Global production, CSR and human rights: the courts of public opinion and the social licence to operate (original) (raw)

2015, The International Journal of Human Rights

This paper takes at its starting point the responsibility placed upon corporations by the United Nations' Protect, Respect and Remedy Framework as elaborated upon by the Guiding Principles on Business and Human Rights to respect human rights. The overt pragmatism and knowledge of the complex business relationships that are embedded in global production led John Ruggie, the author of the Framework, to adopt a structure for the relationship between human rights and business that built on the existing practices of Corporate Social Responsibility (CSR). His intention was that these practices should be developed to embrace respect for human rights by exhorting corporations to move from "the era of declaratory CSR" 1 to showing a demonstrable policy commitment to respect for human rights. The prime motivation for corporations to do this was, according to Ruggie, because the responsibility to respect was one that would be guarded and judged by the "courts of public opinion" as part of the social expectations imposed upon corporations or to put it another way as a condition of a corporation's social license to operate. 2 This article sets out the background context to the Framework and examines the structures that it puts forward. In its third and final section the article looks at how the Framework requires a corporation's social license to be assembled and how and by whom that social license will be judged. The success or failure of the Framework in persuading corporations to respect human rights is tied to whether "the courts of public opinion" can use their "naming and shaming power" effectively. 1. A Contextual Background to Ruggie's Appointment Accounts of what appear to be at worst flagrant disregard, and at best disinterest, by corporations of the human rights of individuals reach the mainstream Western media on a regular but atomized basis. Many people in the developed world are aware in very general terms that the production activities of corporations involve power imbalances between the various factors of production and the nation states they are located in. What is much less well known is the complexity of business relationships involved in productive activity. Any attempt to deal with human rights infractions by corporations needs to offer a strategy that addresses this complexity. Examples of recent publicized infractions would be the technology corporation Apple 3 and the mineral extractive corporation Rio Tinto 4 both of which were accused of benefitting from labour practices that abused the human rights of workers in China and Indonesia respectively, with Rio Tinto additionally accused of land grabbing and forced evictions in Madagascar. In both examples neither corporation is in an employee/employee relationship with the workers concerned. In Indonesia Rio Tinto is in an investment role as part of a joint venture at Grasberg mine which is controlled by Freeport (90.6% shareholding) with the remaining shares held by the Indonesian government. In Madagascar the mine in question was part owned by the Madagascan government. China, Indonesia and Madagascar have very different political and institutional structures from each other and from the US and UK and Australia where these corporations are incorporated and listed. Apple and Rio Tinto fit the classic model of large-scale corporations affecting foreign inward investment into lower cost labour or resource rich economies resulting in export-orientated industrialization in those states. 5 Apple's production facilities in China are enclosed in a contractual web involving locally based manufacturers who both produce components and obtain them from other manufacturers for further work and onward supply. This illustrates the development of the out sourced production paradigm into global value chains as the inward investment vehicle. 6 For many industries production is becoming increasingly fragmented into trade in value generating intermediate goods and services with activity located in webs of long term co-production relationships, franchises, affiliated business structures and more traditional arms length supply contracts, hence the name global value chains. 7 The presence of these chains make the tracking of responsibility for human rights abuses much more difficult. The collapse of the structurally unsound Bangladeshi clothing factory, Rana Plaza, in April 2013 that killed over 1100 workers revealed the tangled web of supply, subcontracting and labeling relationships that lie behind some consumer products. It is still not clear exactly which fashion chains were sourcing garments or part garments from this factory and on what legal basis they were doing so but they were