Corporate social responsibility, globalization, the multinational corporation, and labor: an unlikely alliance.

AuthorHarrington, Alexandra R.
PositionProtecting Workers' Rights in a Post-Wisconsin World: Strategies for Organizing and Action in an Era of Diminished Resources and Embattled Unions
  1. INTRODUCTION

    Corporate social responsibility is often viewed as an industry or corporation-based concept with some base in law, but it is largely concerned with preserving the public face of the corporation. (1) However, in recent years, the focus of corporate social responsibility has shifted to new areas ranging from environmental protection to sustainable development and labor concerns. (2) At the same time, the world has witnessed the rise of globalization and the multinational corporation, (3) an entity that has been represented as everything from a source of economic growth in underdeveloped areas (4) to the perpetual nemesis in print and movie stories. (5)

    Those concerned by the typical mantra of globalization and the rise of the multinational corporation worry that taken together they represent the potential downfall of labor rights, especially given the constant threat of labor outsourcing to countries that are more amenable to business interests and, by insinuation, less amenable to fair labor practices. (6) In this view, corporate social responsibility is something that the multinational corporation must embrace in order to avoid public wrath and questions as to its business practices but is not something that provides a meaningful vehicle for development in any affected policy area. This is not, however, the only way to view the relationship corporate social responsibility and globalization as embodied by the multinational corporation.

    With that in mind, this article discusses the intersection between globalization, the more legally robust corporate social responsibility regimes that are being developed in relation to multinational corporate actions and actors, and the future of labor regulation. (7) While it is easy to gloss over this intersection through pessimism based on prior corporate bad acts, there is a need to look beyond this understanding of the intersection. Accordingly, this article argues that through robust corporate social responsibility practices and international organization regulations, globalization and the rise of the multinational corporation can serve as a source of improved labor rights within both developed and developing countries. (8)

    Part II of this article examines the link between globalization, the multinational corporation and labor issues, both in terms of exacerbating the problem of exploitative labor practices and in terms of bringing domestic and international attention to these practices. Part III examines corporate social responsibility both as a soft law construct and within the realm of international legal agreements and regimes. This Part demonstrates that corporate social responsibility is a flexible concept in law and that this flexibility can indeed create a positive link with the quickly evolving pace of globalization and the practices of multinational corporations.

    Part IV brings the lessons of the previous Parts together to discuss the meaning of the relationship between corporate social responsibility, globalization, multinational corporations, and labor rights. Cynically, of course, the meaning of this relationship could be seen as quite thin, since corporations increasingly need to present a "clean" image to their consumers and labor rights represent an easy way to do this. (9) This Part argues that moving beyond this inherent cynicism reveals far more important lessons. Essentially, multinational corporations need to make a profit and also need to be responsible actors in the communities in which they operate, including the communities in which their subsidiaries and affiliates operate. This often requires that the corporation use labor standards that are more generous or protective than those required by the domestic laws of the host state in which they operate. Although this requirement does not change the content of the domestic laws, it does provide for labor interests, ranging from unions and individual workers, with additional benefits and also with a more robust ability to petition for changes to the domestic laws based on the feasibility of implementing these higher standards. This in turn fulfills at least part of the applicable labor interests. Working together in this way also fulfills the interests of labor in ensuring that there are jobs for those within their constituencies. (10) Thus, it is argued that these areas form discrete spaces within which an alliance can be made in order to further the purpose of corporate social responsibility, the goals of globalization and the multinational corporation, and the needs of labor.

    Finally, Part V concludes with a summary of the information and arguments that were presented in the article, and again stresses the positive ways in which multinational corporations, corporate social responsibility, and labor can interact to promote an agenda that is beneficial to all involved.

  2. GLOBALIZATION AND LABOR ISSUES

    Globalization is a wide-ranging phenomenon that is at once a commonly understood concept and yet elusive in definition. (11) Globalization is a driver of product availability and consumer choice the world over. (12) Through the process of opening markets and the lowering of barriers on access to products and services from abroad, the concept of globalization has enabled corporate entities, ranging from large multinational corporations to small and medium enterprises, (13) to gain new market share and access to a new workforce. (14)

    Globalization is also recognized as bringing benefits and burdens. (15) This is especially true in the context of corporate activities and labor issues, as the expansion of global markets and corporate activities creates the opportunity for jobs in developing markets and also creates the opportunity for exploitation of workers in developing states with weaker legal regimes to protect them. (16) Indeed, it is possible to view globalization as a negative means for corporations to maximize profit while minimizing costs incurred in foreign worker wages, benefits, and working conditions.

    The problem of exploitative labor practices is particularly prominent in areas that are currently experiencing conflict, are in the immediate post-conflict stage, or are at very high risk of exploding into conflict. (17) In these areas, exploitation can occur as part of the conflict funding process, for example through the "conflict diamonds" or "blood diamonds" extraction situation, (18) the post-conflict need for employment, which is often marked by desperate poverty on the part of the conflict survivors, (19) or the overall breakdown of recognized legal authority. (20) In the latter situation, the vacuum of legal authority can result in exploitative labor practices by those factions who either could be part of a future conflict or who were part of the conflict. (21) For multinational corporations that obtain resources or products from these areas, there is a very real possibility that these resources/products were obtained through illegal or at least unsavory labor practices. (22) For multinational corporations that are directly on the ground in these areas, there is a pronounced tension between following the often lax, if even existent labor law regimes at the domestic level and following the accepted corporate standards for labor, as well as the standards that the consumer market and general public would expect. (23)

    The problem of exploitative labor regimes is in no way limited to areas that are involved in conflict. In developing and even developed states, there are issues relating to the labor practices of multinational corporations and their affiliates. (24) These issues range from fair wages paid to employees, (25) equality in wages between genders and ages, (26) the use of child labor, particularly in dangerous circumstances, (27) freedom to enter into and leave employment, (28) employment discrimination, (29) set working hours and mandatory time off for workers, (30) health concerns of employees and the maintenance of healthy working facilities for employees, (31) the ability of employees to freely bring grievances without repercussions, (32) the ability of employees to form and participate in unions and without repercussions, (33) and the respect for and enforcement of the domestic labor laws of the host state. (34)

    In developed states these issues are certainly present and offer their own set of challenges at the worker and corporate levels. (35) However, at the level of developing states these challenges become more complicated, particularly in areas with weak labor law regimes or weak enforcement of labor law regimes. (36) This is not to suggest that globalization has been or necessarily must be negative for labor law regimes in general.

    There are examples of positive labor practices by multinational corporations--directly or through the subsidiaries and contractors used by multinational corporations in the host states--and in these examples there is evidence of societal and even legal advancement for the workers involved. (37) Indeed, it has been noted that multinational corporations can offer a moderating influence in conflict and post-conflict areas if they are careful in crafting their labor practices. (38) It has also been noted that multinational corporations can assist in the creation of greater protections for workers under domestic labor law regimes in conflict affected, postconflict, and non-conflict affected areas, provided that the multinational corporation is willing to do so or to provide backing to trade unions that are involved in the process. (39) Rather than blaming or glorifying the multinational corporation, the lesson of this Part is that globalization, as seen through the multinational corporation, can have both negative and positive impacts on labor law regimes.

  3. CORPORATE SOCIAL RESPONSIBILITY: WHAT IS IT?

    Corporate social responsibility is defined in myriad ways by international organizations, domestic organizations, the...

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