The multinational and the "new stakeholder": examining the business case for human rights.

• Author: Greathead, Scott

1. INTRODUCTION

   There was once a time in the United States when corporate executives were white men in suits, men who had to think of nothing other than maximizing the profits of their companies--companies whose only stakeholders were shareholders.

   Some of the realities of doing business in the global economy include the concerns of new stakeholders such as these:

   * Soccer moms who refuse to buy a famous line of soccer balls after reading reports that they are hand sewn in Pakistan by children. (1)

   * Talented African-American MBAs who will not interview with a company because it has a poor record of promoting minorities; (2)

   * College students who protest their university's licensing agreement with a sportswear manufacturer that uses a Guatemala factory that allegedly abuses workers; (3)

   * Money managers with clients who refuse to invest in companies with poor environmental ratings; (4)

   * Assertive reporters who will call a CEO at home to ask him if he knows the paper clips sold in his national retail chain were made by prisoners in China; (5)

   * Indigenous groups who will no longer passively accept the presence in their ancestral lands of big oil and mining companies that exploit natural resources without coming to terms with local communities. (6)

   Business managers who ignore these realities--the concerns of these new corporate stakeholders--do so at the risk of their company's brand and their own careers. These are just a few examples of the new stakeholders of multinational corporations--workers, consumers, investors, indigenous peoples, non-governmental organizations (NGOs), and the media.

2. GLOBALIZATION AND THE NEW HUMAN RIGHTS AGENDA

   The concerns of these new stakeholders embrace human rights. It is a much broader concept of human rights, however, than the civil and political rights that used to dominate the agenda. Former concerns centered on freedom from arbitrary arrest, detentions, and other due process rights, freedom of speech and association, and governmental abuses such as torture, disappearances, and extrajudicial executions. These new human right concerns focus on social and economic rights--the rights to live and work in a safe and healthy environment, the rights of workers to associate freely and bargain collectively, the cultural rights of indigenous people.

   The emergence of these new rights has marked important changes in the human rights agenda. Ten years ago the main players in the human rights drama were governments, the victims of governmental human rights abuses, and human rights NGOs. Now the major players include multinational corporations and a host of advocacy NGOs, representing causes ranging from the environment, labor rights, and women's rights to the cultural rights of indigenous peoples.

   During the twenty years that the Author has worked in the human rights movement, the focus of the community has been on traditional political and civil rights--and abuses perpetrated by repressive and abusive governments, both totalitarian governments on the left, and authoritarian regimes on the right. The end of the Cold War and the fall of most Communist governments in the late 1980s and early 1990s coincided with the replacement of many right wing regimes with democratic governments, particularly in the Western Hemisphere and also in parts of Asia. The governments of a host of countries that in 1984 were run by military or authoritarian figures--Chile, Argentina, Paraguay, Uruguay, the Philippines, Korea, to name a few of the major ones--are today relatively democratic.

   It is important to examine how and why these changes occurred. These developments coincided with economic changes that newspapers and other commentators call the globalization of the world economy. (7) The term is used to capture a host of changes in transportation and communication--the result of which has been that most of the clothes we wear, the shoes on our feet, and the toys our kids play with are now manufactured in low-wage countries in Asia and Latin America, where there is little or no regulation of workplace health and safety, and where workers' rights to organize often are not respected.

   Globalization has also involved improvements in communication, by satellite and the Internet, so that the actions of multinational corporations in remote places can be known and disseminated throughout the world in a matter of minutes or hours. Any multinational oil executive will admit that no confrontation between security forces defending a remote jungle oil production site and a tribal group protesting an incursion into their ancestral lands will go unnoticed for very long these days.

   These developments have meant big changes for the human rights community--and even bigger changes for business. The...