
tions Rights
Conventions
- Discrimination Non- Equal opportunity
discrimination
- Health Safe & Safe & healthy
& Safety healthy workplace
in the workplace
Workplace
- Vendor Not addressed Promotes
Standards principles to all
partners
- Child Labor Promotes No exploitation
abolition of of children
child labor;
none under 15
- Environment Greater Promote
environmental sustainable
responsibility development
and clean technology
- Corporate Not addressed Companies
Governance/ will respect
Ethics and obey
local laws; promote
fair competition,
ACCOUNTABILITY
Transparency: Not addressed Expected
Reporting
to -
Shareholders
Transparency: Yes. Must issue Expected
Reporting statement of
to - General support for GC.
Public
Transparency: Yes. Expected to Annual report to
Reporting post examples Rev. Sullivan
to - Code of improvements
Proponents made, engage
in partnership
with UN agencies,
Internal None N/A
Monitoring
System by
Corporation
External None N/A
Monitoring
By Auditors
Monitoring None None
by Code
Proponents
Name of Code OECD Guidelines for ILO Tripartite
Multinational Declaration of
Enterprises Principles Concerning
Multinational
Enterprises and
Social Policy
Code OECD International Labor
Proponents Organization (ILO)
Focus of Code Recommendations Seeks the promotion
(Whom is it designed of social justice
addressing?) to establish and/ and internationally
or clarify recognized human and
shared expectations labor rights.
for business
conduct and
sustainable
development.
CONTENT:
- Freedom of Respects the right to Free association
Association associate
- Right to Respects right Freedom to bargain
Bargain to bargain collectively
Collectively collectively
- Sustainable Not addressed Must provide
Living for basic needs
Wage
- Human Rights Respect for ILO Human Rights
Human Rights at Work,
UN Human rights
Declarations
- Discrimination Non-discrimination Non-discrimination
- Health Adherence to local law Safe and healthy
& Safety work place
in the
Workplace
- Vendor Encourage vendors' Not addressed
Standards adherence to Guidelines
- Child Labor Contribute to Advocates the
abolition of elimination of
child labor child labor
- Environment Promote sustainable Not addressed
development
and responsible
use of resources
- Corporate Supports anti-bribery/ Not addressed
Governance/ corruption
Ethics measures, free
competition and trade,
use of international
dispute mechanisms, must
obey local laws.
ACCOUNTABILITY
Transparency: Encouraged Individual companies
Reporting have no reporting
to - requirement.
Shareholders
Transparency: Reports should be made Yes. Country reports
Reporting available to the public. to ILO are publicly
to - General
Public
Transparency: No formal requirement Member countries
Reporting must submit an annual
to - Code report on measures
Proponents taken to satisfy
ratified Conventions
and Recommendations.
Internal Encouraged Encouraged
Monitoring
System by
Corporation
External None None
Monitoring
By Auditors
Monitoring None None
by Code
Proponents
Name of Code SA8000 Caux Principles
Code Social Accountability Caux Roundtable:
Proponents International (SAI) and Business Leaders-
advisory group of COs, Europe, Japan & USA.
NGOs and unions.
Focus of Code Establishes a uniform, Moral foundation for
(Whom is it auditable standard for business leaders,
addressing?) third party verification,
Modeled on ISO 9000
and ISO 14000.
CONTENT:
- Freedom of ILO standard Not addressed
Association
- Right to ILO standard Not addressed
Bargain
Collectively
- Sustainable Basic needs, supports fair,
Living discretionary income competitive
Wage wage.
