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THE NATION: EDITORIAL/Doing busines
- Subject: THE NATION: EDITORIAL/Doing busines
- From: suriya@xxxxxxxxxxxx
- Date: Mon, 27 Apr 1998 19:13:00
Editorial & Opinion
EDITORIAL/Doing
business without a
conscience
Business is business, politics is politics,
and never the twain shall meet. Indeed,
most investors would argue that business
should not be mixed with politics. Are not
Asia's economic troubles, they ask, the
result of the hand-in-glove ties between big
business and corrupt politicians which
spawned ''crony'' capitalism?
There is, however, a growing consumer
movement calling for businesses to
recognise the political reality in which they
operate and share the responsibility of
protecting and promoting human rights with
individuals and governments. Multinationals
that have come under the pressure of this
''social responsibility'' movement include
Levi Strauss and Nike.
In 1992 apparel-maker Levi Strauss
withdrew from Burma, considered by the
global community as a human-rights pariah
state, because ''it was not possible to do
business without directly supporting the
military government and its pervasive
human-rights violations'', and a year later
the company began a phased withdrawal
from making clothes in China after a panel
of senior company executives found
rampant problems of labour abuse by
contractors and suppliers. Likewise
shoemaker Nike has developed a ''code of
conduct'' for its international business
dealings and seeks to ensure that its
sub-contractors in China, Indonesia and
Vietnam follow the company's stance on
wages and working conditions.
However, the announcement this month that
Levi Strauss planned to go back to China
and the lawsuit against Nike for ostensibly
not sticking to its code of conduct have
shown that such corporate responsibility is
nothing more than a publicity stunt.
Indeed the decision by Levi Strauss to
re-enter the lucrative Chinese market was
not a major policy reversal. Levi Strauss
never stopped making clothes in China: its
Hong Kong subsidiary continues to
manufacture clothes on contract at plants in
neighbouring Guangdong province.
And last week Nike was slapped with a
lawsuit for violating California's consumer
laws by wilfully misleading the public about
working conditions for the thousands of
Asian labourers who help make its
trademark footwear. Lawyers in filing the
civil suit said that despite the campaign to
promote itself as a model of corporate
responsibility, Nike ignored the sweatshop
conditions of the mostly young-women
workforce working for its Asian
sub-contractors.
For Nike this is the latest in a series of
public-relations disasters after being
caught covering up an auditor's report of a
hazard-ridden factory in Vietnam some
years ago.
The suit alleges that contrary to statements
by Nike, Asian workers are regularly
subject to physical punishment and sexual
abuse. It says the workers are often
exposed to dangerous chemicals, forced to
work overtime, sometimes without pay, and
are often unable to earn a living wage
despite workdays that can be 14 hours
long.
Like it or not, global capitalism has made it
difficult for anyone to operate a business
with a conscience. In theory ''constructive
engagement'' by businesses can help
improve working conditions and provide
decent wages in countries multinationals
invest in, but in practice cut-throat global
competition means intense pressure to cut
costs.
Indeed few companies want to have
anything to do with human rights, and when
they do, like Levi Strauss and Nike, they
pay lip-service to corporate responsibility.
Instead many have used the absence of
''corporate responsible'' competitors to
penetrate new markets. Worse still, pariah
companies such as the tobacco firms,
which face increasing litigation problems at
home, are peddling cigarettes to the
''replacement smokers'' in Asia, especially
to teens.
This leaves consumers with the heavy
responsibility of maintaining the pressure
on socially irresponsible companies
through awareness campaigns and
boycotts, but most companies know that the
global consumer movement is not strong
enough to keep them on their toes. Levi
Strauss and Nike may think they are being
unfairly singled out for criticism. Indeed they
are the tip of the iceberg, but it makes a
start.