Making companies accountable
Those who benefit most from free market globalisation are the giant companies of the world - otherwise known as Multinational Enterprises (MNEs) or Transnational Corporations (TNCs).
They have grown to have enormous economic and political influence. Over half of the world's 100 leading economies are private companies, not countries. Their home bases are usually the industrialised countries - the USA, Japan, Germany, the UK and elsewhere in Europe. Their operations stretch across the world, supported by new technologies in communications, information technology and transport.
As the economies of more and more countries have opened up - often under pressure from the World Trade Organisation and the international financial institutions (see Sheet 9) - these giant corporations have been able to search out the best sources of raw materials and labour, and exploit more consumer markets. Brand-names such as Nike, Coca Cola, and CNN have become part of everyday life among the middle classes worldwide.
Many people around the world are very concerned about the increasing influence that big business wields among governments at both the national and international level. It has caused great fear about the impact on democracy and the accountability of governments.
Often by sharing information through the Internet, people have learnt of serious violations of workers' rights throughout the global supply chain that produces, transports and distributes goods and services. Consumer campaigns have grown about both the environmental and labour practices of these powerful corporations. There is an ever stronger demand that, instead of being allowed to operate just as they like - the 'free' market - private corporations should be made accountable for the impact of their operations on the world's people and environment.
Toy Workers' Rights
Who makes the toys our children enjoy? ICTU and Trócaire ran a four-year campaign to raise public awareness about toy workers' rights. It won a lot of media coverage. Teachers brought the issue into the classroom. Thousands of postcards were sent to the major companies involved: Hasbro, Mattel and McDonald's. Many toys are produced in China and so links were built to trade unionists in Hong Kong.
Hasbro came under pressure from trade unions including SIPTU at its European Works Council and it revised its Global Ethics Policy. Mattel introduced a code of Global Manufacturing Principles. In 2002, McDonald's published its first ever Social Responsibility Report. These are useful steps. But campaigners will need to keep monitoring whether these codes are more than just paper.
Corporate Social Responsibility
'Ethical business' has become quite a fashion. Facing growing complaints about their bad practices, some companies have adopted a Code of Conduct, a statement of how the company and perhaps the suppliers it uses should operate. There are also new international standards such as SA8000 to which companies sign up and agree to be monitored.
Governments too have come up with statements about how companies should behave. The industrialised countries have agreed the OECD Guidelines for Multinational Enterprises. There are similar initiatives in the European Union.
Where companies are sensitive to their public image, such codes and guidelines can be a useful tool. But some codes are very weak in what they say and the biggest problem is making sure they are put into practice. All these initiatives are 'voluntary', this is to say not legally enforceable. Companies lobby governments very hard to avoid legal restrictions.
If codes or guidelines are to have any positive impact, there must be independent monitoring that involves workers on the shop-floor. Workers must be consulted, free of any intimidation, and be free to organise their own trade union responses.
Global framework agreements have been reached between international trade union bodies and a few multinational employers. They usually include a commitment by the company to observe core ILO labour standards throughout its worldwide operations and to allow monitoring by unions. One such agreement has been reached by the International Union of Foodworkers (IUF) with the French food giant Danone which employs over 85,000 people worldwide and has plants in both the UK and Ireland. Linking workers who work for the same multinational employer around the globe is an important role for the international trade unions.
- Corporate Watch: http://www.corpwatch.org/
- 'Users Guide to the OECD Guidelines for Multinational Enterprises': http://www.tuac.org/
- UNICORN, a Global Unions anti-corruption network: http://www.psiru.org/corruption
- Ethical Trading Initiative in the UK
- United Nations Global Compact with corporations: http://www.globalcompact.org/
- Hong Kong Christian Industrial Committee: http://www.cic.org.hk/