Zack Gross
Zack Gross

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Corporations Should Consider their Social Responsibilities 

Brandon Sun “Small World” Column, Monday,  Monday, January 23 / 12

Zack Gross

The Occupy Movement has demonstrated that there is popular sentiment against the rich and powerful in our world, whether it is characterized as the banks, as corporate bosses or those who are known for their conspicuous consumption, while others in this recession lose their homes and businesses or, indeed, are sick or starving with no one to help.

There is no question that there are institutional and corporate “bad guys” out there.  Just look at the news or do some surfing on Google.  Soft drink companies are union busting in Latin America, accused of murder and rape in order to bring about “labour peace
.”  Mining companies, often Canadian ones, are tearing up the land in Latin America, Africa and Asia with little regard for the natural environment, aboriginal culture, human rights and fair pay.

Drug companies are often cited for promoting expensive name brands and blocking the distribution of cheaper generic varieties in the name of profit, while the world’s poor continue to struggle with HIV/AIDS, malaria and other diseases.  Nestle’s and Hershey continue to benefit from child slavery in the cocoa and sugar plantations of West Africa, rather than sign on to the fair trade regimen. 

Corporations have lobbied and organized to fight back against regulations that would curb their profit-making ways.  “Reasonable” profit may not be the villain, but certainly the exploitation of producers and workers and the degradation of the environment in the service of maximum financial yields are.  Aside from obvious forms of evil-doing, companies also drive hard bargains in the countries and communities in which they operate, demanding tax breaks, subsidies and infrastructure projects (buildings, hydro, telephone, roads).

As well, Free Trade Agreements have made the world friendlier than ever for multinational corporations.  The possibility that any national regulation on global companies might hamper their ability to make maximum profits can bring about a lawsuit under NAFTA, for instance, to be arbitrated by the World Trade Organization.  As the vast majority of multinationals are American, Japanese or European, the rest are at a disadvantage to stand in their way, especially the poorer countries where these companies are extracting mineral resources and agricultural commodities.

Corporate social responsibility is not a new idea.  Since the 1970s, poorer countries, NGOs and social movements have been lobbying for fairer treatment in trade and economic development.  The Group of 77 (now made up of 123 United Nations member states) has long been a voice for developing and non-aligned nations seeking a better deal from the rich world. 

Kofi Annan, past UN Secretary General set up the Global Compact, a voluntary initiative aimed at getting business involved in adhering to and promoting ten principles derived from previous UN declarations and conventions, such as the Universal Declaration of Human Rights, the Rio Declaration on Environment & Development, and the UN Convention Against Corruption.  While this is a laudable initiative, it is not legally binding – there is no compulsion and there is no inspection.

A recent Canada Business Network newsletter, put out by our federal government for entrepreneurs, points out that being socially responsible (or being seen to be) is a way of “staying competitive in today’s market."  It goes on to say that businesses are recognizing that there is increasing consumer demand for products and services that take responsibility for their impact on the environment, their employees and the general public. 

It is suggested that companies adopt “green” practices in their operations and develop community outreach programs that benefit the “less fortunate.”

You can find a recent detailed listing of the
50 companies that Macleans magazine considers most socially responsible.  Banks, car and computer companies, condiment and cereal firms and many others are highlighted for the good that they do. 

Unfortunately, no questions are asked of many of these companies about the “other side” of their operations. 

One company which currently advertises its major donation to the preservation of polar bears also stands accused of human rights abuses around the world.

In Manitoba, a number of institutions and businesses have taken steps to be socially responsible.  Some credit unions have become strong supporters of community economic development initiatives, well beyond the usual funding of kids’ hockey jerseys.  Many companies are implementing environmental audits of their buildings and programs to make them less wasteful and polluting.

Liquor Marts have brought in growing amounts of organic and
fair trade wines, while grocery chains do the same with coffees, teas and chocolate products.

The challenge is to go beyond the Jekyll & Hyde situation where corporations may carry on exploitive practices in one realm while they do something socially responsible in another – where they take land away from indigenous people in a developing country in order to extract their resources while using a small portion of their profits to support a social service project back home. 

Can multinationals be good citizens in all their activities?  Is this a realistic goal or does it defy the definition of multinational business?  While these questions are yet to be answered, past practices don’t make us optimistic.


Zack Gross works for the 
Manitoba Council for International Co-operation (MCIC), a coalition of more than 40 international development organizations.

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