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Voluntary Codes of Conduct

The institutions noted above can at least call attention to governmental misbehavior, but multinational corporations have largely been left to police themselves, with occasional prodding from human rights and labor organizations. In recent years, progress has been made in increasing corporate attention to human rights, but more is needed.

Only several years ago, many corporations treated human rights as outside their legitimate concerns. They claimed their role was only to maximize profits for shareholders, that human rights concerns were best left to governments.

Today, after a series of exposés of corporate complicity in human rights abuse, the response is often quite different. Corporate leaders increasingly recognize that they must pay attention to human rights or risk consumer pressure, a tarnished corporate image, and problems with employee recruitment and morale. The 1997 Asian economic crisis provided other economic reasons to be sensitive to human rights. As a result, many corporations have adopted voluntary codes of conduct, pledging to abide by specified principles on human rights and other social concerns. These corporations include not only consumer-oriented companies in apparel, footwear, toys, and appliances but also major oil companies and other extraction industries.

These codes have been effective in changing some corporations' conduct, but they have shortcomings. They are typically written without consultation with the workers most affected, many of whom are not even aware of their company's code. They are usually written in vague language which looks good in corporate brochures but avoids some of the stickier human rights issues, such as how to do business in a country that bars labor unions, restricts the rights of women, guards company facilities with abusive soldiers, or uses joint-venture revenue to fundmilitary abuses. With notable exceptions, the codes generally give independent organizations no formal role in monitoring compliance. They commonly address only workplace issues and the conduct of subcontractors, not broader societal concerns.

And, of course, the codes are voluntary. They contain no enforcement mechanism, nothing to fill the institutional gap in rights protection. Indeed, that these codes are unenforceable is one of their principal allures for corporations and governments that lack a firm rights commitment. It is thus left to human rights groups, labor organizations, and others in civil society to expand the number of corporations adopting these codes, encourage compliance, and promote improvement. These efforts can be effective, but they are ad hoc, under-funded, and not enough.

The United Nations took a potentially useful step in July by launching a "Global Compact" of business, labor, and civil society to promote social responsibility in the global economy. Its reporting requirements, though minimal, may make member corporations more accountable for their conduct. Its breadth -- engaging companies based not only in Europe and North America but also in Africa, Asia, and South America -- demonstrates that the demand for corporate responsibility is not limited to companies from industrialized countries. This scope also helps to refute the argument sometimes heard from U.S. companies that they are put at a competitive disadvantage by being asked to bear the brunt of concern with corporate responsibility themselves. Still, the Global Compact is also only a voluntary endeavor. It attempts to back voluntarism with a degree of social pressure, but has shown no sign of moving toward mandatory compliance. Its failure to require probing public reports, independent monitoring, and an enforceable legal regime has left it short of its potential.

There is no single prescription for filling this enforcement gap, whether for governments or multinational corporations. Among the ideas advanced so far have been giving the ILO real enforcement powers; linking the ILO with the WTO, so that the ILO's more rights-oriented culture might join with the WTO's enforcement powers; or creating an intermediate institution that might be free of both the WTO's exclusive trade orientation and the ILO's paralyzing tripartite system. Movement in any of these directions would be useful, but they are not the only options or necessarily the most productive. Below we outline three other possible approaches, all drawn from recent governmental or institutional practices. None of these is a panacea either. Indeed, none standing alone can address all of the problems associated with globalization. But they illustrate the kinds of steps that must be taken if rights in the global economy are to move from exhortation to enforcement.


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Human Rights Watch World Report 2000

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  The Global Economy
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  From Voluntarism to
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