In Britain, Oxfam and World Development Movement (WDM) are pressing on the UK government to improve national law and policy, in order to make it possible to sue corporations or put pressure on them to abide by the law.
WDM, having been frustrated by attempts to promote voluntary codes of conduct effectively, has shifted its focus towards promoting enforceable regulations and their use as a complement to voluntary codes. Here it is focusing on the UK government and especially a review of company law. The key issue is the need to change the idea that a company’s legal responsibility is primarily to its shareholders. WDM wants this responsibility extended not only to all UK stakeholders, for instance employees, but also to overseas stakeholders.
The question of international regulation of MNCs is more complex. WDM identified from international agreements a list of rights which corporations can be expected to respect. However, states are often unwilling to implement these rights, and WDM is still examining whether corporations can be made directly responsible in for implementing them. Even harder to regulate is the economic impact of MNC activity in host countries, especially in the context of mergers and other shifts in corporate ownership. To what extent can these aspects be regulated by national or even international law?
More indirectly, WDM is challenging the power of MNCs through work on the Biosafety Protocol, in which it aims to strengthen the power of Southern governments to refuse to import genetically modified (GM) crops, giving both consumers and producers some rights against the companies which are pushing GM crops.
6.1.5 Advocacy with Companies
As well as work on codes of conduct, some NGOs are carrying out other forms of advocacy with companies. For Amnesty International, the protection of economic and social rights has not been part of the core mandate, but this emphasis is changing, and AI sees that to remain relevant it must address the human rights impact of globalisation and free trade. The Business Group of AI UK (AIBG) has a number of activities aimed at getting companies to be more aware of the human rights implications of their operations, including a letter campaign sensitising companies operating in Indonesia to the East Timor crisis. In situations where human rights violations are prevalent, companies’ activities can either contribute to these violations or can protect human rights. AIBG outlines a series of policies which companies can adopt in such situations in its Human rights guidelines for companies.
Over the last year or so, AIBG has also been working on issues of corporate governance, using the example of pension funds. Local authorities invest huge sums of money in companies in this area, and are concerned with accountability. Pension funds control as much as a third of the Stock Exchange. A recent amendment to the Pensions Act requires all pension funds now to declare whether or not they have an ethical policy, and AIBG sees this as an opportunity to get the major financial institutions which manage their funds to develop their own ethical policies and criteria.
AI in the Netherlands has been involved since the 1970s in advocacy with companies on human rights, and is currently working on terms of reference for companies in this respect. However, as Gemma Crijns pointed out, companies have proven ignorant of even the basic notions of human rights and have only in the last few years become acquainted with human rights instruments such as the ILO Conventions and OECD Guidelines. AIBG is trying to develop terms of reference for companies in the sphere of human rights, and is also asking AI members to ask their pension funds about their activities.
Adidas: Not Playing By The Rules
Carole Crabbe of Oxfam Magasins du Monde (OMM, Belgium) reported on an initiative being undertaken in the context of the Clean Clothes Campaign (CCC) against Adidas. Based in Germany, Adidas is the mother company to many subcontractors in countries where low wages and poor working conditions are common. Under pressure from public opinion in 1998, it signed a very low-level voluntary code of conduct, which says nothing about implementation, monitoring, or sanctions.
Adidas is a sponsor of the Euro 2000 football tournament. In the run up to the tournament, CCC asked the Euro 2000 organisers to include in their contract with sponsors the so-called FIFA code of conduct, which, although FIFA apparently has not actually signed it, is a much better code than Adidas’ own code and is based on ILO Conventions, with provisions for implementation and sanctions. This has been done, which means that all footballs and equipment made by Adidas and bearing the E2000 logo must comply with the FIFA code.
Meanwhile, several violations of workers’ rights in Bulgaria, El Salvador, Thailand, and Indonesia have emerged, including denial of freedom of association, paying less than minimum wages, excessive working hours, making workers take pregnancy tests, and prohibition of collective bargaining. In March 2000, OMM tried to present the cases to the Euro 2000 as evidence of violation of workers’ rights in the supply chain, but they accepted no further responsibility. OMM is continuing to draw attention to the violations, for instance by sending a television team to one of the countries involved, but would also like to move on the legal front against either Adidas or Euro 2000.
Seminar participants discussed the basis and fora in which these cases could be pursued at the home-state, regional and international levels. Possibilities raised included proceeding against the Bulgarian government for allowing violation of ILO conventions in its jurisdiction, or against Germany for allowing its citizens to violate those rules; bringing a claim against Adidas in Germany, its home state; or bringing a case against Adidas in Belgium on the grounds of false advertising (using the Euro 2000 logo on its equipment while breaking the FIFA code). However, a two-pronged process was recommended, in which, if NGOs could get strong enough evidence of the violations, lawyers could use it to identify the most appropriate legal instruments and begin to apply them.
Predictable problems were also raised. The agreement of the workers concerned would have to be obtained before taking the case forward, and they would be unlikely to favour any action that would further endanger them. Might Adidas reply that it cannot guarantee the quality of all its subcontractors and suppliers? Would evidence have to be found that Adidas is in fact using the FIFA code of conduct for publicity purposes? Strong arguments would have to be found for targeting Adidas specifically, so that other sports goods companies such as Reebok and Nike would not seem to be let off the hook. Is litigation advisable if it means that the company might pull out of a country where it is a key contributor to the local economy? Finally, what if Adidas starts a libel action against the NGOs?