The Future of Corporate Social Responsibility?
At first glance, it may seem like a good and not-too-controversial idea: try to make the world a better place by adopting a voluntary international standard of corporate social responsibility. In fact, some important organizations have already begun embracing this concept. But moving toward global corporate standards of ethics will not be without controversy and perhaps even conflict, especially in the area of workers' rights.
There is no doubt that some companies are feeling pressured to address the issue of social responsibility. Business Ethics magazine reports, "When scandals about sweatshops erupted seemingly out of nowhere in 1995, allegations of filthy, unsafe, near-slavery working conditions hit everyone from Disney to Wal-Mart and the Gap." Suddenly, businesses were wondering how they could monitor far-off suppliers for labor rights violations.
In response to such issues, a number of standards have arisen in recent years, in both the U.S. and Europe. Among the most ambitious standard-setting projects is a code of conduct called SA8000, an attempt to create the same sort of standard for social responsibility that IS0 9000 has become for quality. The SA8000 (SA for social accountability) was created by an affiliate of the U.S.-based Council on Economic Priorities, a corporate responsibility research institute. The non-governmental organization, CEP Accreditation Agency, oversees and administers the SA8000 system.
The voluntary code of conduct requires firms to adopt policies that sometimes exceed national legal requirements, including some in the U.S. For example, the code makes overtime work voluntary, requires employers to pay a living wage, and prohibits discrimination on grounds that aren't covered by U.S. law (such as social status, political views, and sexual orientation). Among the organizations reportedly working toward SA8000 certification are OTTO-Versand, Eileen Fisher, We Europe, Coop Italia and Sainburys. It has also been reported that U.S.-based Avon and Toys-R-Us have made statements of intent that they will require their suppliers to become SA8000-certified.
But not everyone thinks these codes are a good idea. An article in HR Magazine quotes Howard Knicely, executive vice-president of HR and communications with TRW in Cleveland. He stated, "The thing to do is encourage compliance with existing guidelines. I don't feel there is a need to add other non-governmental organizations and layers of review." Some also suspect political motives behind some of the voluntary standards.
The recent mass protests of the World Trade Organization's Seattle trade summit showed how heated discussions about standards can become. In Seattle, many demonstrators on the streets were championing labor-rights causes, but many WTO participants wanted to avoid talk about labor standards. Reporting on the Seattle talks, Time.com noted that labor standards "may appear to be an obviously good idea, but Third World countries are in rebellion against any attempt to enforce them -- for the simple reason that cheap labor is all many of them have to offer in the world economy, and enforcing minimum standards may actually destroy hundreds of thousands of jobs in the developing world."
For now, it appears that voluntary standards are most likely to originate in developed nations. If they catch on with some highly influential firms, a growing number of other companies may feel pressured to adopt them. Assuming they become more widespread, it raises the question of what happens when firms develop intimate links with suppliers and partners located in developing nations. Will there be value-related conflicts? Will such conflicts impede profitable business among well-intentioned firms, or will they push more companies in developing nations to adopt SA8000-like standards? No one yet has the answers, but the trend toward the development of voluntary codes is worth watching closely because it may portend significant social, business and labor changes in the future.
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For more information on SA8000, see http://www.cepaa.org/
HR Magazine's "Social Accountability 8000" article can be found in the June 1999 edition.
There is no doubt that some companies are feeling pressured to address the issue of social responsibility. Business Ethics magazine reports, "When scandals about sweatshops erupted seemingly out of nowhere in 1995, allegations of filthy, unsafe, near-slavery working conditions hit everyone from Disney to Wal-Mart and the Gap." Suddenly, businesses were wondering how they could monitor far-off suppliers for labor rights violations.
In response to such issues, a number of standards have arisen in recent years, in both the U.S. and Europe. Among the most ambitious standard-setting projects is a code of conduct called SA8000, an attempt to create the same sort of standard for social responsibility that IS0 9000 has become for quality. The SA8000 (SA for social accountability) was created by an affiliate of the U.S.-based Council on Economic Priorities, a corporate responsibility research institute. The non-governmental organization, CEP Accreditation Agency, oversees and administers the SA8000 system.
The voluntary code of conduct requires firms to adopt policies that sometimes exceed national legal requirements, including some in the U.S. For example, the code makes overtime work voluntary, requires employers to pay a living wage, and prohibits discrimination on grounds that aren't covered by U.S. law (such as social status, political views, and sexual orientation). Among the organizations reportedly working toward SA8000 certification are OTTO-Versand, Eileen Fisher, We Europe, Coop Italia and Sainburys. It has also been reported that U.S.-based Avon and Toys-R-Us have made statements of intent that they will require their suppliers to become SA8000-certified.
But not everyone thinks these codes are a good idea. An article in HR Magazine quotes Howard Knicely, executive vice-president of HR and communications with TRW in Cleveland. He stated, "The thing to do is encourage compliance with existing guidelines. I don't feel there is a need to add other non-governmental organizations and layers of review." Some also suspect political motives behind some of the voluntary standards.
The recent mass protests of the World Trade Organization's Seattle trade summit showed how heated discussions about standards can become. In Seattle, many demonstrators on the streets were championing labor-rights causes, but many WTO participants wanted to avoid talk about labor standards. Reporting on the Seattle talks, Time.com noted that labor standards "may appear to be an obviously good idea, but Third World countries are in rebellion against any attempt to enforce them -- for the simple reason that cheap labor is all many of them have to offer in the world economy, and enforcing minimum standards may actually destroy hundreds of thousands of jobs in the developing world."
For now, it appears that voluntary standards are most likely to originate in developed nations. If they catch on with some highly influential firms, a growing number of other companies may feel pressured to adopt them. Assuming they become more widespread, it raises the question of what happens when firms develop intimate links with suppliers and partners located in developing nations. Will there be value-related conflicts? Will such conflicts impede profitable business among well-intentioned firms, or will they push more companies in developing nations to adopt SA8000-like standards? No one yet has the answers, but the trend toward the development of voluntary codes is worth watching closely because it may portend significant social, business and labor changes in the future.
====================================================
For more information on SA8000, see http://www.cepaa.org/
HR Magazine's "Social Accountability 8000" article can be found in the June 1999 edition.