corporate social responsibility (CSR)

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Ending the CSR Debate
By Bart Mongoven

The debate over the moral responsibilities of corporations to society has taken on a more solid form with the release of the first draft of the standard known as ISO-26000. When finished, the standard -- drafted by the International Organization for Standardization (ISO) -- can be used by corporations to determine (and prove) that they are acting in a socially responsible manner. The standard will not be published until 2008, and the current draft reportedly is in a highly unfinished form, with many significant questions still to be answered. Nonetheless, the release of the draft marks a turning point in the long-running debate.

The need for a standard on corporate social responsibility (CSR) is clear. Nongovernmental organizations, labor unions and international organizations like the United Nations not only are calling for multinational corporations based in the West to bring their global operations into line with the norms of advanced Western countries, but -- going a step further -- are coming to view these companies as instruments of cultural change. They see corporations as mechanisms through which to advance certain values in countries lacking the West's approach to civil rights and liberties.

With the completion even of this early ISO draft, the field of debate begins to change. Growing criticisms and the potential for litigation about corporate complicity in human rights abuses -- as well as ongoing debates over where corporations' responsibilities begin and end -- likely will cause corporations to flock to ISO-26000. After years of trying to find ways to show the public that they understand the concept of social responsibility -- but lacking both a guide and a way to measure progress -- multinationals will be able to use the standard as a set of ground rules to follow, and the public will have a benchmark against which to measure the companies' performance.

Over time, once the standard comes into effect, the debate over corporate social responsibility can be expected to grow more moderate; with a guiding standard in place, there will be far less drama in the debates, and activists who use questions about CSR as a strategy to effect social change will have an uphill struggle. Instead, corporations will face a new set of issues, relating to the root of their rights in society, that will usher in a more thoroughgoing debate about the power of corporations and how they are viewed by the public.

Explaining the Standard

ISO-26000 is designed as a guide to help businesses understand where their responsibilities to various stakeholders begin and end. The standard, long in demand by Western businesses, will provide a company with a system to ensure it is properly monitoring its social responsibility performance and that it has in place the relevant mechanisms to achieve its goals in this realm. Following the standard will not necessarily mean that a company is acting in a socially responsible manner, but it will make it easier to achieve these goals and for management and observers to know if the company is, or is not, meeting its social responsibility objectives.

Like the larger CSR debate to which it is a response, ISO-26000 will focus primarily on corporate operations. It will address the human rights, labor, environmental and community relations-related effects of corporate operations. It also will examine methods of ensuring social-responsibility goals associated with products, which is a relatively newer and less-established field of study (and one where significant work will have to be done in the next two years). The standards ISO-26000 will introduce will help to clarify lines of responsibility on all of these topics.

Few corporations would deny that they have a responsibility to live up to higher standards than those of certain countries in which they do business. Every multinational oil major, for example, maintains strong prohibitions against bribery; large manufacturers refuse to use child labor or to do business with suppliers that do.

At the same time, even those companies recognized as the most socially responsible chafe at an open-ended approach that places the burden on companies to change the culture where they operate. Google, which is dedicated to the motto "Don't Be Evil," nonetheless finds it sometimes cannot avoid being placed, for instance, between human rights campaigners and the Chinese government. Advocates of an international standard hope such a measure will present corporations with a globally accepted and recognized alpha and omega for corporate social responsibility.

Beyond these outcomes, corporations expect the push for standards to yield even more concrete benefits. Those supporting the ISO process perceive the standards as providing companies with the basis of a legal defense in the face of litigious critics. To cite perhaps the most obvious example, the growing use of the Alien Tort Claims Act (ATCA) in the United States -- which allows foreign nationals to sue corporations in U.S. courts for human rights violations committed in other countries -- unnerves corporate counsels, who cannot predict where ATCA will be used or how it will be interpreted in the future. By following the systems laid out in ISO-26000, a company will be better able to determine that it is not doing things that put it at risk of ATCA litigation, and also gives it the ability to show in court, if need be, the steps the company took to avoid committing human rights violations.

After CSR

When ISO-26000 is completed in 2008, the business world likely will flock to it. The document will be flexible. It will leave a place, for instance, for the emerging human rights standards being developed by the International Finance Committee (IFC) and for the conclusions that the U.N. special representative on business and human rights, John Ruggie, draws in his assessment of the human rights obligations of businesses -- whether that means the U.N. Norms for Business or (more likely) some new human rights code of conduct. ISO will give companies a guide for monitoring their adherence to these codes of conduct and other emerging codes and treaties.

Ultimately, the publication of the draft standard tells the world that the day is coming when CSR will be well understood and normalized. With that, the vagaries will be gone and the debates over what can reasonably be expected of a company will fade. This is not to say that the responsibilities of corporations to society no longer will be subject to debate, but for the most part, the issue will be discussed within the context of a series of established authorities -- ISO, the U.S. Securities and Exchange Commission, and perhaps the United Nations.

The publication of the ISO-26000 draft particularly tells the players at the extreme edges of the debate -- the most strident NGOs and the most recalcitrant corporations -- that, like it or not, CSR will be debated in a fairly staid, narrow band with terms defined by ISO and arbitrated by lawyers who are experts at splitting hairs.

Corporate Power and Rights

The long-term goals of the activists who have been most diligent in pushing corporations to act in a more socially responsibility manner echo those of the anti-globalization movement. These goals can be summarized as trying to reduce the effect of major corporations on the societies in which they operate, and to carve out space for communities to define themselves and their culture without the influence of financial interests (or companies, primarily).

With the current CSR debate drawing to a close, it is important to identify what is left: questions about corporate power and the cultural impact of corporations on society. From this, it seems likely that the outstanding business not addressed by CSR campaigning thus far concerns the social implications of corporations' products (and thus, the corporations' responsibilities) and the legal structure that gives corporations the power to change culture, domestically and globally.

At the core of this new debate will be -- not the question of the role or responsibilities of multinational corporations -- but rather a re-examination of the limitations society places on large corporations.

Central to this discussion will be the question of corporations' influence on political systems. These questions have persisted to some degree or another since the 1950s, but they have also been refined by changes in the economy and culture. In the United States, the central questions today revolve around the power of corporations to lobby government and to advertise.

At a fundamental level, the American public tends to view the right to speak and to lobby government as having been guaranteed to corporations by the First Amendment, but activists increasingly are inverting the question and asking whether the First Amendment -- or other parts of the Bill of Rights -- applies to corporations. The activists claim that only a series of Supreme Court decisions during America's so-called Gilded Age extended constitutional rights to corporations, and argue that the Bill of Rights applies only to people, not organizations. Thus, it follows that free speech (advertising) or addressing grievances with government (lobbying) are not inalienable rights for corporations. Out of this line of discussion rises a clamor for a "true democracy," "real democracy" or "participatory democracy" in which the public clearly and intentionally defines what rights corporations have and do not have.

Though the argument is based on tenuous historical reasoning -- and the mechanisms by which the public would define the rights of corporations are almost impossible to imagine -- the question of whether corporations have inalienable rights (or whether the people have the right to rescind or otherwise limit those rights) will resound soon after ISO's standard comes into effect in 2008.

The debate will take different forms in different countries. At the core, however, will remain the question of what power society gives to corporations, and what corporations owe to society in return.
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Hva nå Hydro, Statoil .....

Roger Larsen

ps. Det årsgamle fårekjøttet som spredte e-coli, hvor kom det fra montro? Fra noen av de 120 000 sauene som "forsvinner" på beite hvert år?