The current era of corporate globaliza-tion has not altered the fundamentaln a tu re of the stru ggle for hu m a n

rights, but it has shifted its context and cre-a ted new opportu n i ties and ch a ll en ges forthe gl obal human ri ghts movem en t . Si n cethe early 1990s this movement, which usedto focus exclusively on the policies and prac-tices of nation-states, has begun examiningthe role of mu l ti n a ti onal corpora ti ons andi n tern a ti onal financial insti tuti ons in theprotection and promotion of human rights.

This arti cle de s c ri bes and eva lu a tes thedifferent strategies that have been employedby human rights nongovernmental organi-zations (NGOs) in attempting to influencethe behavior of multinational corporations(MNCs). Within the NGO world, there is abasic divide on tactics for dealing with cor-pora ti on s : E n ga gers try to draw corpora-ti ons into dialogue in order to persu adet h em by means of ethical and pru den ti a larguments to adopt voluntary codes of con-duct, while confronters believe that corpo-ra ti ons wi ll act on ly wh en their financialinterests are threatened,and therefore take am ore advers a rial stance tow a rd them . Th el a t ter approach is more in line with trad i-tional labor union strategies and tactics,andin fact is of ten motiva ted by a de s i re tomaintain solidari ty with union partn ers .Con f ron t a ti onal NGOs tend to em p l oym oral sti gm a ti z a ti on , or “naming ands h a m i n g,” as their pri m a ry tacti c , wh i l eNGOs that favor engagement offer dialogue

and limited forms of cooperation with will-ing MNCs.

THE NEW FOCUS ON MNCs

At least five factors have con tri buted tohuman rights NGOs’ interest in the businesssector:

• a perceived shift of power from nati on -states to MNCs and international financialinstitutions such as the World Bank and theInternational Monetary Fund;

• the lack of s ocial and envi ron m en t a lacco u n t a bi l i ty of MNCs under ex i s ti n gnational and international laws;

• the growing anti - corpora te - gl ob a l i z a ti onmovement;

• a con clu s i on on the part of l a r ge , i n tern a-tional human rights organizations that theyhave been too focused on traditional cate-gories of c ivil and po l i tical ri ghts wh i l en egl ecting econ om i c , s oc i a l , and cultu ra lrights; and

• a desire on the part of some people in theNGO world to enlist MNCs and bu s i n e s s

71

NGO Strategies for Promoting Corporate Social Responsibility

Morton Winston*

* An earlier version of this paper was presented at themeetings of the Comparative International Studies Sec-tion of the International Studies Association in Wash-ington, D.C., on August 29, 2000. The author gratefullyacknowledges comments and suggestions provided byChristian Barry, Simon Billenness, Geoffrey Chandler,G emma Crij n s , G eor ge Fry n a s , Arvind Ganesan,Rebecca Johnson, Joshua Karliner, and Scott Pegg. Thevi ews pre s en ted in this arti cle are solely those of t h eauthor acting in his private capacity as an independentscholar.

Rep i n ted from Et h i cs & In tern a tional Af f a i rs 1 6 ,n o. 2 .© 2002 by Ca rn egie Council on Ethics and In tern a ti onal Af f a i rs .

executives as allies and as potential levers forpromoting human rights globally.

Un do u btedly the most important factoris the perception that political and econom-ic power has shifted away from governmentsand tow a rd corpora ti on s , in parti c u l a rMNCs. In the developed industrial nationsof the Nort h , m a i n ly the Un i ted State s ,Ca n ad a , Eu rope , and Ja p a n , s t a te andn a ti onal govern m ents are of ten seen asdoing the bidding of t h eir major corpora-tions. Increasingly, they resemble plutocra-cies in wh i ch corpora ti ons con trol thepo l i tical agenda while also dom i n a ting themarketplace. In the South, large Northern-b a s ed MNCs of ten have more econ om i cpower than govern m en t s , and nom i n a llydem oc ra tic crony-capitalist oliga rchies con-ti nue to con trol access to most of the va lu a bl en a tu ral re s o u rces while maintaining powerover impoveri s h ed pop u l a ti ons by force .

Within NGOs,there is a widely held viewthat multinational corporations,already thedominant insti tuti ons in con tem pora rys oc i ety, a re increasing their influ en ce overthe economic, political, and cultural life ofhu m a n i ty while remaining almost com-pletely unaccountable to global civil society.The boards and chief executives who controlMNCs are not dem oc ra ti c a lly el ected , a n dt h eir del i bera ti ons are not tra n s p a ren t . Ifthey feel accountable to anyone,it is to mar-ket analysts and investors who, for the mostpart, wish simply to make a quick profit.

MNCs play an influ en tial role in majori n tern a ti onal financial and trade or ga n i z a-tions. One of the most significant events ofthe past dec ade was the form a ti on of t h eWorld Trade Organization (WTO) in 1995.The most remarkable feature of the WTO isits dispute - re s o luti on and en forcem en tpowers , and the ex tent to wh i ch its ru l e scould potentially deprive states of their abil-i ty to en force , pro tect , and fulfill hu m a n

ri gh t s . Some vi ew the aggre s s ive ef fort toprivilege the rights of investors, banks, andcorporations over the wishes of consumers,workers , and nati onal or su bn a ti onal gov-ernments and communities as a threat noton ly to human ri ghts implem en t a ti on , butalso to economic self-determination, devel-opment, transparency, and democracy itself.Under the terms of the WTO, governmentscan invo ke econ omic sancti ons aga i n s tother states that fail to protect the trade andintellectual property rights of corporations,but corporations are not in turn subject toa ny binding reg u l a ti on s , l et alone form a ls a n cti on s , for failu re to re s pect the hu m a nand labor ri ghts of the people who live inthose states.

In deed , t h ere are curren t ly no gen era llyaccepted international legal standards artic-u l a ting labor, envi ron m en t a l , or hu m a nri ghts obl i ga ti ons that are direct ly bi n d i n gon the opera ti ons or beh avi or of M N C s .1

The only standards that do exist are found inthe dom e s tic laws of s ome co u n tri e s , a n dt h ey va ry gre a t ly in terms of what theyrequire. By and large,these laws are not wellen forced . In co u n tries wh ere su ch laws doexist and are en forced , MNCs can easilyevade them by moving their capital, invest-m en t s , and produ cti on fac i l i ties to other

72 Morton Winston

1 In tern a ti onal law standards governing labor andhuman ri gh t s , su ch as the ILO Conven ti ons and theInternational Covenant on Economic, Social and Cul-tu ral Ri gh t s , h ave soverei gn states as their su bj ect s .There are only a handful of instances in which corpo-rations have been assigned the status of legal personal-i ties in intern a ti onal law. See Mu l ti n a ti o n a lCo rpo ra tions and Human Ri ghts ( Utrech t : Am n e s tyIn tern a ti on a l / Dutch Secti on and Pax Ch ri s ti , 1 9 9 8) ,ch a p. I I . For a more recent stu dy of the po ten tial foren force a ble intern a ti onal legal standards govern i n gM N C s , s ee “ Beyond Vo lu n t a ri s m : Human Ri ghts andthe Devel oping In tern a ti onal Legal Obl i ga ti ons ofCom p a n i e s,” In tern a tional Cou n cil on Human Ri gh t sPolicy(January 2002); ordering information is availableonline at www.ichrp.org.

co u n tries that have lower or non - en forcedstandards. Since developing countries com-pete with one another for forei gn inve s t-ment and hard currencies,MNC productionand capital mobility can lead to a “race to thebottom” in which states compete to provideMNCs with the least demanding regulatoryenvironment for business.2 The inaction ofgovernments has created a regulatory vacu-um. Social activists have seized this oppor-tu n i ty to place human ri gh t s , l a bor ri gh t s ,and gl obal envi ron m ental con cerns on theagenda of global business.

The popular dem on s tra ti ons aga i n s t“corpora te - l ed gl ob a l i z a ti on” that too kplace around the WTO meetings in Seattlein November 1999, and subsequent demon-strations against other multilateral econom-ic insti tuti ons in New York , Wa s h i n g ton ,Pra g u e , Q u ebec Ci ty, and Gen oa , provi deevi den ce of growing popular re s i s t a n ce toglobalization in its current form. This “anti-corpora te activi s m” has provi ded some ofthe impetus for a number of human rightsand envi ron m ental NGOs to becom ei nvo lved in deb a tes over gl obal econ om i c ,trade, and investment policies.

