and Human Rights

A shift in the terms of the debate over corporate social responsibility for human rights occurred in 1996. In the previous two years, corporations and governments had touted the positive impact of business and trade in enhancing respect for human rights in countries with widespread violations. They had promised that corporations would bring greater respect for essential human and labor rights, such as freedoms of association and expression, as well as an end to cruelty and discrimination and inequality on the basis of ethnicity or gender. However, during 1996 multinational corporations in several product sectors— Royal Dutch/Shell, British Petroleum Company, Total, Unocal, Freeport-McMoRan, Nike, Disney, Heineken, and Carlsberg, —were placed on the defensive by damaging exposures of corporate complicity in human rights violations. Throughout the year CEOs and corporate directors were stung again and again by charges that their companies had abused workers and propped up repressive governments. Accounts of child labor and sweatshop working conditions stirred public opinion to become human rights issues of broad popular concern. Corporate management defended its presence abroad by citing the advantage of company wage scales over local ones.

These issues were initially publicized by a growing number of activist groups. Frequently, these organizations brought workers on tours of the U.S. to publicize their situations. Extensively covered in the news media, the charges were taken up by consumers and grassroots organizations in Europe, Asia and North America. In a few instances, this had an important positive effect. After protests in Denmark and the Netherlands, both Carlsberg and Heineken decided to sell their shares of a proposed brewery in Burma. Liz Claiborne also decided to end its sourcing from Burma. At the height of the exposures of corporate complicity with human rights abuse, in July, The Economist magazine, reflecting the shift, observed that multinational corporations were increasingly worried about protests against their activities in developing countries. The same issue editorialized that when governments failed to uphold international human rights, the moral burden of responsibility shifted to corporate management.

However, with billions of dollars’ worth of investment and profit at stake, most of the business community resisted pressure. Generally corporations in oil, mining and heavy manufacturing made no pretense of concern. A small number in the apparel and footwear industries reacted to negative publicity by expressing a commitment to human rights and took limited steps to address the problems.

The Role of Governments
Government reaction to reports of abusive practices associated with corporate presence varied. The authorities in countries where these practices occurred frequently have erratic or poor human rights records Simultaneously, they promote ambitious economic development plans that invite foreign investment and they court corporations by offering conditions that will be attractive to them. Governments in China, Indonesia, and Mexico, for example, are all too willing to ignore irresponsible corporate practices.

In the countries where the companies are headquartered, governments are caught between their promotion of global corporate investment and the expectations they profess about investment advancing human rights. In 1996, political considerations and growing pressure forced many governments to take these issues seriously, yet did not lead to effective or credible policies. There were some exceptions, however. In Germany, the debate on child labor associated with the carpet industry in South Asia intensified due to mounting public concern. Based on consumer outrage over the use of child labor, the German government, beginning in 1993, gave serious consideration to the issue. Initially, Bonn funded the Rugmark campaign, a consumer-based effort to promote rugs produced without child labor. By 1996, the government shifted tactics to mix support of Rugmark and the Indian government-sponsored label with a preference for educational programs for children in South Asia. Nevertheless, the German government granted loan guarantees to Siemens and ABB for work on China’s controversial Three Gorges Dam, which had been criticized internationally for environmental risks and the forcible relocation of more than one million residents of the areas affected by construction.

In October, the European Parliament debated charges against British Petroleum of complicity in human rights abuses in Colombia through the financing of units of the armed forces of Colombia to protect a jointly owned pipeline. The parliament passed a resolution condemning BP for funding death squads in Colombia. The following day, the company denied all allegations and appeared prepared to take an uncompromising position. In the United Kingdom, Lord Frank Rudd and York Member of Parliament Hugh Bayley joined the York Oxfam Campaign Group in calling on five top clothing retailers— Marks & Spencer, C & A, Next, Sears and The Burton Group —to guarantee humane conditions for the workers who made the apparel sold in their stores. Such activism was not echoed more centrally in Prime Minister Major’s government, however.

The Canadian government’s interest in these issues was equally lukewarm. In 1996, Canada’s Department of External Affairs and International Trade raised the possibility of promulgating a voluntary code of conduct for Canadian businesses operating internationally. Prime Minister Jean Chretien, a strong proponent of Canadian corporate activity abroad, was confronted by a thirteen-year-old Canadian child labor activist, Craig Keilburger, during a January trip to India. Only after receiving scathing press coverage for initially refusing to meet Keilburger did the prime minister raise the issue of child labor publicly and mention possible sanctions for goods made by child labor imported into Canada.

The U.S. government, which has led the debate on corporate social responsibility for human rights, exemplified the contradictions in governmental efforts to address the issue. It engaged in several initiatives that generated needed attention to the issues and conveyed a sense of movement while failing to formulate effective programs. For example, in March 1995, the U.S. government had announced “Model Business Principles” for U.S. companies operating abroad; it then did nothing with them in 1996.

