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Corporate Social Responsibility

By SARAH EFRONSON and TIFERET UNTERMAN[1]

Around the globe, corporations are fulfilling what have traditionally been government functions. For example, in some countries they provide infrastructure and utilities, and in all countries they influence government’s international policy agendas. In fact, 51 of the world’s 100 largest economies are corporations and 80 percent of world industrial output is produced by only 1,000 corporations. Because of their ever-increasing global power, corporations have become central players in international affairs and necessary partners in efforts to prevent genocide. As such, governments should implement policies that further motivate corporations in this arena.

One way to focus corporations on prevention efforts is through the lens of corporate social responsibility. Broadly, corporate social responsibility means that corporations should manage their businesses in a way that not only maximizes profits but also contributes to the resolution of environmental and social problems. Increasingly, corporations are recognizing a responsibility not just to shareholders, but also to other stakeholders such as customers, investors, governments, and local communities.

Many are familiar with the application of corporate social responsibility to the extraction or procurement of “conflict resources,” or to the protection of the environment in the midst of oil pipeline construction. Less explored is the application of corporate social responsibility to the specific task of genocide prevention.

The goal is for corporations to apply a genocide prevention lens to business practices. They can begin by recognizing that genocide is a process, not an event, with identifiable transitions from the point of societal stability to the point when atrocities occur. Genocide scholars Barbara Harff and Gregory Stanton offer the most widely accepted risk assessment and stages model that outline what the genocidal process often looks like. These approaches provide indicators of a potential genocide, or a genocide that is in its very early stages. Harff recognizes the following risk factors for genocide: prior genocide in the same polity, autocracy, ethnic minority rule, political upheaval during war or revolution, exclusionary ideology, closure of borders to international trade, and discrimination. Stanton establishes the following stages of genocide: classification of the targeted group, symbolization, dehumanization, preparation, polarization, organization, extermination, and denial. In addition to these risk factors, resource scarcity and conflict are also recognized as common precursors to genocide.

Corporate social responsibility has a role to play both in genocide intervention (after violence has started to occur) and prevention (prior to the outbreak of violence), the latter being preferable and most effective. To accomplish this task, corporations must aim to reverse the factors that can lead to genocide by:

  • expanding the openness of markets,
  • involving a multiplicity of stakeholders in the target country,
  • increasing power-sharing among a diversity of political and social groups,
  • helping to unify, rather than disenfranchise, different social groups,
  • encouraging a more inclusive ideology through marketing and drawing on a diverse subcontractor base, and
  • working to limit monopolies while encouraging increased international trade.

Governments can assist corporations by adopting policies and laws that encourage, if not compel, them to act in accordance with the above. This may be accomplished through combining a voluntary/incentive-based approach with a regulation-based approach.

The key to the voluntary/ incentive approach is to promote genocide prevention as a profitable venture for corporations. This approach has been successfully implemented with respect to environmental protection. In the movement to “go green,” corporations profited through brand differentiation by selling their product as environmentally-friendly and having more efficient operations while complying with environmental concerns. The focus on environmental protection has also brought smaller businesses and subcontractors worldwide into better compliance with the environmental goals and policies of their larger corporate purchasers. Similarly, governments should encourage corporations to use their genocide prevention activities as a brand differentiator and promote research and education into how corporations will profit from said efforts.

Regulations should also be adopted to foster corporate involvement in preventive measures. One approach is to mandate that companies participate in corporate social responsibility. Such a regulation has been adopted under Article 5 of the Chinese Company Law, which requires companies to “undertake social responsibility” in the course of business. Another approach is to require companies to give funds to corporate social responsibility. In India, there is a proposal under consideration that would require large corporations to allot a percentage of their profits toward socially responsible initiatives. A third approach is a disclosure regulation such as the United States Dodd-Frank financial reform law, which requires companies to publicly disclose their use of conflict minerals that originated in the Democratic Republic of Congo or an adjoining country. As a result, companies like Intel and Apple have created auditing programs and aid projects to help Congo develop a clean minerals trade and tracing projects to identify problems in their supply chains.

Government regulations could include mandatory auditing and disclosure of company activities that directly contribute to known factors that could lead to genocide, such as whether a corporation’s activities are involved with closing a country’s borders to international trade. Although an international scheme to regulate corporate activities would be best, individual national legislation often leads to international cooperation.