The recent growth of NGO interest inbusiness ref l ects an intere s ting twist onglobalization:the concerns of Northern andSouthern NGOs are beginning to converge.Large Northern human rights NGOs such asAm n e s ty In tern a ti onal and Human Ri gh t sWatch were founded in order to combat vio-l a ti ons of trad i ti onal civil and po l i ti c a lrights, such as abuses of freedom of expres-s i on , a rbi tra ry impri s on m en t , and unfairtri a l s . So ut h ern human ri ghts activists arem ore keen ly aw a re of the legacies of co l o-nialism and imperi a l i s m , and they tend tosee the most pressing human rights issues ineconomic and social rather than only in civiland political terms. For many years South-ern human rights activists have complained

that Nort h ern human ri ghts NGOs haveshown little interest in combating abuses ofeconomic, social, and cultural rights.3

Du ring the past dec ade at least som em em bers of the Nort h ern human ri gh t se s t a bl i s h m ent have found re a s on to agreewith this cri ti qu e . In its recent annu a lreports, Amnesty International has stressedthe indivi s i bi l i ty and interdepen den ce ofhuman rights and has highlighted their rela-tionship to globalization.4 In the past sever-al years Human Rights Watch has producedgroundbreaking reports dealing with topicssuch as child bonded labor, mistreatment ofm a q u i l a d o ra workers , and tra f f i cking inwom en and gi rl s . Both Am n e s ty In tern a-ti onal and Human Ri ghts Wa tch havereported on human rights violations linkedto the activities of major energy companiesin countries such as Nigeria, Burma, India,Colombia,and Sudan. There is now a grow-

N G O Strategies for Prom oting Corporate Social Respon s i bi l i ty 73

2 Th ere has been a lot wri t ten abo ut the so-call ed raceto the bo t tom . See espec i a lly Terry Co ll i n gs wort h , “AnE n force a ble Social Cl a u s e ,” Fo rei gn Policy in Fo c u s 3,n o. 28 ( O ctober 1 9 9 8) ; Debora Spar and David Yof fe ,“ Mu l ti n a ti onal Enterprises and the Pro s pects for Ju s-ti ce ,” Jou rnal of In tern a tional Af f a i rs 52 ( S pring 1 9 9 9) .See also the more ex ten ded tre a tm ent by Wi lliam H.Meyer on the qu e s ti on of wh et h er forei gn inve s tm en th elps or hu rts human ri ghts in devel oping co u n tri e sin his Human Ri ghts and In tern a tional Pol i tical Eco n o-my in T h i rd Wo rld Na tions: Mu l ti n a tional Co rpo ra-ti o n s , Fo rei gn Ai d , and Repre s s i o n (We s tport , Con n . :Praeger, 1 9 9 8) .3 This critique was persuasively voiced at a conferenceorganized by Henry J. Steiner of Harvard Law School in1990 that was attended by representatives of Northerni n tern a ti onal NGOs and several So ut h ern NGOs. SeeHenry J. Steiner,“Diverse Partners: Non-GovernmentalO r ga n i z a ti ons in the Human Ri ghts Movem en t . Th eReport of a Retreat of Human Ri ghts Activi s t s ,” Ha r-vard Law School Human Rights Program and HumanRights Internet (1991), p. 25.4 See Amnesty International Report 2001, especially theforeword by Pierre Sané, pp. 5-10. At its 25th Interna-ti onal Council Meeting in Dakar, Sen ega l , in Au g u s t2001, Amnesty revised its organizational statute so as toa ll ow it to undert a ke sign i fic a n t ly more re s e a rch andcampaigning on economic, social, and cultural rights.

ing sense within the human rights commu-n i ty that the major human ri ghts NGOsmust find ways of ef fectively ad d re s s i n ga buses of econ omic and social ri gh t s . Th erecent focus of m a ny human ri ghts NGOson the activi ties of MNCs in devel op i n gcountries has emerged as one way in whichthis demand is being met.

An o t h er important re a s on for manyhuman ri ghts NGOs’ i n c re a s ed focus onMNCs is a desire to find new allies. Humanrights NGOs have traditionally drawn mostof their membership and financial supportf rom the bet ter- edu c a ted , bet ter- travel ed ,m ore co s m opolitan segm ents of s oc i ety.Ma ny exec utives of MNCs fit this prof i l e ,and many bu s i n e s s people are pers on a llysupportive of NGO activities in a variety offields. Just as NGOs attempt to attract sup-port and ex pertise from other profe s s i on a lgroups, some within the NGO communitya re actively trying to enlist su pport frompeople in the business world. In some casesthere may be a role for business executives aspo ten tial agents of po l i tical influ en ce , fori n s t a n ce , by interceding with host govern-m ents to raise human ri ghts issu e s . Som eeven think that corporations themselves canbe used as levers for progressive social andecon omic ch a n ge , ra t h er than just bei n gen gines of prof i t .5 Several recent stu d i e shave cautiously suggested that multination-al corporations may have a constructive roleto play in con f l i ct preven ti on and con f l i ctre s o luti on in the worl d ’s tro u bl ed co u n-tries.6 A contrary view is also widely held.AsMaria Ottaway notes, during an earlier eraof globalization—empire building—chartercompanies played a major role in bringing“civilization” to the South.She warns againsta ll owing priva te corpora ti ons to com bi n etheir entrepreneurial activities with the roleof political and moral reformers.7 Likewise,not all NGOs bel i eve that MNCs can or

should function as agents for the promotionof human rights.

NGOs are diverse in terms of their mis-s i on s , s tra tegi e s , m et h od s , and or ga n i z a-tional forms,and the NGO world as a wholeis anarchic. Quite appropriately, there are anu m ber of d i s ti n g u i s h a ble vi ews anda pproaches within the NGO world abo utthe appropriate goals, strategies, and tacticsfor dealing with transnational corporations.

ENGAGING MNCs: THE

C O R P O R ATE SOCIAL

RESPONSIBILITY MOVEMENT

While MNCs do not gen era lly commit vi o l a-ti ons of trad i ti onal categories of c ivil andpo l i tical ri ghts (with some notorious excep-ti on s ) , t h ey are of ten indirect ly complicit insu ch abu s e s , and they are direct ly and ro u-ti n ely implicated in abuses of m a ny impor-tant social and econ omic ri gh t s . M N Cm a n a gers con trol em p l oym ent for mill i on sof people around the world and are in a po s i-ti on to influ en ce direct ly the en j oym ent ofthe labor ri ghts and econ omic ri ghts of t h ei rown em p l oyee s , and to influ en ce indirect lythose of the em p l oyees of t h eir su bcon trac-tors and su pp l i ers . Companies also haved i rect con trol over health and safety issues in

74 Morton Winston

5 Debora L.Spar, “The Spotlight and the Bottom Line,”Foreign Affairs77 (March/April 1998), pp. 7-12.6 Jane Nelson, The Business of Peace: The Private Sectoras a Partner in Conflict Prevention and Resolution(Lon-don : Pri n ce of Wales Business Le aders Foru m , 2 0 0 0) .See also Virginia Haufler, “Is There a Role for Businessin Conflict Management?” in Chester A. Crocker, FenOsler Hampson,and Pamela Aall, eds.,Turbulent Peace:The Chall en ges of Ma n a ging In tern a tional Co n f l i ct(Wa s h i n g ton , D. C . : Un i ted States In s ti tute of Pe ace ,2001), pp. 659-76.7 Ma rina Ot t aw ay, “ Relu ctant Mi s s i on a ri e s ,” Fo rei gnPolicy (July/August 2001), available online at w w w. for-ei gn po l i c y. com / i s su e _ ju lya u g _2 0 01/ o t t aw aypri n t . h tm l .

the work p l ace , worker com pen s a ti on , a n dri ghts to or ga n i ze and bargain co ll ectively.

