CAPÍTULO II. METODOLOGÍA
2.3. Técnicas e instrumentos de recolección y análisis de datos
As the examples of human rights violations by business actors proliferated, the regulatory debate raged with stakeholders falling into two distinct, and now familiar, irreconcilable factions.251 On the one hand, the ‘business case’ sought to minimise regulatory attempts
and advocated pure self-regulation via voluntary codes of conduct and industry-based schemes.252 Voluntarism is predicated on the idea of the business case for CSR253 and in the words of Olivier De Schutter it is ‘at first impression highly convincing’ as an argument.254 The business case proceeds from the assumption that adherence to CSR standards makes good business sense. Put simply, the argument is that CSR is
economically advantageous for business, and in particular that consumers will favour companies which act in an ethically responsible manner. Firms that act consistently with CSR standards will not lose competitiveness. Rather they may actually enhance their competitive position through improvements to their image and thus their marketing
250 House of Lords/House of Commons Joint Committee on Human Rights, ‘Any of our business? Human
Rights and the UK private sector,’ First Report of Session 2009-10, Vol.1, HL Paper 5-I, HC 64-I, 16th December 2009 at 96 para.17.
251 Originating in the work of C.C.Walton, Corporate Social Responsibilities (Wadsworth: Belmont CA,
1967) at 18. See: A.B.Carroll, ‘Corporate Social Responsibility: Evolution of a Definitional Construct’ 38 Business Society (1999) 268-295 at 272.
252 See e.g. the keynote speech by the Chief Legal Counsel for Royal Dutch/Shell at the International Law
Association’s 69th Conference, 26 July 2000, ‘Foreign Investment, Human Rights and Development:
Integration or Fragmentation?’ [on file with author].
253 For an outline of the business case argument see e.g. O.C.De Schutter, ‘Corporate Social Responsibility
European Style’ 14 European Law Journal, 203–236 (2008) (hereinafter ‘De Schutter’) at 217-219.
254 De Schutter ibid at 218. See e.g. A.Martinuzzi, S.Gisch-Boie & A.Wiman, Research Institute for
Managing Sustainability, ‘Does Corporate Responsibility Pay Off? Exploring the links between CSR and competitiveness in Europe’s industrial sectors’ http://ec.europa.eu/enterprise/policies/sustainable-business/ files/csr/documents/stakeholder_forum/
prospects. De Schutter writes that there is an inherent danger in linking good corporate behaviour to ‘economic returns.’255 He concludes that such an approach fails to
acknowledge that CSR may not be profitable and that by encouraging firms to comply with CSR standards because it is commercially advantageous may in fact implicitly permit non- compliance or implementation when it becomes apparent that CSR actually increases costs.256 He further argues that the business case for voluntarism is ‘fragile’ because it depends on a competing number of factors such as the initiatives adopted by a business, the costs of implementation, impact and context.257 Finally he warns that adherence to the business case:
serves to create the impression that the development of CSR will make natural
progress, in a sort of evolutionary growth driven by market mechanisms, without such progress having to be encouraged or artificially produced by an intervention of public authorities. There is a very thin line between the idea that ‘CSR is profitable for business’ and the idea that ‘CSR may take care of itself’. This consequence should be avoided at all costs.258
Those who argue for a voluntarism-based approach to CSR therefore need to respond to the following question: if CSR does in fact enhance competitiveness, then why does business choose voluntary measures only? What does business have to fear from non- voluntary measures? There are a variety of potential commercial reasons for a business case response.
Aside from what appears to be a generalized distaste for regulation,259 it seems that there is
also a perception that imposed CSR will be more expensive in terms of production costs such as wages and employee benefits, and administration. The argument is that this extra
255 De Schutter ibid. 256 De Schutter ibid. 257 De Schutter ibid at 219. 258 De Schutter ibid.
259 See for example, business responses to the EU Commission Green Paper on Promoting a European Framework for Corporate Social Responsibility, at 3, COM (2001) 366 final (18 July 2001) http://eur- lex.europa.eu/LexUriServ/site/en/com/2001/com2001_0366en01.pdf [last accessed 22.8.11]. See also the State responses to the consultation conducted by the OHCHR on the proposed UN Norms on the
Responsibility of Transnational Corporations and Other Business Enterprises with regard to human rights obligations UN Doc. E/ CN.4/Sub.2/2003/12/Rev.2 of 26 August 2003 and which became part of the ‘Report of the United Nations High Commissioner on Human Rights on the responsibilities of transnational
corporations and related business enterprises with regard to human rights E/CN.4/2005/91,15 February 2005. Excerpts from the submissions to the OHCHR can be viewed here: http://reports-and-materials.org/UN- submissions-excerpts-16-Nov-2004.doc [last accessed 22.8.11].
