WTO Public Symposium 2003: Corporate Social Responsibility of Multinational Enterprises

Corporate Social Responsibility and the WTO

One goal of the Geneva conference will be to explore how the WTO can play a role in encouraging and enabling multinationals to utilize their global infrastructure for economic development and positive social change. An important question is whether the WTO should be in charge if an international system or corporate responsibility is implemented. Though the WTO has a global infrastructure and a dispute settlement system to aid with enforcement of international rules, does it have the resources to address this issue with so many potential ramifications. [1]

Background

Multinational corporations have the ability to create both positive and negative consequences in the countries where they do business. There is a growing public concern about the integrity of corporations operating in the global marketplace and expectations that they take responsibility for society at large In 2000, this prompted the OECD to adopt guidelines for multinational enterprises; they have since become important standards and useful ways of holding multinational corporations to a set of behavior standards. [2]. Though they are not legally binding, they have been useful in many situations. For example, they have helped persuade companies to withdraw from Burma, defend the rights of those who work for ocean shipping companies, and enabled many companies to implement their own programs in response to societal concerns about the economic, social and environmental impacts of their activities. [3] These codes of conduct pertain to legal requirements, business ethics, the environment and corruption among others.

The corporate codes are just part of a broader system of private and public governance.[4] The efforts undertaken by businesses in the area of legal and ethical compliance are closely linked to broader pressures from regulators, law enforcement authorities, and NGOs. These outside pressures have an enormous capacity to motivate these corporate responsibility initiatives and to increase their effectiveness. Global standards for implementation and resolutions of ethical and social concerns are remarkably less established than the global governance of the economic realm through the WTO, World Bank and IMF. However, an international system for governance of corporate social responsibility may be on the horizon. [5]

In the Context of Global Trade and Development

Ethical concerns have occupied a huge chunk of the dialogue about this topic. One of the most publicized corporate social responsibility initiatives is the campaign for Coke to provide help in the HIV/AIDS epidemic in Africa [6] . Its success, at least on paper, may provide the needed support to instigate similar corporate operations. For example, [who?] drafted a declaration that implored multinationals to take responsibility for alleviating caste related discrimination in India and elsewhere. [7] Some organizations believe that a company's responsibility to its employees extends to issues like health care and skill training. At the very least, the working conditions of employees in developing countries should be improved, but this may require more than voluntary codes of conduct. [8]

There has also been continued discussion about the development of widely accepted standards for business global conduct (both socially and otherwise). Many multinationals have not adopted corporate codes of conduct for social responsibility and this may be a better way of creating socially conscious business norms [9] Domestic rules are also often gain credibility when backed up by international standards. Additionally, accompanying the implementation of an expanded system of corporate responsibility would be the issue of measuring success; in a best case scenario this would be done by unbiased professional accounting measures.[10]

[1] A summary of the role of the WTO in relation to CSR

[3] Gordon, Kathryn "The OECD Guidelines for Multinational Enterprises", OECD

[4] Please see this short piece, for a description of what the author calls a “tapestry of action”

[5] The International Organization for Standardization has formed an advisory group to explore this possibility

[6] http://www.treat-your-workers.org/

[7] The Hindu, May 27, 2003, 1295 words, DALITS MOBILISING, Gail Omvedt

[8] Archon Fung's site on Social Responsibility and Labor Standards, Kennedy School of Government

[9] Ruggie, John, "Managing Corporate Social Responsibility", reprinted form The Financial Times

[10] Leduc, Laurent, "Measuring Social Responsibility", CA Magazine