Over the past several dec ades there hasbeen a gradual but ste ady evo luti on of t h ei dea that corpora ti ons have certain et h i c a lresponsibilities toward society. Prior to the1970s the dominant view was that the onlyre s pon s i bi l i ty of businesses is to incre a s eprofits for own ers and inve s tors . This is al egal obl i ga ti on on ly.8 In the 1 97 0s , in thewake of the Lockheed, ITT, Ford Pinto, ando t h er scandals, the vi ew that bu s i n e s s e smust not engage in bribery, fraud, or collu-sive practices, nor may they interfere in thepolitical affairs of host states, gained accept-ance. This led to passage of the Foreign Cor-rupt Practices Act in the United States, andto the first wave of attempts by the UN Eco-nomic and Social Council and other inter-n a ti onal or ga n i z a ti ons to reg u l a te MNCbeh avi or. In the 1 9 8 0s the corpora te soc i a lresponsibility (CSR) agenda was significant-ly broadened when, in the wake of Bhopal,Ex xon Va l d e z, and other high ly publ i c i zedenvironmental disasters, the NGO environ-m ental movem ent pre s s ed home the ide athat MNCs must also pro tect the envi ron-m en t , t hus furt h er expanding the noti onthat corpora ti ons have social re s pon s i bi l i-ties. From the early 1990s on, human rightsNGOs and other voices within civil societyh ave been calling upon corpora ti ons toaccept re s pon s i bi l i ty for prom o ting laborrights, human rights,environmental quality,and sustainable development.

The contemporary CSR movement aimsto persuade MNCs to adopt voluntary codesof con du ct and implem ent business prac-ti ces that incorpora te com m i tm ents torespect and protect labor rights and humanri ghts as well as the envi ron m en t . Th o s ewho favor the voluntary CSR approach talka bo ut companies paying atten ti on to the“triple bottom line”—the financial account,

the envi ron m ental acco u n t , and the soc i a laccount—and urge MNCs to embrace thesenew kinds of ethical responsibilities volun-tarily. The voluntary CSR approach is seenby its boosters as a practical response to thecurrent lack of MNC accountability, not asan alternative to government regulation orenforceable international legal standards.

At the present time, however, there is nou n iversal agreem ent as to ex act ly what thesocial and environmental responsibilities ofcorpora ti ons are . In the past dec ade therehas been a proliferation of voluntary codesand guidel i n e s , i n cluding the Global Su ll i-van Pri n c i p l e s , the Caux Pri n c i p l e s , t h eCeres Pri n c i p l e s , and others , as well asnu m erous com p a ny codes del i n e a ti n gs oc i a lly re s pon s i ble business practi ce s .9

Recen t ly, the UN Su bcom m i s s i on on theProtection and Promotion of Human Rightshas publ i s h ed a set of principles that maybecome the ben ch m a rk for arti c u l a ting acom preh en s ive and wi dely ack n owl ed geds et of ethical and legal obl i ga ti ons forM N C s .1 0 But none of these guidelines orcodes has yet received universal acceptance.

CONFRONTING MNCs:

ENACTING ENFORCEABLE

LEGAL STA N DARDS

The voluntary CSR approach is not the onlyNGO strategy. Another influential school of

N G O Strategies for Prom oting Corporate Social Respon s i bi l i ty 75

8 See Mi l ton Fri ed m a n , “The Social Re s pon s i bi l i ty ofBusiness Is to Increase Its Profits,”New York Times Mag-azine, September 13, 1970.9 For a comprehensive review of codes of conduct seeOliver F. Williams, ed., Global Codes of Conduct: An IdeaWhose Time Has Come (Notre Dame,Ind.: University ofNotre Dame Press, 2000).10 Proposed Draft Human Rights Code of Conduct forCompanies, U.N. Doc.E/CN.4/Sub.2/2000/XX (2001),ava i l a ble online at w w w1. u m n . edu/hu m a n rt s / l i n k s /principles11-18-2001.htm.

t h o u ght within the NGO world vi ewsMNCs as con s ti tuti on a lly unredeem a bl eand incapable of vo lu n t a ri ly acting in asocially responsible fashion; companies canon ly be made to be soc i a lly and envi ron-mentally accountable by means of econom-ic coerc i on or thro u gh binding lega lobligations. Those who take this view looktow a rd the devel opm ent of a mass soc i a lmovement that will compel governments toen act en force a ble intern a ti onal legal stan-d a rds (EILS) that wi ll make MNCs lega llyaccountable to global society. Private volun-tary CSR initiatives are viewed as exercises incorporate public relations and as poor sub-s ti tutes for stri ct legal reg u l a ti on . O f tenallied philosophically and strategically withu n i on s , NGO activists who take this vi ewm ay seek to su pport trad i ti onal unionor ganizing ef forts to win ri ghts and faircom pen s a ti on for workers worl dwi det h ro u gh co ll ective bargaining agreem en t swith free labor unions.

The strategic split between NGOs that seethemselves as primarily working for volun-t a ry CSR and those that favor movi n gimmediately to EILS creates some tensionswithin the NGO community, but the com-bi n a ti on of the two stra tegies has showni t s el f to be ef fective in at least some cases.Many NGOs see EILS as the ultimate goal,but believe that the widespread adoption ofvo lu n t a ry CSR standards by many largeMNCs is a nece s s a ry way stati on on theroute to that goal. NGOs following the vol-u n t a ry CSR approach bel i eve that wh i l eenforceable international legal standards forMNCs are de s i ra ble and in principle arepreferable to voluntary ones,in practice theya re not ach i eva ble in the pre s ent or nearf utu re . Ma ny in the NGO world share theview of Noam Chomsky, who told me:

You can force corpora ti ons to reform . Th ey

don’t care abo ut the argumen t s ; t h ey care

a bo ut the thre a t s . You know like Mon s a n to

s t a rted reforming wh en their stock started

going down . . . . It’s like dict a tors h i p s . You can

t h re a ten a dict a torship so that it becomes more

ben evo l ent . . . t h a t’s good for two re a s on s : for

one thing it helps peop l e , and that’s good , but

for another it is very edu c a ti on a l ; it tells yo u

just how far you can go. Ta ke , for instance ,

s l aveown ers . You can tell them to treat thei r

s l aves more nicely. But if you tell them they

h ave to give up their slave s ,t h en yo u’ve hit the

l i m i t . And it’s important to understand that

l i m i t . It’s the same with corpora ti on s .1 1

While some companies are now willing toaccept voluntarily their human rights,labor,and envi ron m ental re s pon s i bi l i ti e s , at thepre s ent time the limit that Ch om s ky talksa bo ut is re ach ed wh en one demands thatcompanies give up their freedom of actionand submit to enforceable legal standards.

Su pporters of the vo lu n t a ry CSRapproach generally believe that fear of pub-lic shaming wi ll con ti nue to work as aneffective means of moving more companiesto embrace voluntary CSR. They worry thatworking direct ly for EILS at this stage wi lllead to a corporate backlash that will under-mine ef forts to establish a cri tical mass ofCSR com p a n i e s . Ma ny NGOs also bel i evethat voluntary standards should not be seenas a substitute for enforceable internationall egal standard s , but as a com p l em ent tot h em , s i n ce any con ceiva ble futu re gl ob a len forcem ent sys tem would need to rely ingreat part on companies mon i toring andregulating their own behavior. In this view,voluntary CSR is not just a first step towardlegally enforceable standards,it is also a nec-essary component of any future global com-pliance regime.

Many NGOs believe that MNCs may nowbe som ewhat more wi lling to coopera te in

76 Morton Winston

11 Personal communication, April 18, 2000.

the development of international CSR stan-

dards. During the 1990s public criticism of

their labor practices,security arrangements,

and other human ri ghts practi ces in the

gl obal media em b a rra s s ed a nu m ber of

com p a n i e s . Some MNCs that have ex peri-

enced these kinds of crises have now begunto con s i der seri o u s ly the human ri gh t s

i m p l i c a ti ons of t h eir activi ties and have

established private voluntary codes of con-

du ct for overseas of fice s , su b s i d i a ri e s , su p-

p l i ers , and con tractors . These vo lu n t a ry

codes gen era lly deal with su ch issues ascom p l i a n ce with nati onal and local laws ;

n on d i s c ri m i n a ti on ; adequ a te wage level s ;

workplace safety and health; working hours

and overti m e ; f reedom of a s s oc i a ti on and

the right to organize trade unions; prohibi-

ti ons on child and forced labor; envi ron m en-

tal pro tecti on ; d i s s em i n a ti on of com p a nypo l i c i e s ; i m p l em en t a ti on of comp a ny po l i-

cies by su pervi s ors ; and pro tecti on for

employees who complain about breaches of

company policies. In addition,some associ-

ations of MNCs have developed joint stan-

d a rd s , for instance , the Fair Labor

As s oc i a ti on for the app a rel indu s try, a n dRugmark for handmade carpets.