Due to the exposure of sweatshop conditions in developing countries, the revelation of widespread sweatshops in the U.S. and the discovery of Thai slave labor in an El Monte, California garment factory, the use of sweatshop labor became a major issue in the U.S. For example, Guess, Inc. and sixteen sewing contractors were charged with violating minimum wage and overtime regulations in a lawsuit. In June, in response to these concerns, Rep. George Miller, a member of Congress, called on retailers and manufacturers to voluntarily use labels on their goods stating that they had not used sweatshop labor and that they do permit independent monitoring of subcontractor plants. Following this initiative, on July 15-16, 1996, the U.S. Department of Labor hosted a “Fashion Industry Forum,” which was billed as an educational forum (largely for the industry) on the so-called No Sweat initiative. No Sweat was launched as an effort to label garments No Sweat to show they were not made in sweatshops. It was modeled after the “Dolphin Safe” tuna label and the Rugmark label. However, as of mid-November, three months later, there had been no follow-through.

On August 2, President Clinton launched another initiative: the Fair Labor Coalition. In a photo-perfect Rose Garden ceremony, the President brought together at the White House the television personality and clothing entrepreneur Kathie Lee Gifford, Nike Chair Philip Knight, and representatives of apparel corporations L.L. Bean, Liz Claiborne, Phillips Van-Heusen, Tweeds, Patagonia, Nicole Miller, Karen Kane, Warnaco, as well as the most important U.S. garment trade union, Unite, the National Consumer League, and the Interfaith Center on Corporate Responsibility, an important and activist shareholder group. Knight presented a vision of his objectives:

“For the past twenty-five years, Nike has provided good jobs, improved labor practices and raised standards of living wherever we operate, including here in the U.S. What we’ve come to realize is that we need to do a better job of publicly describing the actions we’ve taken to promote fair labor practices in newly emerging market societies, including the development of a code of conduct, internal monitoring and external audits.”

The results of the coalition’s work were scheduled to be known after six months, when its members would provide nonbinding recommendations to the president.

As timely as these high-profile initiatives were, it was not at all clear that they would affect specific corporate practices and lead to meaningful human rights improvements in and beyond factories internationally. As with the 1995 “Model Business Principles,” there was a real danger they would be little more than window-dressing.

In October, the U.S. Department of Labor published a comprehensive and accurate assessment of corporate compliance with voluntary codes of conduct addressing the use of child labor. The report showed that while there was decreased use of child labor in the Americas, little progress had been made in Asia, where the practice is much more prevalent.

The importance of these issues was not only felt at the federal level. In a significant development, cities debated adopting selective purchasing ordinances to prohibit public entities from buying goods or services from corporations doing business in Burma. In 1995, the city government of Berkeley, California, had adopted such a measure. In 1996, the state of Massachusetts passed a law banning contracts with firms doing business in Burma.

Nongovernmental Organization Initiatives
Shareholder groups, concerned pension funds and progressive money managers began to see corporate human rights practices as one criterion for investment decisions. Increasingly involved in shareholder resolution actions at companies in which they held stocks, these groups sought to identify standards by which to hold corporations accountable. At the same time, nongovernmental organizations concerned with corporate responsibility, including human rights groups and others, relied on both exposure of fact and consumer education.

In the Netherlands, Dutch activists mounted a campaign against Heineken Beer’s $30 million part-ownership in a brewery in Burma. When Heineken withdrew, company CEO Karel Vuursteen acknowledged the role that concern about corporate reputation had played in the decision.

In the U.K., Germany, and South Africa protestors engaged in a series of actions against Royal Dutch/Shell after the hanging of Ken Saro-Wiwa and eight other Ogoni activists in Nigeria in November 1995. Concerted efforts were made to introduce critical statements at the company’s annual general meeting in London on May 15. In Canada, Development and Peace collected nearly 90,000 signatures on petitions urging Nike to agree to independent monitoring of its subcontractors.

In the U.S., the National Labor Committee, Press for Change and the Guatemala Labor Education Project were very active in exposing conditions abroad.

In 1996, while continuing a dialogue with corporations, Human Rights Watch increasingly emphasized its research and advocacy by issuing reports linking corporate operations with violations of human rights, labor rights and women’s human rights. The Human Rights Watch Women’s Rights Project’s report No Guarantees: Sex Discrimination in Mexico’s Maquiladora Sector documented the Mexican government’s failure to protect women from pregnancy testing and other discriminatory treatment in major U.S.-owned export-processing factories along the U.S.-Mexico border. Naming names, the report cited General Motors, Sunbeam Oster, and Zenith, among others, for engaging in sex discrimination and mistreatment of pregnant workers. (See Women’s Rights Project.) Human Rights Watch/Asia and the Human Rights Watch Children’s Rights Project released The Small Hands of Slavery: Bonded Child Labor in India, documenting the enslavement of millions of child workers through debt bondage. The report formulated extensive recommendations to end bonded child labor.