- Human Rights Respects ILO, Promote HR in countries
UN Declarations of business
- Discrimination Non-discrimination Equal treatment
guaranteed
- Health Safe & healthy Health & dignity
& Safety work place respected
in the
Workplace
- Vendor Suppliers selected by Seeks suppliers who
Standards adherence to standard respect dignity
- Child Labor None under 15; Not addressed
provides school
support
- Environment Not addressed Business Should protect
/improve the
environment
- Corporate Not addressed Promotes spirit of
Governance/ trust, respect
Ethics for rules/
laws, free trade,
avoidance
of illicit
operations, social
justice,
ACCOUNTABILITY
Transparency: Yes Yes
Reporting
to -
Shareholders
Transparency: Yes No
Reporting
to - General
Public
Transparency: Reports tO SAI No established
Reporting mechanism
to - Code
Proponents
Internal Yes N/A
Monitoring
System by
Corporation
External Yes, by certified N/A
Monitoring auditors
By Auditors
Monitoring SAI accred organizations N/A
by Code which certify factories
Proponents
Name of Code "Benchmarks" Global Reporting
Global Principles Initiative (GRI)
Code Religious CERES, UNEP, group of
Proponents shareholders: experts, COs, NGOs &
ICCR, ECCR, TCCR(1) academics
Focus of Code Comprehensive Global guidelines
(Whom is it principles, criteria, for COs in issuing
addressing?) benchmarks to evaluate sustainability
company performance. reports; primarily
environmental.
CONTENT:
- Freedom of ILO Standard (GRI is not a
Association code, but set
of guidelines
for reporting
enviro'tal,
social and economic
sustainability)
- Right to ILO Standard N/A
Bargain
Collectively
- Sustainable Yes, and PPI studies N/A
Living
Wage
- Human Rights ILO, UN Human N/A
Rights Declarations
- Discrimination Non-discrimination N/A
- Health Regular H & S N/A
& Safety inspections
in the
Workplace
- Vendor Company responsible N/A
Standards for supplier conditions
& monitoring
- Child Labor Company, &/or N/A
suppliers must not
employ children
- Environment Implementation of Provide credible,
environmentally consistent
responsible policies information
on environmental
performance,
Est. common
metrics for
measuring env.
sustainability,
- Corporate Not directly addressed Not addressed
Governance/
Ethics
ACCOUNTABILITY
Transparency: Yes Yes
Reporting
to -
Shareholders
Transparency: Yes Yes
Reporting
to - General
Public
Transparency: Reports on company's Yes
Reporting compliance program
to - Code
Proponents
Internal Company compliance Encouraged
Monitoring process- training,
System by on-site inspections
Corporation
External Viewed as part of Encouraged
Monitoring company monitoring
By Auditors
Monitoring Principles used as Will establish
by Code accountability tools new institution
Proponents for GRI
Name of Code CERES Principles Worldwide Responsible
Apparel Manufacturing
(WRAP) Principles
Code Coalition for Environ- WRAP is an
Proponents mentally Responsible independent
Economies (CERES) non-profit
launched by the
American Apparel
Manufacturers
Association.
Focus of Code Establish an ethic and Minimum standards
(Whom is it criteria by for production
addressing?) which investors facilities
and others participating
can assess in the Worldwide
corporate Responsible
environmental Apparel Production
performance. Certification
Program.
CONTENT:
- Freedom of Not addressed Respects the right
Association to associate
- Right to Not addressed Not addressed
Bargain
Collectively
- Sustainable Not addressed Pays at least min.
Living wage required
Wage by law
- Human Rights Not addressed Not addressed
- Discrimination Not addressed Non-discrimination
- Health Not addressed Safe & healthy
& Safety work place
in the
Workplace
- Vendor N/A Not addressed
Standards
- Child Labor Not addressed None under 14
- Environment Commitment to Environmentally
sustainable use of conscious
resources, waste practices in all
reduction, energy locations where
conservation, product they operate.
safety. and public disclosure.
- Corporate Board of Directors and Must comply
Governance/ top management will be with local laws,
Ethics fully informed and customs regulations,
responsible for and will
environmental policy, cooperate with
local and international
drug enforcement
agencies.
ACCOUNTABILITY
Transparency: Yes Not addressed
Reporting
to -
Shareholders
Transparency: Yes: annual CERES Not addressed
Reporting report
to - General is public.