But critics of the CSR approach see vol-

untary codes mainly as corporate propagan-

da and as means of avoiding stri ct

government regulation. This crucial differ-

ence in political analysis leads to further dif-feren ces among NGOs in terms of t h ei r

tactics in dealing with global corporations.

E VA LUATING STRAT E G I E S :

ENGAGEMENT OR

C O N F R O N TAT I O N ?

In practi ce , no NGO acts solely as an

en ga ger, n or do any act purely in a con-frontational mode; all utilize strategies that

f a ll along an en ga gem en t - con f ron t a ti on

spectrum. There are at least eight different

t actics that va rious NGOs have em p l oyed

with respect to different companies in order

to encourage them to accept social responsi-

bilities. Arranged in order from the least to

the most confrontational, they are:

• dialogue aimed at promoting the adoption

of vo lu n t a ry codes of con du ct—the pure

CSR approach• advoc acy of s ocial acco u n ting and inde-

pendent verification schemes• the filing of shareholder resolutions• doc u m en t a ti on of a buses and moral shaming• c a lls for boycotts of com p a ny produ cts or

divestment of stock• advocacy of selective purchasing laws• advoc acy of govern m en t - i m po s ed standard s• litigation seeking punitive damages

Most NGOs try to tailor the tactics to the

target based upon the specific characteristics

of the com p a ny ’s po s i ti on on corpora te

s ocial re s pon s i bi l i ty issu e s , but there are

clear ph i l o s ophical differen ces bet ween

those that favor dialogue and those on the

confrontational side of the spectrum.

E n gagem ent and Support

Al t h o u gh en ga gers , su ch as Am n e s ty In ter-

n a ti onal and Human Ri ghts Wa tch , a l s o

em p l oy nega tive publ i c i ty and sti gm a ti z a-

ti on of p a rticular com p a ny practi ces in som e

of t h eir report s , t h ey gen era lly try to avoi d

con f ron t a ti onal tactics and are more wi ll i n g

to en ter into dialogue with MNCs. E n ga gers

a t tem pt to use high - qu a l i ty re s e a rch , ra ti on-

al persu a s i on , and moral argumen t a ti on

with corpora te managers to get companies to

a gree vo lu n t a ri ly to insti tute human ri gh t s

principles in their codes of con du ct and to

i m p l em ent and mon i tor their com p l i a n ce .

This CSR stra tegy is based on the assu m p-

ti on that some corpora te managers wi ll

N G O Strategies for Prom oting Corporate Social Respon s i bi l i ty 77

re s pond to a com bi n a ti on of ethical and pru-den tial arguments as to why it is in thei rcom p a ny ’s best interest to em brace CSR.

Making the “business case” for hu m a nrights is a primary tactic of engagers. Therea re in fact a significant nu m ber of p u relyprudential reasons, based on solid businesscon s i dera ti on s , for companies to adoptgood human ri ghts policies and practi ce s .Am ong the kinds of pru den tial argumen t sthat can be advanced are that by embracingCSR, companies can enhance their compli-ance with local and international laws; ben-efit from bet ter con trol over their su pp lychains; protect their reputations and brandi m a ge s ; en h a n ce their ri s k - m a n a gem en ts tra tegi e s ; i n c rease em p l oyee produ ctivi ty,morale, and loyalty; reduce operating costs,enhance financial performance and increasestock value; and improve business relation-ships with external stakeholders generally.12

The ph i l o s ophical differen ces bet weenen ga gers and con f ron ters became evi den twh en the Un i ted Na ti ons ro ll ed out itsG l obal Com p act (GC). Sec ret a ry - G en era lKofi Annan launched the idea of a voluntarygl obal com p act on human ri gh t s , l a borri gh t s , and the envi ron m ent at the Davo sEconomic Forum in January 1999, where hewarned the gathered dignitaries of a popu-lar backlash against gl ob a l i z a ti on if it doe snot prom o te hu m a n , l a bor, and envi ron-mental rights and ifthe benefits of corporategl ob a l i z a ti on are not distri buted fairly.Unless people have confidence in the funda-m ental fairness of the gl obal econ omy, i t sl on g - term su s t a i n a bi l i ty wi ll be placed indoubt and its future prospects “will be frag-ile and vulnerable—vulnerable to a backlashfrom the ‘isms’ of our post-Cold War world:protectionism, populism, nationalism, eth-nic ch a uvi n i s m , f a n a ti c i s m , and terror-i s m .”13 On Ju ly 2 6, 2 0 0 0, Annan appe a redwith the CEOs of several dozen major cor-

pora ti ons that have com m i t ted their com-panies to the terms of the Global Compact.Also in atten d a n ce were repre s en t a tives ofs everal major intern a ti onal human ri gh t sor ga n i z a ti on s , i n cluding Am n e s ty In tern a-ti on a l , Human Ri ghts Wa tch , and theLawyers Committee for Human Rights.

Am n e s ty In tern a ti onal and Hu m a nRi ghts Wa tch , a l ong with several otherN G O s ,“ wel com ed ” the Global Com p act ini-ti a tive , but del i bera tely stopped short of for-m a lly en dorsing it, m a i n ly because of its lackof i n depen dent veri f i c a ti on and en force-m ent mech a n i s m s . Th ey saw affil i a ti on wi t hG l obal Com p act as a first step on the pathtow a rd gl obal corpora te social re s pon s i bi l i ty,ra t h er than the end of the journ ey.

At the same ti m e , a coa l i ti on of o t h erhuman ri ghts and envi ron m ental NGOs,including Corporate Watch, Institute of Pol-icy Stu d i e s , Green pe ace In tern a ti on a l , t h eTh i rd World In s ti tute and several others ,i s su ed a press release bl a s ting the GC asthreatening the mission and integrity of theU N . Jo s hua Ka rl i n er of Corpora te Wa tch ,for one, charged that the “Global Compactpartnership and the Guidelines for Cooper-ation do not ensure the integrity and inde-pen den ce of the Un i ted Na ti ons and all owbusiness entities with poor records to ‘blue-wash’ their image by wrapping themselves inthe flag of the United Nations.” 14

78 Morton Winston

1 2 See John Wei s er and Si m on Zade k , “Convers a ti on swith Di s bel i evers : Persu ading Companies to Ad d re s sSocial Challenges,” Ford Foundation, November 2000.13 See www. u n gl ob a l com p act . or g. The site contains afull list of the participants in the launch as well as thetext of the Global Compact.14 The term “blu ew a s h” is pre su m a bly a cogn a te of“greenwash,” which was coined by Jed Greer and KennyBruno in their book Gre enwash: The Re a l i ty Beh i n dCo rpo ra te Envi ro n m en t a l i s m( New York : Apex Pre s s ,1996),in which they developed the thesis that corpora-ti ons began coz ying up to envi ron m ental NGOs as apublic relations strategy designed to create the myth ofgood corporate citizenship.

The ch a r ges have tu rn ed out to beu n fo u n ded : Ni ke has not begun sti tching UNl ogos on its tennis shoe s ; p u blic op i n i on hasnot con clu ded that the UN has sold out to bi gbu s i n e s s ; and joining in the GC initi a tive hasnot tu rn ed out to be a “f ree ri de” for com p a-n i e s . At the same ti m e , s ome ch a n ges havebeen made in the terms of the GC since it wasl a u n ch ed . The main ch a n ge is that the com-panies that join the initi a tive are no lon gerc a ll ed “p a rtn ers” or even “s i gn a tori e s .” In ter-e s ted companies are asked to have a let ter sen tby their CEOs ex pressing their accept a n ce ofthe principles and their intent to put themi n to practi ce . Th ere is sti ll no indepen den tveri fic a ti on or mon i toring sys tem ; i n s te ad ,p a rti c i p a ting companies are asked to su bm i ta case stu dy every year detailing an activi ty ori n i ti a tive they have undert a ken to prom o teone or more of the nine principles that makeup the GC. The In tern a ti onal Labor Orga n i-z a ti on has set up a database on its Web site —the Business and Social In i ti a tive Database( BASI)—that lists top i c s , com p a n i e s , a n dNGOs and all ows users to search for report sby parti c i p a ting or ga n i z a ti on s .1 5 Ma ny morecom p a n i e s , i n cluding many from the So ut h ,h ave since joi n ed in the GC, and there arem ore than 1,0 0 0 or ga n i z a ti ons affil i a ted wi t hthe initi a tive . Its pop u l a ri ty rests on its bei n gan en try - l evel standard , one that is not toodem a n d i n g.

