Corporate Social Responsibility in the Multinational Enterprise

By Wagner, Constance Z. | The George Washington International Law Review, January 1, 2001 | Go to article overview
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Corporate Social Responsibility in the Multinational Enterprise

Wagner, Constance Z., The George Washington International Law Review

Levi's Children: Coming to Terms with Human Rights in the Global Marketplace. Karl Schoenberger. Atlantic Monthly Press, 2000.

Levi's Children: Coming to Terms with Human Rights in the Global Marketplace, written by veteran foreign correspondent and business journalist Karl Schoenberger, considers the dark side of globalization. The book depicts the struggle by Levi Strauss & Co. to abide by the principles it established regarding workers' rights in the international arena after its decision to relocate some manufacturing operations overseas. Despite good faith efforts, Levi's has been largely unsuccessful, forcing it to back away from a core corporate value in these overseas operations.

Levi Strauss has traditionally been a front-runner in the corporate responsibility movement in the United States. Its inability to maintain the same high ethical standards abroad as at home dramatically highlights the moral dilemma faced by many multinational corporations. Levi's Children examines whether a corporation such as Levi Strauss can behave in a socially responsible manner and still survive in the marketplace.1

The author reaches several disheartening conclusions, one being that corporate profits are more important than human rights in today's business environment.2 Schoenberger also concludes that even companies who care about human rights in theory are doomed to failure when they attempt to transcribe those principles to everyday business practices and decisions.3

The book utilizes the experiences of corporations in the apparel industry to illustrate how many U.S. companies turn to cheaper foreign labor in lieu of domestic manufacturing facilities in order to protect the bottom line and remain competitive. Often, this foreign labor pool is comprised of children from poverty-stricken homes working under sweatshop conditions.4 Such practices would be deemed illegal, as well as morally reprehensible, in the United States. Why then are such practices acceptable in the global marketplace for labor?

One explanation is that the municipal law of the countries hawking such labor does not adequately protect the rights of their own workers. These countries are primarily interested in establishing a legal regime that will be attractive to new business and investment from abroad. Indeed, the governments of the countries involved in human rights abuses are engaged in a race to the bottom, fearing that new foreign investment will be discouraged if they attempt to curb those abuses. In some cases, critics of such governments suffer human rights abuses themselves in retaliation for their efforts.5 Moreover, international law has not yet developed an approach which enables it to fill the gap left by the failure of these national governments to protect human rights. Thus far, the moral pressure exerted by nongovernmental organizations (NGOs), the governments of more developed countries, and international organizations is not yet strong enough to curb abusive practices, allowing them to continue unhindered.

Given the legal and moral gaps, several questions arise. Should U.S. multinationals respect workers' labor and human rights to the same extent abroad as at home? Do multinationals owe some measure of moral responsibility towards foreign workers whose rights are being violated? The author clearly believes the answer to these questions is yes. As the title of the book suggests, these workers are "Levi's new children," who expect to receive the benefits of the company's "famed paternalism," in the same manner as their domestic counterparts.6

One solution to the plight of foreign workers would be for multinationals to regulate themselves, taking action to protect such workers or to boycott contractors in countries where human rights violations occur. An ethicist might argue that multinationals should adopt some sort of self-regulatory measures, but the reality remains that they will rarely do so.

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