Public
Transparency: Endorsing companies will Reports to WRAP
Reporting complete an annual Certification
to - Code CERES reports. Board
Proponents
Internal Expected Factories perform
Monitoring self-assessment
System by
Corporation
External None By certified auditors
Monitoring
By Auditors
Monitoring None Certification
by Code Board certifies
Proponents factories for a
negotiated term
Name of Code Fair Labor Charter US Business
Agreement Principles
for Human Rights of
Workers in China
Code Fair Labor Association Global Exchange/
Proponents -- (FLA) government, Int'l Labor Rights
companies, NGOs and Fund, Levi Strauss,
universities Mattel, Reebok
Focus of Code Member COs and suppliers Promotes human
(Whom is it in the apparel rights &
addressing?) & footwear labor standards
industry in China.
monitored against
code.
CONTENT:
- Freedom of Respects the right to "Undertakes
Association associate to promote"
- Right to Respects right "Undertakes
Bargain to bargain to promote"
Collectively collectively
- Sustainable Pays legal Meets China's Wage
Living minimum wage guidelines,
Wage as a floor basic needs
- Human Rights Not directly Endorses
addressed ILO Conventions & UN
HR Covenants
- Discrimination Non-discrimination, no Nondiscrimination;
sexual harassment prohibits
sexual
harrassment
- Health Safe & healthy work Safe production
& Safety place methods
in the
Workplace
- Vendor Vendors must Not addressed
Standards also comply
- Child Labor None under 15, Prohibited
unless law under China's
allows 14 labor laws
- Environment Not addressed Environmentally
responsible
methods
of production
- Corporate Not addressed Transparency in labor
Governance/ conditions,
Ethics fair treatment
of workers
ACCOUNTABILITY
Transparency: Not addressed Not addressed
Reporting
to -
Shareholders
Transparency: Yes Not addressed
Reporting
to - General
Public
Transparency: Annual report to FLA. Annual Report
Reporting Periodic report to HR for
to - Code to FLA by Workers Working Group
Proponents company's monitors
Internal Members required to Internal monitoring
Monitoring monitor suppliers expected of
System by companies
Corporation
External Auditing firms N/A
Monitoring certified by
By Auditors FLA
Monitoring FLA certifies Evaluate
by Code monitors and company reports
Proponents companies. and provide feedback
Name of Code Code of Labor Practices Ethical Trade
Initiative Base Code
Code Clean Clothes Ethical Trade
Proponents Campaign, an Initiative (ETI),
international network an alliance
of trade unions, of companies,
consumer organizations non-governmental
and other organizations (NGOs),
groups and trade union
organizations
Focus of Code End labor abuses Fair labor practices
(Whom is it in the apparel
addressing?) industry; inform
consumers on
labor conditions.
CONTENT:
- Freedom of ILO standard Respects right of
Association free association
- Right to ILO standard Respects right
Bargain to bargain
Collectively collectively
- Sustainable wage Supports
Living living wage
Wage
- Human Rights ILO standard UN/ILO standards
- Discrimination ILO standard Non-discrimination
- Health ILO standard Safe and healthy
& Safety work place
in the
Workplace
- Vendor Vendors must comply Not addressed
Standards with standards
- Child Labor ILO standard ILO standard
- Environment Not addressed Not addressed
- Corporate Not addressed Not addressed
Governance/
Ethics
ACCOUNTABILITY
Transparency: Not addressed Not addressed
Reporting
to -
Shareholders
Transparency: Yes. Informing Must publicly endorse
Reporting consumers is key the code and provide
to - General public information in
Public annual report
Transparency: Yes Not addressed
Reporting
to - Code
Proponents
Internal Expected Internal monitoring
Monitoring expected
System by of companies
Corporation
External Yes. Through a "forum" Yes. Annually.
Monitoring made up of members,
By Auditors NGOs, and trade unions.