A successful example that demonstrates the combined use of the voluntary/ incentive approach and the regulation approach is the 1986 United States Comprehensive Anti-Apartheid Act, designed to undermine the apartheid regime then existent in South Africa while simultaneously bolstering interracial development. The Act prohibited future investments and trade in South Africa, leading to austere economic measures. At the same time, it encouraged procurement of goods from businesses that had more than 50 percent beneficial ownership by non-white South Africans and exempted the Export-Import Bank from a certification requirement to encourage it to export or import from such businesses. This law provided procurement incentives and stopped harmful corporate investments in apartheid. Furthermore, this Act also addressed ethnic minority rule — one of the aforementioned genocide risk factors.

Applying the corporate social responsibility concept to genocide prevention is a new idea. With very little written on the subject and very little data to understand trends, it is still a nascent concept. There are therefore many challenges to overcome, and questions that remain:

  • Oversight lapse: Self-reporting and voluntary fulfillment can lead to false claims and allows for corporations to appeal to consumers through branding as being socially responsible without meaningfully implementing genocide preventive measures.
  • Lack of education about genocide prevention: Corporate social responsibility as it relates to genocide prevention is a new concept and many corporations are unaware of its benefits. They may even foster genocidal conditions if they deem it to be economically beneficial.
  • No standard models to apply to genocide prevention efforts: Companies are more willing to adopt environmental and social policies and programs, since they have been previously modeled and can be replicated. But the novelty of corporate involvement in genocide prevention efforts means that new policies and programs need to be developed into replicable models.

In the international arena, states are no longer the only actor. Corporations have growing influence and are necessary partners with states in genocide prevention efforts. Corporate social responsibility has been successfully implemented in other fields and should be applied to genocide prevention as well. Governments have a vital role in incentivizing corporations to contribute to genocide prevention and should work to educate, regulate, and partner with corporations in genocide prevention efforts. Both governments and corporations should seize on this window of opportunity and cultivate positive steps to not just end genocide, but to stop it before the loss of life.

Image: industryplayer.com


[1] Sarah Efronson and Tiferet Unterman are law students participating in the Human Rights and Genocide Clinic at the Benjamin N. Cardozo School of Law in New York City. In this capacity, they were invited to present their research on corporate social responsibility and genocide prevention at the Auschwitz Institute for Peace and Reconciliation’s Raphael Lempkin Seminar for Genocide Prevention in Auschwitz, Poland in November 2012.

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By MARISSA GOLDFADEN

Minority Rights Group International (MRG) has just put out the 2012 edition of its flagship annual report, State of the World’s Minorities and Indigenous Peoples 2012. The publication “provides concrete evidence of how the generation of vast revenues from logging and dams, oil and mineral extraction, coastal tourism, fish farming, conservation parks and large-scale agriculture, is often at the expense of the rights of indigenous peoples and minorities.” MRG points out that while such threats are not new, it is the present extent of their severity and scale that is so alarming. This is the result of a combination of dwindling resources and greater technology which enables extraction of such resources in remote parts of the world, thereby affecting previously isolated minorities.

As is often noted in regards to Africa, natural resources are a double-edged sword—some of the most resource-rich regions throughout the world are home to some of the poorest minorities and indigenous peoples. Revenue streams from extraction are filtered out of these areas, while their inhabitants are left to deal with the consequences. The reason for this paradox of sorts is the fact that minorities and indigenous people are “more vulnerable to harmful natural resource development because their right to equality is not respected fully in society. Discrimination is one major root cause. This can lead to practices such as ‘environmental racism,’ whereby higher incidence of pollution or other environmental degradation is found” where marginalized groups reside. The report “sets out for the first time corporate responsibility in relation to minority rights, and provides evidence of companies’ ongoing disregard for minority and indigenous peoples’ rights (even when their Corporate Social Responsibility policies say otherwise).”

Such disparity is significantly worse for indigenous women, since their land rights and access are controlled by customary law; traditional territories are retained by communities, often with no legal title. As a result, entire communities are displaced in the name of conservation or development projects. Furthermore,

When communities are dispossessed of their land, women are often disproportionately affected because of their traditional role in procuringwater, fuel or trading goods for their families. . . . Women may also lack the education or information necessary to allow them to exercise formal legal rights. Overall, unequal access to land can limit the economic independence of indigenous women, making them more vulnerable to economic or social upheavals.

