Commerce with Conscience: Human Rights and Corporate Codes of Conduct

Article excerpt

Commerce with Conscience: Human Rights and Corporate Codes of Conduct

Craig Forcese. Montreal, QC: International Centre for Human Rights and Democratic Development, 1997, 80 pp.

This book is about corporate codes of conduct in relation to human rights and sustainable development. The first part describes the general situation. The second part presents the results of a survey conducted in the 100 largest Canadian firms with operations in foreign countries. The survey reveals the corporate contribution to the protection of human rights to be less than exemplary.

Forecese reports estimates that nearly 80% of major American enterprises and 60% of Canadian ones have codes of conduct. However, an examination of the content of these codes mostly reveals statements whose aim is to protect firms against possible embezzlement by employees. When they do mention ethical aspects, the object is to avoid acts liable to legal sanction. Moreover the study shows that a majority of the enterprises have no code of conduct concerning fundamental human rights and are reluctant to discuss this aspect of their relations toward their workers in foreign countries. Indeed, only one in five enterprises studied had adopted a code of conduct with respect to its international activities.

Forcese concludes that "corporate social responsibility ranks low on the list of code priorities" (p. 14). Forcese's statement is based on a broad definition of corporate social responsibility. According to this approach, the firm's reponsibility is toward all its stakeholders, that is, all the groups that can have an effect or be affected by the firm's activities. The previous definition of the goal of corporate social responsibility was to humanise capitalism by trying to limit injustices that can be associated with it. According to Forcese's analysis, current corporate code of conduct practices do not constitute an instrument for the humanisation of capitalism. At best, they can contribute to the implementation of laws. The efficacy of the codes depends on the existence of outside mechanisms to ensure their implementation.

The neo-liberal definition of corporate social responsibility, on the other hand, limits corporate responsibilitites to shareholders and the law. One could argue, based on this definition, that current practices adequately correspond with corporate social responsibilities. However, corporations operating in countries where the laws are insufficient or applied inadequately without codes of human rights and sustainable development are exposing themselves and their shareholders to political risk. Forcese quotes many cases of multinational enterprises subjected to deep criticism and boycotts following the abuse of human rights in their factories abroad or in those of their suppliers. In response to these pressures, several of these companies have adopted a code of conduct pertaining to human rights for their international activities.

In 1992, for example, Levi Strauss was the object of embarrassing revelations in the Washington Post about the conditions to which female workers were subjected in Levi Strauss's subcontractors' factories. Consequently, the firm decided to adopt norms respecting the environment, ethics, health and security, and work that applied to both subcontractors and suppliers. The company also adopted an internal surveillance mechanism for the application of its code. It included a questionnaire, unannounced inspections, and the possibility of contract cancellations in the case of a code violation.

Nike also introduced a code of conduct in 1992, following complaints about the exploitative conditions of its workers in factories abroad. Similarly, Home Depot, Timberland, Wal-Mart, and JC Penney have codes of conduct applicable to their retailers. Sears Roebuck also adopted for a code of conduct in 1992 in order to avoid purchasing products made by Chinese prisoners.

The Reebok company, a long time supporter of Amnesty International, initially introduced a code of conduct for its operations in China, and eventually applied it to the rest of its operations. …