S ocial Au d i ting and Reporting

The social auditing approach holds that cor-porations cannot be trusted to self-monitortheir compliance with their own voluntarilyadopted ethical codes and argues that cor-porate social performance needs to be inde-pen den t ly audited on a regular basis bycredible outside auditors. Some of the mainNGOs taking this approach are the Fa i rL a bor As s oc i a ti on (FLA) and Soc i a l

Acco u n t a bi l i ty In tern a ti onal (SAI), wh i chhas devel oped a com preh en s ive and ri gor-o u s ly auditable social re s pon s i bi l i ty stan-d a rd for retail manu f actu ring bu s i n e s s e scalled SA8000.16

The FLA grew out of an initiative by Pres-i dent Cl i n ton in 1 9 9 6 c a ll ed the App a relIn du s try Pa rtn ership (AIP). Cre a ted inorder to address the problem of sweatshopl a bor practi ce s , A I P ’s ori ginal mem bers h i pincluded major U.S.apparel retailers such asLiz Claiborne, Nike, Reebok, Tweeds, Patag-on i a , and L. L . Be a n ; business assoc i a ti on ssu ch as Business for Social Re s pon s i bi l i ty;trade union organizations such as the Unionof Needl ework and In du s trial Tex ti l eE m p l oyees (UNITE); and NGOs inclu d i n gthe Lawyers Committee for Human Rights,the Interfaith Center on Corporate Respon-sibility, and the Robert F. Kennedy Memori-al Cen ter for Human Ri gh t s . This gro u pl a bored for several months and came upwith a code of conduct for workplace prac-tices and a set of principles for monitoringcom p l i a n ce .1 7 However, before they co u l dcon clu de their work on a standard , a splitopen ed up bet ween the corpora ti ons andsome NGOs and unions over the issue of thel iving wage ; in Novem ber 1 9 9 8 the app a relu n i on UNITE and several other labor andrel i gious or ga n i z a ti ons dropped out . Th eycomplained that the agreement granted cor-pora ti ons too mu ch con trol over the mon i-toring process and lacked strong provi s i on son the ri ght to or ga n i ze , and that the code didnot provi de for a living wage but on ly for “t h em i n i mum wage requ i red by law or the pre-vailing indu s try wage , wh i ch ever is higher.”

N G O Strategies for Prom oting Corporate Social Respon s i bi l i ty 79

1 5 BASI can be acce s s ed at oracl e02. i l o. or g / dy n / b a s i /vpisearch.first.16 Available online at www.sa-intl.org.1 7Ava i l a ble online at www. do l . gov / do l / e s a / p u bl i c /nosweat/partnership/report.htm.

UNITE went on to organize United StudentsAgainst Swe a t s h ops (USAS), a campus-b a s ed movem ent de s i gn ed to link stu den tactivists concerned about sweatshop condi-tions worldwide to the demands of the U.S.-b a s ed union s . Some of the labor- ori en tedNGOs supported UNITE and left the part-nership, but other human rights NGOs suchas the Law yers Com m i t tee and the RFKCenter stayed on, saying that they believedthat AIP had made significant progress, evenif the final agreement was not all they hadhoped for. The FLA has continued to devel-op its code and auditing practices, but it haspred i ct a bly con ti nu ed to draw cri ti c i s mf rom the trade unions and NGOs thatdropped out.18

SA8000 was developed in 1997 by a multi-sectoral advisory board consisting of expertsf rom trade union s , bu s i n e s s e s , and NGOs,along with several academics and represen-t a tives of acco u n ting firm s . Ba s ed on theprinciples of i n tern a ti onal human ri gh t sand ILO conven ti on s , S A8 0 0 0 covers ei gh te s s en tial work p l ace issu e s — child labor,forced labor, d i s c ri m i n a ti on , d i s c i p l i n e ,health and safety, working hours, compen-sation, and the right to free association andco ll ective barga i n i n g. A ninth el em ent onmanagement systems adds specific require-m ents for dem on s tra ting on going com p l i-a n ce with the ei ght norm a tive el em ents ofthe standard, thereby helping to ensure fulli n s ti tuti on a l i z a ti on of the com p a ny ’s com-mitment to the standard.

Social auditing in this sch eme works bymeans of a two - ti er sys tem in wh i ch SAItrains and acc redits auditors and auditi n gfirms in the SA8000 standard. Large brand-name ret a i l ers become sign a tories to thestandard and then require their subcontrac-tors’ and su pp l i ers’ f actories in devel op i n gco u n tries to be audited against it. If t h eauditors discover noncompliance problems

they give the factory managers warnings andsome time to correct them, return to rein-s pect , and if s a ti s f i ed can issue an SA8 0 0 0certification that is good for three years.

Unlike the FLA standard for the apparelindustry, SA8000 contains a provision con-cerning the payment of a “living wage,” andauditors are guided by a detailed set of spe-cific procedures and criteria in making theirinspections and issuing certificates of com-pliance for each supplier, not just for a sam-p l e . But both the FLA and SA8 0 0 0, i nkeeping with the social acco u n t a bi l i tyapproach, rely on companies to adopt theseethical guidelines vo lu n t a ri ly. Th ey alsoassume that large companies with complexsu pp ly chains cannot become soc i a llyresponsible overnight, and therefore set outa process by which companies that are will-ing to commit themselves to CSR can prac-ti ce con ti nuous improvem ent in this fiel dand be recognized for making demonstrableprogress, even if some problems remain insome supplier facilities.

S h a reh o l der Activi s m

A third approach that is com p a ti ble wi t hvo lu n t a ry CSR seeks to influ en ce corpora tepolicy by means of s h a reh o l der re s o luti on s .This tech n i que has been used su cce s s f u lly form ore than thirty ye a rs by the In terfaith Cen-ter on Corpora te Re s pon s i bi l i ty, wh i chm a i n ly repre s ents faith-based or ga n i z a ti on s’pen s i on funds in shareh o l der acti ons aga i n s tcom p a n i e s .1 9 Areas ad d re s s ed in su ch re s o lu-ti ons inclu de health and safety, tob acco,we a pon s , envi ron m en t , d i s c ri m i n a ti on ,l a bor and human ri ghts issu e s , and issues ofcorpora te govern a n ce . Si n ce large pen s i onfunds of ten hold large nu m bers of s h a res inm a ny major com p a n i e s ,t h ey can of ten exert

80 Morton Winston

18 See www.fairlabor.org.19 See www.iccr.org.

con s i dera ble econ omic as well as mora li n f lu en ce at annual shareh o l der meeti n gs .These kinds of re s o luti ons do not usu a llysu cceed in attracting a majori ty of vo te s , butt h ey do get the atten ti on of the boa rd ofd i rectors and top managers , who of ten en teri n to nego ti a ti ons with the spon s ors in orderto re s o lve the issu e s . S h a reh o l der activi s mm a kes use of the acco u n t a bi l i ty of corpora-ti ons to their inve s tors in order to wi den thes ph ere of corpora te acco u n t a bi l i ty to others t a keh o l ders , and is rega rded by a nu m ber ofNGOs as an ef fective way in wh i ch to influ-en ce corpora te policy and practi ce .