Monitoring Yes. Also via Not addressed
by Code the "forum".
Proponents
Name of Code ICTI Code of Business Keidanren Charter
Practices for Good
Corporate Behavior
Code International Council of Keidanren (Japan
Proponents Toy Industries (ICTI) Federation
of Economic
Organizations
Focus of Code Fair labor practices Improved Corporate
(Whom is it in the citizenship
addressing?) toy industry
CONTENT:
- Freedom of Respects right of free Not addressed
Association association
- Right to Not addressed Not addressed
Bargain
Collectively
- Sustainable Must be humane, comply High wages should
Living with local law be a corporate
Wage goal
- Human Rights Not addressed Respect for
employee and human
dignity
- Discrimination Non-discrimination Not addressed
- Health Safe and healthy work Safe and healthy
& Safety place work place
in the
Workplace
- Vendor Contractors must comply Not addressed
Standards with standards
- Child Labor Comply with local law; Not addressed
otherwise none under 14
- Environment Not addressed Maintain
environmental safety
- Corporate Not addressed Transparency,
Governance/ communication,
Ethics healthy
and sound
relations
with government,
respect for
local law when
operating abroad.
ACCOUNTABILITY
Transparency: Not addressed Yes
Reporting
to -
Shareholders
Transparency: Yes. Must publish Yes
Reporting annual
to - General report
Public
Transparency: Not specified Not required
Reporting
to - Code
Proponents
Internal Expected. Member Top management
Monitoring companies must also is expected
System by monitor their to ensure that
Corporation contractors, principles are
met.
External None None
Monitoring
By Auditors
Monitoring Not specified None
by Code
Proponents
Name of Code ICC Charter Responsible Care[R]
for Sustainable
Development
Code International Chamber of American Chemistry
Proponents Commerce Council
(ACC)
Focus of Code Provide global basis for Improve the
(Whom is it sounds environmental management of
addressing?) management. chemicals worldwide
including
production,
distribution,
pollution
control, and
disposal.
CONTENT:
- Freedom of Not addressed Not addressed
Association
- Right to Not addressed Not addressed
Bargain
Collectively
- Sustainable Not addressed Not addressed
Living
Wage
- Human Rights Not addressed Not addressed
- Discrimination Net addressed Not addressed
- Health Not addressed Safe and
& Safety healthy workplace
in the
Workplace
- Vendor Encourage adoption Work with
Standards of principles contractors to
among suppliers improve safety,
reduce environmental
impact
- Child Labor Not addressed Not addressed
- Environment Companies must recognize Continually improve
environmental management health, safety,
as a key concern; and environmental
Promote performance;
energy efficiency listen to public
and sustainable concern about
use of environmental
resources in all and safety
company functions; concerns; assist
promote cleaner other members
technologies, in achieving
optimum environmental
performance.
- Corporate Not addressed Not addressed
Governance/
Ethics
ACCOUNTABILITY
Transparency: Yes Yes
Reporting
to -
Shareholders
Transparency: Yes Yes
Reporting
to - General
Public
Transparency: No Yes. Annual report
Reporting to ACC. Note:
to - Code adherence to
Proponents Responsible Care is
a membership
obligation of ACC.
Internal Yes. Internal Yes
Monitoring periodic audits
System by
Corporation
External No No
Monitoring
By Auditors
Monitoring No No
by Code
Proponents
Name of Code Electronic Privacy
Principles
Code Computer
Proponents Professionals for
Social Responsibility
Focus of Code Guidelines to guarantee proper
(Whom is it respect for the privacy and
addressing?) dignity of employees,
customers, and
citizens.
CONTENT:
- Freedom of Responsibilities
Association of employers:
- must inform employees of
company policy regarding
privacy.
