CSR / the Global Compact Under Fire

♠ Posted by Emmanuel in at 10/28/2007 04:29:00 PM
It seems activists of various stripes are becoming more skeptical of the whole idea of corporate social responsibility (CSR) again. Accusations that CSR is just a PR gimmick and "greenwashing" on environmental matters are resurfacing--see Robert Reich, for example. I've already related the controversy over Berkshire Hathaway / PetroChina. Now, the Economist notes a couple of things. First, various NGOs have expressed dissatisfaction over how John Ruggie--he of "embedded liberalism" fame--has handled the revision of the UN Global Compact concerning CSR matters. Second, many NGOs seem to be retreating from a stance of being willing to work with companies on these matters to a more confrontational stance:
The role that business plays in promoting—or abusing—human rights has never been under such scrutiny. As well as Darfur, the uprising in Myanmar has revived criticism of foreign multinationals operating there, such as oil giants Chevron and Total. Meanwhile, more than 3,500 companies have signed up to the United Nations Global Compact, which includes a commitment to uphold the UN Declaration on Human Rights.

With the wind in their sails, it seems an odd moment for human-rights activists to fall out about business. Yet that is what has happened. The focus of the dispute is the work of John Ruggie, the UN secretary-general's special representative on human rights and transnational corporations. The Global Compact is thin on detail, and Mr Ruggie has been asked to write something stronger for the 60th anniversary of the UN Declaration next year. Earlier this month, 151 non-governmental organisations (NGOs) and other activists, including Amnesty International and Human Rights Watch, sent an open letter to Mr Ruggie, which his supporters see as an attack on their man and his strategy.

The letter, if listened to, “threatens to set back the cause of human rights in the corporate sector many years”, thundered Sir Geoffrey Chandler—who until recently ran Amnesty's Business Group in Britain and formerly worked for Shell, an oil firm—in a letter of his own. Sir Geoffrey says that some of the 151 signatories want to pursue a confrontational approach to business, rather than engage with companies. That is a shame, he says, since it is “abundantly clear that if we wish to see human rights prevail in the world, we will not do so without the positive involvement of companies.”

Some NGOs do want to work with business. Global Witness, for instance, which is not among the 151, has seconded a member of its staff to work with Mr Ruggie on drawing up guidelines for how companies should behave in conflict zones. Widney Brown, senior director of international law, policy and campaigns at Amnesty International, says that the differences are exaggerated. Amnesty believes both in naming and shaming and in dialogue, she says, and it simply wants legislation that is binding on companies in addition to Mr Ruggie's voluntary guidelines.

In mid-October however, Amnesty's British business group voted to dissolve itself, which insiders see as a sign that the NGO is hardening its line. Its business group previously helped Shell and BP draw up internal guidelines on human rights in the mid-1990s. Shell had been vilified for standing by as the Nigerian government executed an activist who protested against the oil firm, and BP had attracted criticism because the government-employed Colombian paramilitaries who guarded its pipeline also terrorised local people. Exposing companies rather than engaging with them, Chris Marsden, the business group's chairman, wrote in an internal memo, “may be seen by traditionalists as the right thing for Amnesty to do but it does go against all the lessons learnt through the work of the UK and other business groups.”

Public confrontation may be easier for an NGO to sell to its supporters than the moral ambiguities of engaging with the corporate world. But the risk is that a public squabble among NGOs could prompt the UN to put Mr Ruggie's work on the back-burner. If that happens, companies may in the end come under less pressure to respect human rights.