M oral Sti gm ati zati on and S h a m i n g

The most wi dely em p l oyed NGO tactic ism oral shaming and sti gm a ti z a ti on of cor-pora ti ons for bad beh avi or. Th ere is abu n-dant evi den ce that corpora ti ons ares en s i tive to su ch public cri ti c i s m , p a rti c u-l a rly wh en it links their brand name andcorpora te rep ut a ti on to unsavory envi ron-m ental and social practi ce s . The ack n owl-ed ged leader in the field of corpora tes ti gm a ti z a ti on is a Wa s h i n g ton - b a s edm on t h ly magazine fo u n ded by Ra l phNader call ed Mu l ti n a tional Mo n i to r, wh i che ach year publishes a list of the Ten Wors tCorpora ti on s .2 0 Corpora te Wa tch ,b a s ed inSan Fra n c i s co, produ ces a Web site thats pec i a l i zes in reporting corpora te mis-deed s , as does Global Exch a n ge .21 On theoppo s i te side of the fen ce , t h ere are nows everal publ i c a ti ons that spec i a l i ze in high-l i gh ting corpora te “best practi ce s” in thea reas of s ocial and envi ron m ental re s pon-s i bi l i ty. One of the leading publ i c a ti ons ofthis kind is the Lon don - b a s ed Ethical Per-fo rm a n ce Best Pra cti ce .2 2 The Fi n a n ci a lTi m e s , in assoc i a ti on with the Wa rwi ckBusiness Sch oo l , also of fers a series of

p a m ph l ets en ti t l ed Visions of Ethical Busi-n e s s that make the business case for CSR byh i gh l i gh ting the practi ces of the most CSR-f ri en dly com p a n i e s .2 3 Most NGOs avoi dpraising corpora ti ons for good beh avi oro ut of fear it wi ll undermine their own rep-ut a ti ons for indepen den ce , but vi rtu a lly allNGOs that are active in the field of C S Rem p l oy moral shaming to some ex ten t .

E con omic Pre s su re Tacti c s :B oycotts and Dive stm en t

A still more confrontational approach holdsthat corporations will not voluntarily accepttheir social responsibilities, but can be per-suaded to do so if they fear adverse effects onwhat they vi ew as their pri m a ry econ om i cm i s s i on , to retu rn a profit on inve s tm en t .Propon ents of econ omic pre s su re tacti c spoint to the successful boycotts against Nes-tle, Nike, Starbucks, and others as examplesof how consumer boycotts can be powerfullevers for influencing corporate behavior.24

Adoption of boycotts as a tactic is generallys een as moving an NGO from the en ga geri n to the con f ron ter camp. Com p a ny boy-cotts have been used ex ten s ively by laborunions and some NGOs, but not by groupssu ch as Am n e s ty In tern a ti onal or Hu m a nRi ghts Wa tch . E n ga gers gen era lly esch ewsuch tactics on the grounds that they oftenh a rm workers , t h ey are hard to start andstop, and they only work against companieswith large retail businesses and lots of con-

N G O Strategies for Prom oting Corporate Social Respon s i bi l i ty 81

20 Available online at www.essential.org.21 See www. corpw a tch . org and www. gl ob a l exch a n ge . or g.22 See www.ethicalperformance.com.23 See www.business-minds.com.24 For a comprehensive study of the Nestlé infant for-mula campaign,as well as a persuasive argument for aglobal regulatory approach,see Judith Richter, HoldingCorporations Accountable: Corporate Conduct,Interna-tional Codes, and Citizen Action (London: Zed Books,2001).

su m er ex po su re . Propon ents of boyco t t sand dive s tm ent campaigns argue that theyspeak in the only language that corporationsreally understand—money.

S el ective Purch asing Laws

A stron ger form of econ omic pre s su re isexerted thro u gh sel ective purchasing laws .An intere s ting example of this approach isthe 1996 Massachusetts Burma Law, a selec-tive purchasing law that pen a l i zed com p a-nies that continued to do business with therepressive regime in Myanmar by adding asu rch a r ge to con tracts with the Com m on-wealth of Ma s s achu s et t s . S h ort ly after theMa s s achu s etts law was en acted , the federa lgovern m ent en acted its own anti - Bu rm e s etrade sanctions. In 1998 the National ForeignTrade Council (NFTC), an umbrella grouprepre s en ting a coa l i ti on of corpora ti on s ,sued the Massachusetts secretary of admin-i s tra ti on and fin a n ce to bl ock the sel ectivepurchasing law, contending that it unconsti-tuti on a lly interfered with the federal for-ei gn - rel a ti ons powers , vi o l a ted the forei gncom m erce clause of the Con s ti tuti on thatgives Congress the right to regulate foreigncommerce, and was preempted by the laterfederal sancti ons on Mya n m a r. Su pporterslikened the Massachusetts law to those usedin the 1 9 8 0s to bring abo ut dive s tm ent ina p a rt h eid So uth Af ri c a , and argued thatcities and states have the right to base theirp u rchasing dec i s i ons on moral con s i dera-tions. But in 1998 the U.S. District Court inBo s ton backed the NFTC ’s argumen t s , a sdid the First Circuit Court of Appeals. Mass-achu s etts appe a l ed the case to the U. S .Supreme Court, hoping to clarify the limitson a state or local government’s authority todraw up its own procurement rules. Amicusbriefs were filed on behalf of Massachusettsby numerous NGOs and several other states’

a t torn eys gen era l , and some people in theNGO world were confident that the conser-va tive U. S . Su preme Co u rt would uph o l dthe states’ rights to determine their own pur-chasing policies.

But on June 1 9, 2 0 0 0, the U. S . Su prem eCourt issued a unanimous ruling upholdingthe Appeals Court ruling that struck downthe Massachusetts Burma Law. Justice DavidSouter, who wrote the Supreme Court opin-ion,argued that “the state law is at odds withthe president’s intended authority to speakfor the Un i ted States among the worl d ’sn a ti ons in devel oping a com preh en s ive ,multilateral strategy to bring democracy toand improve human rights practices and thequality of life in Burma,”and denied the par-allels with the divestment laws of the 1980s.25

This Supreme Court decision was a blow toNGOs and their all i e s . But the ruling wasn a rrowly drawn , s aying on ly that the U. S .federal sanctions preempted the Massachu-setts law. The Court did not rule on whethers t a te and local sel ective purchasing lawswere per se unconstitutional infringementson the federal govern m en t’s forei gn - po l i c ypowers or on the power of Congress to reg-ulate foreign trade. The ruling did not elim-i n a te the po s s i bi l i ty that states and loc a lgovern m ents could use their purch a s i n gpower to influence corporations on humanrights issues.

82 Morton Winston

25 See Si m on Bi ll en n e s s , “ Bu rma Law on Tri a l : Ca s eTh re a tens An ti - Ap a rt h eid Legac y,” Inve s ting for a Bet terWo rld ( April 1 9 9 9) , p. 1; U S A * E n ga ge , “Amicus Bri efsF i l ed in Su pport of the Na ti onal Forei gn Trade Co u n c i l ,”ava i l a ble online at w w w. u s aen ga ge . or g / b ack gro u n d /l awsu i t / Pro Am i c u s Bri efs . h tm l ; Pu blic Ci ti zen / G l ob a lTrade Wa tch ,“ Federal Appeals Co u rt Rules Against MABu rma Law ” (June 2 3, 1 9 9 9) , w w w. c i ti zen . or g / pctrade /bu rm a / u p d a te 2 . h tm ; ju d gm ent in the case of Na ti o n a lFo rei gn Trade Cou n cil v. Natsios and An d erso n, Un i tedS t a tes Su preme Co u rt , June 1 9, 2 0 0 0, ava i l a ble online atw w w. su prem eco u rtu s . gov.

G overn m en t - I m po s ed Sta n da rd s

A seventh tactic assumes that only nationalgovern m ents have su f f i c i ent power andauthority to force companies to adopt ethi-cal practices that protect human rights andthe environment.NGOs accepting this viewtend to focus their efforts on enacting legis-l a ti on at the nati onal or, prefera bly, t h einternational level, by imposing enforceablel egal obl i ga ti ons on MNCs. NGO activi s t swould like to see mu l ti l a teral trade andinvestment agreements such as NAFTA,andthe failed Multilateral Agreement on Invest-m en t , i n corpora te stri ct and en force a bl estandards on labor rights,human rights,andenvi ron m ental pro tecti on . But there areother legislative initiatives in the works.