- Right to Resp. of service providers:
Bargain - notify users of personal data
Collectively collection
- Sustainable Resp. of mailing list and database
Living operators:
Wage - Only necessary info may be
- Human Rights collected
- Discrimination - User must be notified
- Health Resp. of software developers:
& Safety - Network software should
in the protect privacy
Workplace Individuals:
- Vendor - Must take measures to protect
Standards their privacy
- Child Labor Governments:
- No restriction on encryption
- Must not hinder privacy pro-
tection via law enforcement
- Environment Not addressed
- Corporate Transparency in company and
Governance/ service provider privacy policies.
Ethics
ACCOUNTABILITY
Transparency: There are no reporting
Reporting requirements.
to -
Shareholders
Transparency:
Reporting
to - General
Public
Transparency:
Reporting
to - Code
Proponents
Internal None
Monitoring
System by
Corporation
External None
Monitoring
By Auditors
Monitoring None
by Code
Proponents
(1) ICCR - The Interfaith on Corporate Responsibility
(USA); ECCR - Ecumenical Council for Corporate Responsibility
(UK); TCCR - Taskforce on the Churches and Corporate
Responsibility (Canada)
Source: Global Accountability Program, ICCR, January 2000.
Expanded by Honeywell November 2000.
Many governments have tried to find a middle way, between directly regulating reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. their multinationals and promoting voluntary adherence adherence /ad·her·ence/ (ad-her´ens) the act or condition of sticking to something. immune adherence to codes of conduct. Some have designed their own codes; others have combined voluntary and governmental initiatives. For example, on December December: see month. 21, 2000, the U.S. State A U.S. state is any one of the fifty subnational entities of the United States, although four states use the official title "commonwealth". The separate state governments and the federal government share sovereignty, in that an American is a citizen both of the federal entity and Department and British Foreign Office in tandem with multinationals, unions, and human rights organizations announced yet another code, designed to prevent human rights abuses by governments in developing nations where these companies operate. Still others have tried to foster multinational multinational Of, relating to, or being a company with subsidiaries or other operations in a number of countries. The diversity of operations of such companies subjects them to unique risks (for example, exchange rate changes or government nationalization) cooperation. The Danish government established an international institution, the Copenhagen Copenhagen (kō`pənhā'gən, –hä'gən), Dan. København (kö'bənhoun`), city (1992 pop. 464,566; metropolitan area 1,339,395), capital of Denmark and of Copenhagen co. Center, to promote corporate social responsibility partnerships. As Chart 2 shows, international organizations have taken the lead in promoting a middle way. In 1977, the International Labor Organization International Labor Organization (ILO), specialized agency of the United Nations, with headquarters in Geneva. It was created in 1919 by the Versailles Treaty and affiliated with the League of Nations until 1945, when it voted to sever ties with the League. adopted a code of conduct for multinational enterprises, the Tripartite TRIPARTITE. Consisting of three parts, as a deed tripartite, between A of the first part, B of the second part, and C of the third part. Declaration. This voluntary code addresses social justice, human and labor rights, but it does not address the environment, corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. or ethics ethics, in philosophy, the study and evaluation of human conduct in the light of moral principles. Moral principles may be viewed either as the standard of conduct that individuals have constructed for themselves or as the body of obligations and duties that a issues. Consequently, many groups active in social reform believe its scope is too limited to serve as a universal code of conduct.
CHART 2 Voluntary Global Codes that Involve Government at the
National and/or International Level
Name UN Global Compact (est. 1999)
Scope Based on long accepted principles of
international law that were signed by UN, ILO
member nations. Covers labor rights, human
rights, and the environment. The UN is
the largest and most comprehensive international
organization, and has a history of
trying to promote both foreign investment
and responsible corporate citizenship.
Who Signs Corporations
Who Corporations, but can partner with other
Implements groups with reporting or monitoring
expertise.
Description of No formal role, UN tries to encourage.
Government's
Role
Mode of Ac- No formal mode of accountability, but can
countability be linked to SA 8000. However, at any
point, people can go public alleging a viola-
tion. Each year, corporations must report in
writing to the UN on how they put one or
several of the principles into action.