In the last few years, a small “leadership” segment of the corporate community has emerged, representing largely the apparel and footwear industries. It meets regularly—sometimes with NGOs, including Human Rights Watch—to discuss codes of conduct and implementation. Unfortunately, nearly all these companies are opposed to transparency in the monitoring process.

In 1996, Human Rights Watch met with corporate representatives from a range of companies to discuss issues of mutual interest. This included meetings with business groups and companies concerned with China to discuss our assessment of the deteriorating human rights situation there and the effect of arbitrary state action on both business and individual human rights. We also met with companies implicated as complicit in governmental human rights abuse to review their policies and press for institutional change.

Human Rights Watch/Middle East took a strong stand criticizing the role of British corporations in pressuring the British government to deport exiled Saudi dissident Dr. Muhammed al-Mas’ari, a spokesman for the Committee for the Defense of Legitimate Rights (CDLR). Human Rights Watch/Middle East wrote the chairs of the arms corporations Vickers and GKN, both British corporations, citing their reported part in the decision to expel Dr. al-Mas’ari in violation of British law. Vickers is a leading manufacturer of arms and weaponry and a large supplier to the Saudi military. Human Rights Watch/Middle East protested the company’s reducing al-Mas’ari’s right to an asylum hearing to the status of an obstacle to British business and the company’s business.

We also strengthened our cooperation with groups regularly working on these issues: shareholder activists, investment research groups, and progressive pension funds. Recognizing differences in orientation, Human Rights Watch shared its research findings with pension fund managers. We also brought Indonesian activists together with portfolio managers.

The Corporate Response
Some corporations displayed a flatly intransigent attitude to human rights criticism of their practices. Before and after the hanging of Ken Saro-Wiwa, Royal Dutch/Shell provided both increased financial investment and a diplomatic public relations shield for the Nigerian government. In newspaper advertisements Shell ran in Europe, the company blamed Saro-Wiwa’s execution on those protesting his unfair trial. Likewise, in response to criticisms of its practice of sex discrimination against women workers in its Mexican maquiladoras, the Zenith Corporation, now owned by the South Korean conglomerate Goldstar, acknowledged the use of the practice without apology. In a letter to our Women’s Rights Project, the company justified the discrimination—which is illegal under Mexican law—by citing the prevalence of pregnancy testing in “the local labor market.” In October, despite specific concerns over human rights and environmental issues surrounding the construction of the Three Gorges Dam, in China, the Swiss-Swedish company ABB, a major turbine manufacturer, requested risk guarantees from the Swiss government for the export of its equipment for the dam. The U.S.-based Caterpillar corporation mounted a fierce campaign against a White House-initiated recommendation to deny loan guarantees for U.S. companies involved with the dam. The burgeoning international movement on Burmese human rights drew varied corporate reactions: as noted above, some apparel manufacturers pulled out, as did Pepsi-Cola, while the oil giant, Unocal, remained indifferent to protests.

In October, two large British supermarket chains, Sainsbury and the Co-op, launched a six-month project to develop codes of conduct to improve conditions for workers making their own label products. The companies acknowledged that their interest was prompted by consumer concerns. The supermarkets promised to develop their codes based on a “Third World suppliers charter” initiated by the Fairtrade Foundation, an organization which is backed by Oxfam and Christian Aid.

In the U.S., the exposures generated spiraling media coverage, as activist groups targeted individual celebrities. Television personality Kathie Lee Gifford faced charges that the clothing line bearing her name and sold by the WalMart chain of stores was made by child labor working under appalling conditions at Global Fashions in Honduras. This was followed by complaints from immigrant garment workers at an illegal sweatshop in lower Manhattan, in New York City, that they had not been paid after producing garments for Gifford. Days later, in June, following the National Basketball Association finals, star Michael Jordan’s public image was tainted by reports that Air Jordan sneakers marketed by Nike had been produced by sweatshops in Indonesia. Following the wave of negative publicity against Kathie Lee Gifford and Nike, more businesses discussed corporate social responsibility for human rights. But for the growing sector of the corporate world expressing interest in human rights (still mainly in the consumer-sensitive apparel and footwear industries), it became clear in 1996 that more than the mere pronouncement of a corporate code of conduct was necessary. Local organizations and international groups, increasingly sophisticated in pressing for concrete results, began insisting on both practices specifically tailored to ending abuses and transparent and independent monitoring of their implementation. But even the “leadership” companies remained cool to independent monitoring of their human rights plans or practices.

For additional information regarding Corporations and Human Rights, please e-mail Arvind Ganesan at