In January 1999, the European Parliamentpassed a Resolution on Standards for Euro-pean Enterprises Opera ting in Devel op i n gCountries. The resolution calls on the Euro-pean Un i on to establish lega lly bi n d i n grequ i rem ents on Eu ropean companies toensure that these MNCs comply with inter-n a ti onal law rel a ting to the pro tecti on ofhuman rights and the environment. The res-o luti on proposes that Eu ropean MNCs bem on i tored by a panel com po s ed of i n de-pen dent ex perts and repre s en t a tives fromEu ropean bu s i n e s s e s , i n tern a ti onal tradeu n i on s , envi ron m ental and human ri gh t sN G O s , and the devel oping worl d . It alsoc a lls on the Eu ropean Com m i s s i on toen su re that MNCs acting on beh a l f of , orf i n a n ced by, the Eu ropean Un i on act inaccord a n ce with basic requ i rem ents forhuman ri ghts and envi ron m ental pro tec-ti on . However, this re s o luti on was nota pproved by the Com m i s s i on and did notbecome a law. In s te ad , in June 2 0 01 t h eCom m i s s i on issu ed a green paper on Pro-moting a European Framework for Corpo-

rate Social Responsibility, whose provisions,however, are not legally binding.

In the United States, the Corporate Codeof Conduct Act (H.R. 2782) has been intro-duced into the 107th Congress by Represen-tative Cynthia McKinney (D-GA). It wouldrequ i re all U. S . - b a s ed corpora ti ons thatemploy more than twenty persons in a for-eign country to implement a corporate codeof con du ct establishing a nu m ber of corehuman and labor rights standards specifiedin the bill, and would also require that thecode app ly to all of the com p a n i e s’ su b-s i d i a ri e s , su bcon tractors , a f f i l i a te s , j oi n tven tu re s , p a rtn ers , and licen cee s . A similarbill, H.R. 4596, failed to make it out of com-m i t tee du ring the 1 0 6th Con gre s s , and atpresent the chances of enactment of this orother comprehensive legislation along theselines are slim.

A more su ccessful legi s l a tive initi a tive isrepresented by the passage in late 2001 by theU.S. House of Representatives of H.R. 2722,the Clean Diamond Trade Act, by a vote of408 to 6. The Senate passed a similar piece ofl egi s l a ti on , and a pre s i den tial sign a tu re ine a rly 2 0 02 s eems likely. Al t h o u gh we a kerthan what NGO propon ents had wanted ,the bi ll passed by the House permits thepre s i dent to pro h i bit the import of ro u ghdiamonds into the United States from coun-tries that are not implem en ting veri f i a bl econtrols. The passage of this legislation rep-resents a victory for the 1998 Conflict Dia-mond campaign launched by a small humanri ghts NGO, G l obal Wi tn e s s , de s i gn ed tostop the trade in illicit diamonds that gaverise to grave human ri ghts vi o l a ti ons inAngola and Sierra Leone.26 De Beers and the

N G O Strategies for Prom oting Corporate Social Respon s i bi l i ty 83

26 See “Conflict Diamond Report,” available online atwww.one.world.org/globalwitness/reports/conflict.

world diamond industry became involved inthe nego ti a ting process at a rel a tively earlys t a ge , because diamond ret a i l ers wereunderstandably unhappy about having theirproducts associated with amputated limbs.

L i ti gati on

An ei ghth tactic being used against some cor-pora ti ons invo lves holding them acco u n t a bl ein U. S . co u rts for human ri ghts vi o l a ti on scom m i t ted by them or their business part-n ers . Examples of this advers a rial approacha re the suits against Un ocal for its role inBu rm a , a suit against Tex aco for its opera ti on sin Ecuador, and suits against Ch evron andS h ell for their all eged invo lvem ent in hu m a nri ghts abuses in Ni geri a .2 7 These suits areb a s ed upon the provi s i ons of the Al i en Cl a i m sTorts Act of 1 78 9 ( AC TA) that gives U. S . co u rt sju ri s d i cti on over torts cl a i m ed by alien sre su l ting from vi o l a ti ons of jus co gen s n orm sof i n tern a ti onal law su ch as pirac y, tortu re ,and slavery.

The most famous of these cases is Joh nDoe v. Unocal Co rpo ra ti o n, in wh i ch thep l a i n ti f fs , a group of Bu rmese ref u gee spresently residing in California,alleged thatUnocal is liable for torts committed againstt h em in con n ecti on with sec u ri ty opera-tions carried out by the Myanmar militar ydu ring the con s tru cti on of the Yadana oi land gas pipeline from Mya n m a r ’s easternTenasserim region to Thailand. Unocal is aj oint ven tu re partn er in this proj ect alon gwith the Fren ch oil com p a ny To t a l F i n a E l f ,the National Petroleum Company of Thai-land,and the military government of Myan-mar, known as the SLORC, or more recentlyas the SPDC . The plainti f fs , who areTen a s s erim vi ll a gers whose iden ti ties havebeen con ce a l ed in order to pro tect thei rfamilies from repri s a l , a ll eged that theMyanmar military forced them to leave their

villages under threat of violence and to workfor weeks at a time on the building of armyb a rracks and hel i p ads and cl e a ring road salong the proposed pipeline route. They alsoclaimed that they were subjected to numer-ous acts of violence in connection with thisforced labor and forced rel oc a ti on , i n clu d-ing violations of international human rightslaw such as torture, rape, and murder.

In March 1997 Judge Richard Paez of theU. S . Di s tri ct Co u rt of Ca l i fornia issu ed aruling that denied a motion by Unocal Cor-pora ti on to dismiss the su i t , finding thatUnocal could be sued by these plaintiffs inCalifornia under the ACTA.28 However, onAugust 31, 2000, Judge Ronald Lew rendereda dec i s i on gra n ting su m m a ry ju d gm ent infavor of Unocal, dismissing all of the plain-ti f f ’s cl a i m s .29 His dec i s i on found thatbecause Unocal had not “actively participat-ed ” in seeking to em p l oy forced or slavel a bor, it was not liable for the plainti f fs’injuries. The lawyers for the plaintiffs haverecently filed an appeal, but its prospects inthe appeals courts remain uncertain.

THE CORPORATE RESPONSE

The fact that there is su ch a wi de array ofs tra tegies and tactics ava i l a ble to NGOs isfitting in light of the range of company atti-

84 Morton Winston

2 7 See Morton Wi n s ton , “ John Doe vs . Un oc a l : t h eBoardroom/Courtroom Battles for Ethical Turf,”WholeEa rth Ma gazine ( Su m m er 1 9 9 9) , pp. 1 7-1 9; Eyal Pre s s ,“Texaco on Trial,” The Nation (May 31, 1999), online atwww.thenation.com. Also see Peter Waldman,“Niger-ian’s Suit Alleges Chevron Backed Attacks that ViolatedHuman Rights,” Wall Street Journal, May 28, 1999, p. B2.28 See Order granting in part and denying in part defen-dant Unocal’s motion to dismiss in case of Doe v. Uno-cal Corp., U.S. District Court for the Central District ofCalifornia, March 25, 1997, www.yale.edu/lawweb/aval-on/diana/unocal/31198-1.htm.29 Doe v. Unocal Corp., 110 F. Supp. 2d 1294 , August 31,2000.

tu des NGOs en co u n ter. Some major com-panies are en ga ged in figh ting the ideas ofsocial responsibility and environmental sus-tainability and cling to the classical view thatthe only social responsibility o f business isto make mon ey for inve s tors . Ot h ers areb a s i c a lly passive and have no con s i deredpo s i ti on on CSR issu e s . S ti ll others havebegun internal discussions abo ut CSR andhuman rights issues as they affect their busi-n e s s e s , and are moving cauti o u s ly in thed i recti on of em bracing gre a ter soc i a lresponsibility for their own operations andsu pp ly ch a i n s . In ad d i ti on , t h ere are a fewleading companies that have turned the cor-n er by form a lly and publ i cly accepting thevi ew that they should base their bu s i n e s spractices on international human rights andlabor standards,and adopting codes of con-duct or business principles that embody thiscommitment. Finally, a few companies havem ade serious attem pts to implem ent su chcom m i tm ents by edu c a ting their ownemployees,identifying and operationalizingperform a n ce ben ch m a rk s , com mu n i c a ti n gtheir standards to their suppliers and busi-ness partn ers , c a rrying out internal audits,and in some cases seeking ex ternal inde-pendent auditing to verify their social per-form a n ce to ex ternal stakeh o l ders . Wh a tprogress has been made on CSR thus far islargely the result of NGO activism.