Corporate View Mixed. Sponsors include individual
corporations and organizations such as
Business for Social Responsibility, Confer-
ence Board, International Chamber of
Commerce, World Business Council on
Sustainable Development.
Who dissemi- Corporations play the key role here.
nates to employ-
ees of corpora-
tion or citizens
NCO Supported by Amnesty Intl; WRI; World-
supporters Wide Fund for Nature; Human Rights
Watch.
NCO view Less enthusiastic as no modes of account-
ability.
Name ILO Guidelines on Multinational
Enterprises and Social Policy (est. 1977)
Scope These Guidelines address labor rights,
employment, and training. They are based
on ILO Covenants, which are widely ac-
cepted and have the force of international
law. The Guidelines however, are recom-
mendations.
Who Signs Governments sign. Governments promote
to their corporations, as does ILO. ILO
provides technical assistance, surveys
governments regarding how firms imple-
ment these guidelines.
Who Corporations in tandem with workers.
Implements
Description of At national level, government tries to en-
Government's courage. However, although the Declara-
Role tion is not legally enforceable, there are
established procedures for interpretation
of its provisions in cases of disputes aris-
ing over its application. The ILO thus, may
play a mediative role.
Mode of Ac- Governments and in certain circum-
countability stances employers or workers' organiza-
tions may ask ILO for an interpretation of
the provisions of the Declaration in the
event of disputes over their operation.
Corporate View ?
Who dissemi- ?
nates to employ-
ees of corpora-
tion or citizens
NCO Supported by NGOs and unions.
supporters
NCO view ?
Name OECD Guidelines (est.1976)
Scope The most comprehensive--covers human
rights, labor standards, environment, corrup-
tion; and information disclosure. In its most
recent revision, corporations were asked to try
to hold their suppliers and subcontractors
accountable.
Who Signs Governmental agreement--currently 33
nations, including 4 non-OECD members:
Slovakia, Argentina, Brazil, and Chile.
Who Governments are responsible for disseminating
Implements to all national businesses. Businesses
implement, but as with UN Compact
and Global Sullivan, no
legal sanctions for violations are attached.
Description of Government disseminates material, and encour-
Government's ages compliance. No monitoring role. However,
Role if a violation is alleged, a national contact
point has authority to investigate
and if a violation is found, national
contact point tries to mediate a
settlement between the parties. Thus,
government also plays a Mediative ROLE.
Mode of Ac- No formal mode of accountability. However, if
countability national contact point can not mediate a solu-
tion, claimant can go public alleging
violation of guidelines.
Corporate View Mixed, although corporations played a role in
negotiating Guidelines. Many corporations think
it will be difficult for business to take
responsibility for the practices
of their suppliers and subcontractors,
given the comprehensive nature
of the Guidelines.
Who dissemi- Governments have responsibility to disseminate
nates to employ- to all of its corporations; corporations have
ees of corpora- responsibility to implement.
tion or citizens
NCO Negotiations involved NGOs such as Amnesty
supporters International, Oxfam, and Friends of the Earth.
Many were also impressed that the OECD
posted negotiating drafts on the web.
NCO view Since latest revision, proof of utility
lies in implementation by governments
at the national level.
