Corporations and mass exploitation: Where does corporate social responsibility fit in?
Author: Femke Laauwen
The increased prominence of human rights in a range of discourses has led to a shift from these rights being discussed solely in political and academic circles to them experiencing more and more importance in the corporate realm. The emergence of corporate social responsibility can be observed as the clear manifestation of this shift towards a broader diameter of discourses surrounding human rights. This gives rise to a variety of new questions we need to ask. Does this have an impact on the prevalence of human rights violations? Do corporations really have a responsibility to impact human rights in the states within which they operate? Perhaps the most important question to ask is whether corporations, all of whom operate within the global economic framework of capitalism, are equipped to tackle these issues in the first place. We have all heard the criticism of this economic framework and how it stimulates human rights violations through profit maximization. I believe that we as a society need to take a critical stance in answering these questions and exploring this topic. I particularly feel that we should pay a greater amount of attention to the facade that is ‘corporate social responsibility’.
A troubling myth that human rights stand in the way of law and order, as well as economic growth, continues to prevail in many regions around the world. State or government oppression in the name of national security is not a new concept. It has been used for centuries and in many countries across the world. Although Western states currently aim to hide any elements of oppression and coercion, Eastern states, including China and, more recently, the Philippines, spend less time doing so, as human rights do not play an important role in their political agendas. Such countries see no use for these values socially, as their political power does not rely on the consent of citizens and instead on a sense of social stability. There is no ‘social contract’ in these states that binds the government to its citizens, and vice versa. Thus, the question arises, are human rights, and more broadly, corporate social responsibility, a Western concept? Or has this region simply taken a pragmatic approach to frame them in this way so as to excuse their own violations? I believe in the latter, as Nobel-prize-winning Amartya Sen has found that there is no support whatsoever to the claim that there is an inherent conflict between political rights and economic performance. Of course, this claim was made in relation to a state’s economic performance, so it is important to explore whether the truth in this statement changes once its referent object becomes a corporation.
Asia has seen massive economic growth in recent decades, owing largely to the expansion of both domestic and international corporations. As a result of the expanding economic power of these corporations, they also hold more political power. Therefore, we see parallel growth between this political power and corporate social responsibility as a framework from within which companies operate. But to what extent should this be perceived as a ‘good’ thing? Famed economist Milton Friedman once remarked that ‘the acceptance by corporate officials of a social responsibility’ could ‘thoroughly undermine the very foundations of our free society’. He comments that it is impossible for a corporation to know what their social responsibility is, or what the needs of society are. I am by no means a capitalist, but Friedman seems to have a point here. If we allow corporations to attempt to impact political processes in the countries within which they operate, we are simultaneously allowing for the convergence of political and economic interests, which is a dangerous progression. All corporations, no matter how small or large, seek to earn a profit. Therefore, they will likely not engage in activities which will impede their abilities to do so. Following this line of thought, if businesses perceive that fighting for the improve
ment of human rights, perhaps through promoting freedom of speech or expression, will improve their profit, then they will engage in such acts. This motivation is questionable, however, as these corporations thereby see human rights as profitable; they are profiting from rights that should be universal.
Even if we assume for a minute that corporate social responsibility is a good thing, and that it is able to impact human rights, there is no way to ignore the fact that, in Asia in particular, we often see a dangerous trend involving the convergence of political and economic interests. Furthermore, we also see a difference in how corporations utilize their corporate social responsibility depending on the political interest of the country in which they operate. In East and Southeast Asia, the dangers of the convergence of these interests become clear. Countries like Myanmar, Indonesia, the Philippines, and especially China have rolled back protections for workers in various industries aiming to attract external investments. In this sense, we see how the lack of regulations regarding human rights is profitable for these corporations: they are able to maximize their profits through minimizing investment in, for instance, worker salaries and the creation of a safe work environment.
In contrast, these same corporations, when operating in developed countries, often align their own economic interests, including their stance on corporate social responsibility, with the political interests of the state. Therefore, we increasingly see that in countries like the United States, the Netherlands, and Germany, corporations promote any and all activities they participate in that aim to improve society at large. Not only because this is more in-line with the political views of these nations, but also because it attracts more customers. Citizens within these countries are increasingly becoming aware of the power they have as consumers, and corporations are therefore following this trend.
The dichotomy between these two worlds demonstrates the dangers of corporate social responsibility, the convergence of political and economic interests, and the inclusion of human rights within business interests. I have said it before, and I will say it again: corporations seek to maximize profit. As a result, corporations will move their operations to countries with lax policies, in order to improve their commercial success. The inconsistent behaviour of these corporations in countries with differing levels of development illustrates this fact. I would like to end this article with a question to you: is corporate social responsibility a facade that we use to justify the convergence of political and economic interests?