However, there have also been positive developments in this realm, especially pertaining to the status of ratification of major international and regional instruments relevant to minority and indigenous rights over the past five months. To view a comprehensive table, as well as more in-depth thematic essays and regional overviews, you can download the entire report at the link above.

Image: minorityrights.org

By MARISSA GOLDFADEN

Over the past month, JPMorgan Chase has come under fire for their now-publicized opposition to a shareholder proposal asking the company to avoid companies tied to genocide. Specifically, JPMorgan owns over a billion dollars worth of PetroChina, the publicly-traded arm of China National Petroleum Company, which has been widely recognized and condemned for helping finance genocide in Sudan. According to CNN, “Though JPMorgan’s investment in PetroChina is legal, citizen-led nonprofit Investors Against Genocide says it “works against the spirit” of the U.S. government’s economic sanctions on Sudan.” It also works against the UN Global Compact, “a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rightslabourenvironment and anti-corruption.” The principles which fall under the heading of human rights are: 1. Businesses should support and respect the protection of internationally proclaimed human rights; and 2. make sure they are not complicit in human rights abuses.

In addition to the Global Compact, which was launched in 2000, JPMorgan is also acting in violation of the UN “Protect, Respect and Remedy” Framework which was endorsed by the Human Rights Council in 2008 and “provides useful guidance on the scope of human rights responsibilities for both governments and companies. Following an extension of his mandate to provide guidance on the operationalisation of the Framework, [Special Representative John Ruggie] issued the “Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework” which the Human Rights Council endorsed in June 2011.” The Framework is based on three pillars:

  1. The State duty to protect against human rights violations by third parties, including business.
  2. The corporate responsibility to respect human rights.
  3. Access to remedies.
Last year, less than 8% of JPMorgan shareholders voted in support of Investors Against Genocide’s proposal. This year’s outcome won’t be revealed until JPMorgan’s shareholder meeting next Tuesday.
Further reading

Photo: moneychangesthings.blogspot.com

Stopping Third-Party Enablers of Mass Atrocities

Last week, Human Rights First published a briefing paper titled “Disrupting the Supply Chain for Mass Atrocities.” The paper discusses the role played by third-party governments, companies, and individuals in supporting the perpetrators of mass atrocities, and offers recommendations to target and stop those enablers.

The briefing comes in the wake of an interagency meeting coordinated by David Pressman—the National Security Staff’s Director of War Crimes, Atrocities, and Civilian Protection—to organize atrocities-prevention initiatives throughout the government, and identifies the roles each agency or department can play in the U.S. government’s efforts to deter enablers and prevent mass atrocities.

The paper notes that perpetrators of mass atrocities rarely have all the goods and services they need to carry out their plans of extermination, which means they must rely on outside supplies, especially of weapons, money, and fuel. While the perpetrators themselves may be isolated from the international community and therefore immune to outside pressure, third-party governments or commercial entities are often vulnerable to political and economic arm-twisting by other governments and multilateral institutions. Thus, inducing third-party actors not to support those who commit mass atrocities can do much to prevent atrocities, and a coordinated, whole-of-government approach can be very effective in accomplishing those goals.

The briefing urges the National Security Staff to provide leadership in coordinating the various agencies and departments to prevent mass atrocities by heading a robust interagency structure. Such a structure would pull together the initiatives pursued by each department into a comprehensive set of policies.

These are Human Rights First’s main recommendations:

  • The intelligence community should collect information not just on the perpetrators of mass atrocities, but also on the enablers, their roles, supply chains, and other relevant information. Such information may also shed light on other national security challenges like terrorism financing as well.
  • The Department of the Treasury should disrupt enablers by imposing sanctions and seizing assets of anyone who supports perpetrators of mass atrocities. While unilateral sanctions by the United States have been well enforced, UN sanctions need to be better enforced and more effective.
  • The Department of State can apply political pressure on enabling states through bilateral and multilateral diplomacy, and embassies can play an important role in intelligence gathering. Formalizing the different State Department working groups on genocide prevention and clarifying their relationships to the National Security Staff will make the State Department’s efforts to defuse escalating atrocities more effective.
  • The Department of Defense would continue developing its Mass Atrocities Prevention and Response Operations (MAPRO) project and collect and disseminate useful intelligence.

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