The five-step program for worker exploitation

>> Last September, 12 Canadian companies unveiled a voluntary "International Code of Ethics for Canadian Business." Is it possible that corporate Canada had an epiphany on social and environmental justice? The timing of the Code's release would certainly seem to indicate otherwise. The Code was the result of pressure to take action following heated criticism of Canadian corporate collaboration with the repressive Abacha régime in Nigeria. And with Canada hosting this year's leader's summit for the Council on Asia Pacific Economic Cooperation (APEC) in Vancouver two weeks from now, the Code also provides Canadian business with an articulate public relations response to the growing clamour over human rights abuses in China, Thailand and other Pacific Rim nations. In the following interview, international business ethics expert Craig Forcese, author of the upcoming Putting Conscience Into Commerce: Strategies for Making Human Rights Business as Usual, strips the gloss off this new Code of Ethics, explaining why it lacks teeth and how it may ultimately serve as nothing more than PR camouflage.

On the positive side, the International Code of Ethics for Canadian Business pledges companies to support and promote the protection of international human rights within businesses' sphere of influence and not to be complicit in human rights abuses. The companies also vowed to promote freedom of association and expression in the workplace and ensure consistency of firm practices with universally accepted labour issues on topics such as child labour.

On the negative side, the code does not articulate exactly which human rights standards, other than freedom of association and non-exploitation of child labour, will be met. Nor does it state precisely what each firm will do to guarantee these rights.

More critically, there are no provisions relating to implementation, let alone independent monitoring. The code does not detail exactly what steps companies will take to avoid being complicit in human rights abuses, nor provide any indication of how companies defined "complicity."

The Canadian government has lauded the Code as a positive first step. But it should be noted that the Code compares unfavourably with the No Sweat Agreement in the United States in terms of its detail, particularly with respect to application, and with other corporate codes--including that of Levi Strauss--in terms of investment in countries with abusive régimes. Further, business associations apparently have no plans to recommend the Code to their members and the Department of Foreign Affairs reportedly has expressed little interest in applying the code to the international operations of Crown corporations.

If you look at history, it would be consistent with past experience if this Code is an attempt to diffuse criticism of human rights violations. Take the example of South Africa in the 1980s. Companies really only moved to implement the Sullivan Principles [a code of conduct on business operations in the apartheid state] when they began taking heat from shareholders, consumers and governments. In 1985, President Reagan signed an executive order disallowing government export assistance to U.S. companies in South Africa that failed to abide by the Sullivan Principles. The very real prospect that the U.S. Congress would impose sanctions in '85 finally drove the U.S. Chamber of Commerce in South Africa to apply pressure on the Botha régime for the first time, imploring it "to abolish influx control, extend voting rights to blacks, and open a dialogue with all races and political movements."

Experience in the United States with recent corporate codes of conduct suggests the following pattern of business response to criticism regarding human rights violations:

* First, the company will usually deny any knowledge of human rights violations or deny that the violations are occurring.

* Second, as the campaign corroborates violations, the company may blame contractors or local government enforcers or the workers themselves.

* Third, the company may engage in damage control by taking the offensive and denouncing its critics, even going so far as to threaten defamation lawsuits.

* Fourth, the company may attempt to reassert its ethical bona fides by establishing and publicizing, through public relations firms, a code of conduct.

* Fifth, the company may seek to give the appearance of compliance and enforcement of the code of conduct by hiring auditing firms or sometimes high-profile monitors. It sometimes resorts to "divide and conquer" tactics by splitting the human rights community between those that support this sort of monitoring and those who insist on more systematic monitoring and enforcement.

My take: I think we may be at the third or fourth stage with this new code. Stay tuned for the fifth stage!

--from an interview with Gwen Schulman