Susan Ariel Aaronson. Senior Fellow, NPA
The United Nations has also tried to play a constructive (mathematics) constructive - A proof that something exists is "constructive" if it provides a method for actually constructing it. Cantor's proof that the real numbers are uncountable can be thought of as a *non-constructive* proof that irrational numbers exist. role in encouraging global corporate citizenship. In January January: see month. 1999, United Nations Secretary General Kofi Annan Kofi Atta Annan (born April 8, 1938) is a Ghanaian diplomat who served as the seventh Secretary-General of the United Nations from January 1 1997 to January 1 2007, serving two five-year terms. He was the co-recipient of the Nobel Peace Prize in 2001. challenged business leaders to enact the Global Compact--nine core principles on labor standards, human rights, and environmental protection. Many prominent companies responded, including Procter
American automobile manufacturer who founded the Chrysler Corporation (1925). . But the Compact has no mechanisms for accountability. Companies are simply asked to demonstrate their adherence by taking corporate action and to publicize pub·li·cize tr.v. pub·li·cized, pub·li·ciz·ing, pub·li·ciz·es To give publicity to. publicize or -cise Verb [-cizing, -cized] this action through reports posted on the UN Website and in their annual reports. Governments at the national level play no role in promoting the Compact. Ironically i·ron·ic also i·ron·i·cal adj. 1. Characterized by or constituting irony. 2. Given to the use of irony. See Synonyms at sarcastic. 3. , because of this lack of accountability, many social activists, as well as corporate officials denounce de·nounce tr.v. de·nounced, de·nounc·ing, de·nounc·es 1. To condemn openly as being evil or reprehensible. See Synonyms at criticize. 2. To accuse formally. 3. the Global Compact as "pretty words." In 1976, the OECD--long considered a club and a think-tank think-tank Noun Informal a group of experts employed to study specific problems think-tank think n → Expertengremium nt for the industrialized in·dus·tri·al·ize v. in·dus·tri·al·ized, in·dus·tri·al·iz·ing, in·dus·tri·al·iz·es v.tr. 1. To develop industry in (a country or society, for example). 2. nations of the world--developed the OECD Guidelines for Multinational Enterprises OECD Guidelines for Multinational Enterprises are annex to the OECD Declaration on International Investment and Multinational Enterprises. They are recommendations providing voluntary principles and standards for responsible business conduct for multinational corporations operating , which address the environment, labor standards, human rights, corruption corruption Improper and usually unlawful conduct intended to secure a benefit for oneself or another. Its forms include bribery, extortion, and the misuse of inside information. It exists where there is community indifference or a lack of enforcement policies. , and competition policy. They are the only global strategy built on the recognition that foreign investment is a crucial tool for economic development in many countries. The Guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. have been revised several times since the 1970's. In the most recent revision (programming) revision - A release of a piece of software which is not a major release or a bugfix, but only introduces small changes or new features. , the OECD OECD: see Organization for Economic Cooperation and Development. invited social activists to work with labor and business groups, as well as policymakers in the redrafting. In this way, the OECD hoped to build a broad constituency A constituency is any cohesive corporate unit or body bound by shared structures, goals or loyalty. It can be used to describe a business's customer base and shareholders, or a charity's donors or those it serves. for the Guidelines. But while activist groups insist that the Guidelines must change corporate behavior, business groups insist that the Guidelines are voluntary. However, in contrast with every other code, the Guidelines set up a governmental process to encourage positive business behavior. The thirty-three signatory sig·na·to·ry adj. Bound by signed agreement: the signatory parties to a contract. n. pl. sig·na·to·ries One that has signed a treaty or other document. governments, which include the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. , and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). as well as non-OECD members Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. , Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. ,
and Chile, have promised to put in place a governmental mechanism,
called a National Contact Point, to investigate allegations of
violations of the Guidelines. If the National Contact Point finds a
complaint to be legitimate, it would then offer its good offices to try