On the po s i tive side one can see theengager/confronter split as an example of agood cop – b ad cop interroga ti onal stra tegyin which the confronters push MNCs to puthuman rights onto their agendas by meansof s ti gm a ti z a ti on and econ omic pre s su re ,while the engagers pull them further towardcorporate social responsibility by means ofethical and prudential reasoning. This com-bination of “push” and “pull”tactics appearsto have worked in several cases. Si n ce theconfronters make it their business to dig up

and publish embarrassing revelations, theirwork provides impetus for lagging compa-nies to move in the direction of greater CSR.

But it is also po s s i ble to vi ew the splitbet ween en ga gers and con f ron ters wi t h i nthe NGO community as the result of a delib-era te divi de - a n d - rule stra tegy by corpora-ti on s . To the ex tent that corpora ti ons cansuccessfully split the NGO community into“responsible” and “radical” groups,they canuse the difference as the basis for public rela-ti ons campaigns de s i gn ed to def l ect cri ti-cism of t h eir beh avi or. Jo s hua Ka rl i n erargues that many corpora ti ons now loo kf avora bly on partn erships with envi ron-m ental NGOs because “su ch partn ers h i p sare seen as part of a strategy to divide andcon qu er the envi ron m ental movem en t ,”since by co-opting the mainstream, moder-a te gro u p s , the corpora ti ons del egi ti m i zethe more radical and progressive elements ofthe movement.30 A similar strategy is beingused in the human rights field. At the 1997S h ell An nual Gen eral Meeti n g, s evera lgroups, including Friends of the Earth andthe Nigerian group MOSOP, were planningto stage dem on s tra ti ons in front of S h ell ’sh e ad qu a rters . But the com p a ny co u n teredby announcing the day before that it hadagreed with Amnesty International and PaxChristi to adopt human rights principles inits business code. This public relations ploym ay have all owed Shell tem pora ri ly todeflect criticism of its human rights recordin Nigeria, but did not prevent it from beingsued by relatives of Ken Saro-Wiwa.

In the short term, NGOs involved in thecorpora te social re s pon s i bi l i ty movem en tshould com bine sti gm a ti z a ti on and otherpressure tactics, such as shareholder resolu-

N G O Strategies for Prom oting Corporate Social Respon s i bi l i ty 85

3 0 Jo s hua Ka rl i n er, The Co rpo ra te Pl a n et: Ecol o gy andPolitics in the Age of Globalization (San Francisco: Sier-ra Club Books, 1997), pp. 189-90.

tions and boycotts, with parallel attempts toch a n ge corpora te thinking abo ut hu m a nri ghts by means of d i a l og u e , ra ti onal per-su a s i on , and the sharing of best practi ce s .The tactics em p l oyed should be ge a red tothe particular company being targeted, withthe more adversarial tactics reserved for thel a gga rds and the more coopera tive on e su s ed with the indu s try leaders . But NGOsmust not be seen as getting too close to cor-pora ti on s ; t h ey need to guard their inde-pen den ce so as to avoid being vi ewed bytheir primary activist constituencies as “din-ing with the devil.”This means,among othert h i n gs , that even for en ga gers , vo lu n t a rycom p a ny com m i tm ents to CSR pri n c i p l e sshould not be seen as buying com p a n i e si m mu n i ty from cri ti c i s m . However, f romthe point of view of the engagers, it is alsoi m portant to recogn i ze those com p a n i e sthat have tu rn ed the corn er on CSR, a n dtreat them differently from those that havenot. By rehearsing endlessly the past abusesand mistakes of companies like Shell , B P,Ni ke and others that have now em bracedCSR, confronters ensure that no good deedgoes unpunished . Con f ron t a ti onal tacti c scan easily become counterproductive.Whent h ey are not used skill f u lly they produ ce ab acklash within both the business and theNGO communities.

Con f ron t a ti on and public acc u s a ti on ared i s ti n ctively We s tern ways of beh aving anda re gen era lly rega rded as uncivil in manyAsian cultu re s , wh ere a high er va lue is placedon acting skill f u lly in interpers onal rel a ti on sso as to pre s erve rep ut a ti on and social har-m ony. Un fortu n a tely, the evi den ce so farsu ggests that ch a n ges in corpora te beh avi orrega rding envi ron m ental and social issu e sh ave been bro u ght abo ut mainly by means ofp u blic sti gm a ti z a ti on . Corpora ti ons re s pon dto damage to their rep ut a ti ons and bra n di m a ge , and to their bo t tom lines, not pri m a-

ri ly to moral persu a s i on . This gen eral con-clu s i on is amply su pported by recent devel-opm ents in a va ri ety of i n du s try sectors ,most notably the ph a rm aceutical indu s try,wh i ch bowed to public pre s su re to all owgen eric vers i ons of propri et a ry HIV/AIDSd ru gs to be made ava i l a ble to devel op i n gco u n tri e s . In the futu re , m ore com p a n i e sm ay seek to avoid the risks assoc i a ted wi t hsu ch nega tive publ i c i ty by adopting andi m p l em en ting a com preh en s ive hu m a nri ghts code of con du ct before they have beens po t l i gh ted and publ i cly shamed .

C O N C LU S I O N

NGOs cannot re a lly force corpora ti ons todo anything, and their attempts to influencecorporate behavior by means of any combi-nation of strategies and tactics are unlikelyto be successful in the long run unless theya re able to mobi l i ze two other import a n tcon s ti tu en c i e s : con su m ers and govern-m en t s . Recent studies of con su m er prefer-en ces have con s i s ten t ly found thatconsumers are motivated to avoid purchas-ing products that they know are being madeunder abusive labor conditions. However, asthe authors of one of these studies conclude:

“The implicati on is that firms can lose gre a t ly

f rom having their produ cts iden ti fied as bei n g

m ade under bad con d i ti ons but have on ly lim-

i ted space to raise pri ces for produ cts made

u n der good con d i ti ons—unless con su m ers see

com peting produ cts as made under bad con d i-

ti on s . The differen tial con su m er re s ponse to

i n form a ti on abo ut good and bad con d i ti on s

h elps explain…the beh avi or of activists and

firms in the market for standard s .”3 1

86 Morton Winston

3 1 Ki m berly Ann Ell1iott and Ri ch a rd B. Freem a n ,“Wh i te Hats or Don Quixo tes? Human Ri ghts Vi gi-lantes in the Global Economy,” National Bureau of Eco-n omic Re s e a rch (Ja nu a ry 2 0 01) , working paper 8 1 02,available online at www.nber.org/papers/w8102.

As long as the majori ty of con su m ersremain either ill informed or indifferent tothe labor and human ri ghts con d i ti on su n der wh i ch corpora ti ons produ ce thegoods they del iver to the marketp l ace , n oamount of NGO pre s su re is going to pro-duce sustainable reform.

In the last analysis it is the re s pon s i bi l i ty ofn a ti onal govern m ents to en act and en forcegl obal labor, human ri gh t s , and envi ron-m ental standards for mu l ti n a ti onal corpora-ti on s , and govern m ents must be persu adedthat they need to accept and act on thesere s pon s i bi l i ti e s . G overn m ents could andshould be doing a great deal more than theyc u rren t ly are , not on ly in the process of s t a n-d a rd set ting and nega tive reg u l a ti on , but alsoin providing tax and other reg u l a tory incen-tives that wi ll rew a rd corpora ti ons for goodbeh avi or. The NGO-led corpora te soc i a lre s pon s i bi l i ty movem ent must now move

the CSR agenda from vo lu n t a ry com p l i a n ceto “s oft law ”a pproach e s , and fin a lly to ri gor-ous nati onal and intern a ti onal en forcem en tregi m e s ; but it is unlikely to be able to do sounless it can mobi l i ze su pport for gre a tercorpora te social acco u n t a bi l i ty fromi n form ed con su m ers , con cern ed govern-m ent of fic i a l s , and progre s s ive com p a n i e s .

The stru ggle for envi ron m ental su s t a i n-ability and global social justice will continueto be waged on many fron t s . The curren tcorpora te social re s pon s i bi l i ty movem en tmay one day lead to the adoption of global-ly en force a ble legal standards that bi n dMNCs to their social and envi ron m en t a lre s pon s i bi l i ti e s . But for this to happen ,MNCs and NGOs will need to continue tol e a rn from their current en co u n ters andn ego ti a ti ons and coopera te in placing cor-porate social accountability on the politicalagenda of nation states.

N G O Strategies for Prom oting Corporate Social Respon s i bi l i ty 87