The problem with CSR is there is one too many CSR certifications. All aimed at certifying that a given company in a given industry is promoting the 3Ps – people, profit and planet.
CSR assurance certifications or “social audits” became popular in the 1980s and 1990s with the emergence of the global production networks (GPNs) in the labor-intensive and export-oriented industries such as the garments, footwear and electronics assembly industries. Trade union and consumer movements from the North such as the Clean Clothes Campaign of Europe and the No-Sweat Movement in America angrily denounced the slave-like production situation in a number of factories established by the multinational corporations in the South. These factories are usually found in union-free export-processing zones (EPZs) organized by governments of developing countries to seduce foreign investments. The criticisms ranged from labor abuses such as the non-payment of legally-mandated minimum wages to the employment of children and the existence of life-threatening conditions in congested and fire-prone production facilities. The huge fire that engulfed the lives of over a thousand women garments workers in the Rana Plaza of Bangladesh in 2013 and the series of suicides committed by young workers assembling Apple cellular materials in Foxconn’s garrison-like China factories have elicited global calls for binding Codes of Conduct to govern the behavior of MNCs and their GPN subcontractors, especially in their treatment of EPZ workers in Asia, Africa and Latin America.
So far, the United Nations has not adopted any binding Codes of Conduct for the MNCs. Instead, the UN’s labor agency, the International Labor Organization, has been promoting a “Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy”, which was adopted by the ILO Governing Body in 2000. The said Declaration seeks to “promote good social practices” in accordance with another ILO Declaration, the 1998 “Declaration on the Fundamental Principles and Rights at Work”, a seminal Declaration which reiterates the obligations of UN member states to respect the internationally-recognized core labor rights, namely: freedom of association, collective bargaining, non-discrimination at work, prohibition of forced labor and elimination of extreme forms of child labor.
The 2000 Tripartite Declaration is relatively weak. It respects the “sovereign rights of States” to maintain their respective national laws and regulations while giving “due consideration to local practices and respect” for “relevant international standards”. In short, the 2000 ILO Declaration on MNCs is based on moral suasion, not on enforceable global rules on how corporations shall conduct their business across borders in a responsible and ethical manner.
In the meantime, MNCs that are worried about their global image have been adopting their own respective or individual Codes of Conduct and have been reporting about the rigorous manner these Codes have been observed by their GPN subcontractors as attested by third-party “independent monitoring groups” or IMGs. The problem is that most of these Codes of Conduct are focused on the “concretes” such as the availability of clean rest rooms and readable fire exits. Codes of Conduct auditors routinely look for these concretes and tick them in the “tick-box” audit books. The point is that the disclosure and assessment of policies related to labor relations such as freedom of the workers to organize, employee access to a fair grievance procedure and non-discrimination based on sexual orientation and gender identity are given scant attention. More so on the social and environmental impact of the MNC operations on the host and neighboring communities. Thus, companies with sparkling buildings and yet engaged in excessive or avoidable casualization of work easily get seals of good housekeeping, the seals which the MNCs readily advertise in their global PR campaigns.
This is why there are continuing efforts by trade unions and civil society organizations worldwide to press governments to develop universal and legally-binding Codes of Conduct for corporations operating across borders. One outcome of this is the Global Compact Initiative launched in 2000 by former UN Secretary General Kofi Annan. The GCI was followed by the decision in 2011 by the UN Human Rights Council to adopt the 31 policy guideposts supporting the triad principles or PRR Framework advanced in the Report outlined by the UN Rapporteur on Business and Human Rights, namely – the duty of States to protect human and labor rights, the duty of corporations to respect these rights, and the duty of all stakeholders to find remedy for any violation of these rights.
The GCI and the accompanying UNHRC’s decision on business and human rights have elicited positive responses from advocates of human and labor rights everywhere. The problem is that they still have to be institutionalized in each UN member state. Like the ILO Tripartite Declaration on Principles Concerning Multinational Enterprises and Social Policy (2000), the GCI and the 2011 UNHRC’s PRR Framework are largely recommendatory in nature and compliance is based on moral suasion.
Hence, this column is recommending that the best option for the Philippines is for the government itself, under the decisive leadership of President Rodrigo Duterte, to forge a Social Compact with the country’s top 100 corporations on how the business community, as represented and led by the top 100, can be fully respectful of the rights of their own workers and the communities hosting their business presence, including the environmental rights of the whole nation. Like charity, corporate social responsibility should and must begin at home.
Why the top 100? The answer is simple: The top 100 control the commanding heights of the economy and they set the product and market standards for all business players. In this context, they also set the national standards and accepted practices in employee hiring, treatment of workers, skills development and development of various employee care and compensation programs. Thus, if the top 100 shall decide to stop the “endo” and other exploitative forms of employee hiring, the rest of the business community are likely to follow. Look at how the ISO 9000 quality product certification process, popular mainly among the top 100 corporations in the 1990s, has now been embraced by other firms nationwide. If the top 100 shall so decide, they can arrest the Race to the Bottom phenomenon, which is fueled by competition based on the desire of firms to have the cheapest and most malleable workers. By scaling up their CSR programs, the top 100 can trigger a Race to the Top based on productivity-focused social partnership with the workers and host communities.