expense will affect the competitiveness of corporations in the global marketplace. Such perceptions are linked to a neo-liberal, laissez faire attitude to commercial activities, that is, the view that the market is the most efficient mechanism to dictate how business
operates. Only minimal regulation, as necessary to correct the standard ‘market failures’, is therefore necessary or appropriate. Wouters and Chanet explain the decision thus:
Proponents of the ‘business case’ explain that corporations are financially rewarded for behaving responsibly in various ways. They argue that not only consumers, but also investors and even workers attach importance to corporations’ human rights records and have a clear preference for responsible businesses. Thus, the market itself acts as an important and sufficient incentive for corporations to take human rights into account, since responsible behavior leads to higher profits. This assumption leads them to conclude that a voluntary approach to corporate responsibility is sufficient.260 This is a position espoused historically by the majority of States 261 although the empirical
evidence supporting it is weak.262 As David Vogel points out, ‘companies will engage in
CSR only to the extent that it makes business sense for them to do so’ but it only makes good business sense ‘if the costs of the more virtuous behaviour remain modest.’263 He
concludes that ‘the market for virtue is not sufficiently important to make it in the interest of all firms to behave more responsibly.’264 In other words, there will always be some
business actors which choose to ignore societal pressures to behave in a socially responsible manner.265 Nevertheless, there will also be what John Parkinson calls
‘enlightened’ business actors which see the wider and inherent benefits of ethical behaviour irrespective of the economic impact:
Enlightened companies will recognise that responsible behaviour is often a
prerequisite for long-term profitability, but ethically and socially desirable conduct
260 Wouters & Chanet note 90 at 266-267 para 12.
261 See the State responses to the Norms cited at note 259. Although many States objected to the perceived
ultra vires activities of the Sub-Committee for the Promotion and Protection of Human Rights, most were concerned about the idea that business enterprises would become objects of international law.
262 See e.g. D.McBarnet,‘Corporate Social Responsibility Beyond Law, Through Law, For Law: The New
Corporate Accountability’ (hereinafter ‘McBarnet’), in D.McBarnet, A.Voiculescu & T.Campbell, (eds), The
New Corporate Accountability: Corporate Social Responsibility and the Law (Cambridge University Press,
Cambridge, 2007) 9- 56. Also available as an Oxford Legal Studies Research Paper No. 3/2008.
263 Vogel note 65 at 4. 264 Vogel ibid at 16.
265 See for example Afrimex (UK) Limited discussed in detail in Chapter 5 at Section 5.6.; Final Statement
by the UK National Contact Point for the OECD Guidelines for Multinational Enterprises: Afrimex (UK) Ltd, 28 August 2008, URN 08/1209 (Afrimex Final Statement) http://www.bis.gov.uk/policies/business- sectors/low-carbon-business-opportunities/sustainable-development/corporate-responsibility/uk-ncp-oecd- guidelines/cases/final-statements [last accessed 22.8.11].