to resolve the issue. However, if the issue could not be mediated me·di·ate v. me·di·at·ed, me·di·at·ing, me·di·ates v.tr. 1. To resolve or settle (differences) by working with all the conflicting parties: , the National Contact Point will make a public statement about the complaint. The negative publicity that such a statement might bring could press a corporation into changing its behavior. Business groups are divided about the potential of these codes, whether they involve government or not. Some worry that by agreeing to adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. such codes, business could be held liable liable adj. responsible or obligated. Thus, a person or entity may be liable for damages due to negligence, liable to pay a debt, liable to perform an act for which he/she/it contracted to do, or liable to punishment for commission of a crime. in domestic courts. Executives also worry that under the OECD Guidelines, they will be held responsible for the actions of their suppliers or subcontractors. There is no one code that can fit all sectors, all corporations, or all the issues that make globalization controversial. Yet the diversity of codes and their voluntary nature send misleading and confusing con·fuse v. con·fused, con·fus·ing, con·fus·es v.tr. 1. a. To cause to be unable to think with clarity or act with intelligence or understanding; throw off. b. signals to market actors. Governments can help provide guidance to corporate officials on how to respond to the plethora plethora /pleth·o·ra/ (pleth´ah-rah) 1. an excess of blood. 2. by extension, a red florid complexion.pletho´ric pleth·o·ra n. 1. of codes on the environment, labor standards, etc. In this way, governments may help promote a rationalization rationalization, in psychology: see defense mechanism. among the codes, many of which are redundant Repetitive. See redundancy. . Moreover, by promoting business adherence to such codes, governments can help ensure that responsible corporate actors are not disadvantaged This article or section may contain original research or unverified claims. Please help Wikipedia by adding references. See the for details. This article has been tagged since September 2007. in global markets. To encourage adherence to codes, governments might provide incentives and, when necessary, disincentives. For example, the U.S. and British government both give widely publicized pub·li·cize tr.v. pub·li·cized, pub·li·ciz·ing, pub·li·ciz·es To give publicity to. Adj. 1. publicized - made known; especially made widely known publicised awards for responsible global business. Many policymakers recognize that they may also need to use disincentives to encourage compliance with voluntary codes. Some countries have proposed that the OECD Guidelines should be linked to government procurement Government procurement, also called public tendering, is the procurement of goods and services on behalf of a public authority, such as a government agency. With 10 to 15% of GDP in developed countries, and up to 20% in developing countries, government procurement accounts . Only those companies that adhere to such voluntary Guidelines can bid on governmental contracts. This kind of action would be a strong incentive to adherence, should it be approved. But some executives are concerned that this strategy would compromise the voluntary nature of the Guidelines. Nevertheless, a growing number of governments, such as Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Denmark Denmark (dĕn`märk), Dan. Danmark, officially Kingdom of Denmark, kingdom (2005 est. pop. 5,432,000), 16,629 sq mi (43,069 sq km), N Europe. , Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. , and Great Britain are developing tools that combine voluntary adherence to codes with government incentives and disincentives for compliance. Governments, however, can only go so far short of regulation. Ultimately, it is corporate behavior that will decide whether globalization can be managed through self-policing Self-policing, a form of Self-Regulation, is the process whereby an organization is asked, or volunteers, to monitor its own adherence to legal, ethical, or safety standards, rather than have an outside, independent agency such as a governmental entity monitor and enforce those or the heavy hand of government. Susan SUSAN Smallest Univalue Segment Assimilating Nucleus SUSAN Sub Saharan African Network SUSAN Smart Ultrasonic System for Aircraft NDE Ariel Ariel, in astronomy Ariel (âr`ēəl), in astronomy, one of the moons, or natural satellites, of Uranus. Ariel, in the Bible Ariel (ā`rēĕl) Aaronson is Senior Fellow at the National Policy Association and the author of Taking Trade to the Streets: The Lost History of Public Efforts to Shape Globalization (University of Michigan (body, education) University of Michigan - A large cosmopolitan university in the Midwest USA. Over 50000 students are enrolled at the University of Michigan's three campuses. The students come from 50 states and over 100 foreign countries. Press, 2001). NPA (1) (Numbering Plan Area) The Bellcore/Telcordia telephone area code system in use in the U.S., Canada, Alaska, Hawaii and islands in the Caribbean. See NPA code. (2) (Network Professional Association, San Diego, CA, www.npanet. has grants from the Ford and Boeckler foundations to examine how governments can encourage global corporate citizenship. See www.multinationalguidelines.org/OECD. |
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