should not be seen merely as a means of promoting competitive success. Rather managers should regard ethical and social values as possessing independent weight, and should accept that respect for them will sometimes require companies to make less than the maximum possible profits.266
These ‘enlightened’ companies fall within Thomas McInerney’s Group A or Group B categories of business actors.267 He writes:
Many regulatory scholars recognize that there are four types of companies with which regulators have to deal. These four types include: those who know the law and are willing to follow it (Group A); those who do not know the law but would like to be law abiding (Group B); those who know the law and do not want to follow it (Group C); and those who do not know the law and do not wish to be law abiding (Group D). Most CSR literature does not even reflect these basics. As this analysis suggests, Group A firms are willing to comply on intrinsic grounds.268
The logical conclusion, therefore is that a voluntary CSR framework is effective only in relation to the already enlightened, for as McInerney surmises ‘it seems that it is precisely Group A that represents its greatest source of support.‘269 He continues plaintively,
‘[s]urely CSR must be more ambitious than seeking to ensure that the good continue to be good?’270
This is the crux of the matter. The businesses which operate with the most flagrant disregard for human rights standards will never adhere to a voluntary framework and this is the key reason for opposing the business case for self-regulation. Rogue business elements operating across the globe serve to underline the pressing need for a binding international legal architecture. Voluntary CSR and ‘market forces’ will never be ‘strong enough’ to secure responsible behaviour by such actors ‘over and above their obligation to comply with their legal obligations.’271
266 Parkinson note 179 at 62.
267 T.McInerney, ‘Putting Regulation Before Responsibility: Towards Binding Norms of Corporate Social
Responsibility’ 40 Cornell Int’l L.J. 171-200 (2007) at 185.
268 Ibid. McInerney cites e.g. R.Baldwin & M.Cave, Understanding Regulation: Theory, Strategy and Practice (OUP: Oxford, 1999).
269 Ibid. 270 Ibid.
Furthermore, while a large majority of consumers claim that they would choose ethical products despite the extra expense or boycott businesses which violate human rights, the reality is very different.272 Wouters and Chanet argue rightly:
The idea that good responsible behaviour leads to increased profits may be a good incentive for corporations to act responsibly, but it should never be seen as the ultimate reason for responsible behaviour. Corporations have to behave responsibly because it is their duty to do so, not because it helps them to make more profits.273
They agree with the principal thrust of this dissertation, declaring that the ‘business case does not suffice’ and that ‘an appropriate regulatory framework is needed.’274
Such a view was adopted by a group composed largely of NGOs, trade unions and other members of civil society which oppose the purely voluntary, market-driven business case for CSR. Rather, they demand hard regulation and nothing less than a full blown
international covenant will suffice.275 As the UN Development Programme (UNDP) put it
in 1999:
...multinational corporations are too important and too dominant a part of the global economy for voluntary codes to be enough. Globally agreed principles and policies are needed...276
This binary division muddied the waters for many years as supporters of each approach extolled the virtues of their favoured methodology: this ultimately resulted in stalemate.277
The tension played out subsequently in every international organisation in which there has been a debate about CSR, with the so-called ‘business case’ for voluntarism prevailing. Thus, the UN Global Compact (a forum for business leaders), the OECD and the European Union analysed in Chapters 4, 5 and 6 respectively continue to emphasize the voluntary
272 See e.g.; McBarnet note 262 at 17-18; Vogel note 65 at 16. 273 Wouters & Chanet note 90 at 267 para. 13.
274 Ibid at para. 20.
275 See e.g. NGO responses to the UN Norms note 259.
276 UNDP, Human Development Report 1999: Globalization with a Human Face,’ (OUP: New York/Oxford,
1999) http://hdr.undp.org/en/media/HDR_1999_EN.pdf [last accessed 22.8.11] at 100.
277 See generally e.g. H.Ward, ‘Corporate Social Responsibility in Law and Policy,’ in N. Boeger, R. Murray,
R. & C. Villiers, (eds), Perspectives on Corporate Social Responsibility (Cheltenham: Edward Elgar, 2008) 8-38.
nature of CSR. As a result no enforceable regulatory or dispute settlement mechanism has developed.
These definitional problems continue to this day as there is no one favoured definition of CSR, with stakeholders adopting positions which in some cases remain poles apart.278 At a
basic level CSR has become a term of art which symbolises that all businesses have obligations beyond the financial and commercial and which includes social obligations, particularly in the spheres of human rights and the environment but there is no consensus as to how these obligations are to be imposed, whether they ought to act as a deterrent or indeed whether they ought to provide redress for those on the receiving end of business misconduct. States for the most part have consistently resisted a hard regulatory CSR framework and thus with clear institutional support, the term CSR has come to represent voluntarism. As this dissertation will demonstrate, such an approach is inconsistent with effective CSR largely because it enables too many businesses to escape regulatory capture.
1.6 State and Institutional Responses to Business and Human Rights