8. Individual and Corporate Social Responsibility

Promote corporate social and environmental responsibility and accountability, while seeking a more socially and ecologically balanced way of life among Canadians

Your morning coffee was probably grown and picked by a farmer with a few hectares of land somewhere in Brazil, Africa, or Central America. But given the way the coffee trade is organized, he probably didn’t get a fair return for his work.

Small coffee farmers don’t have access to loans that would allow them to finance their harvest or buy trucks to market their beans. Instead, they are forced to depend on middlemen and local loansharks who buy and resell their harvest to large coffee trading corporations.

They have to accept whatever price these middlemen offer. Often, it’s not enough to live on.

The plight of Brazil’s smallest farmers is not of their choosing. It’s the result of the way transnational corporations choose to operate. Today, 500 of the largest transnational corporations control 70 per cent of world trade. Some are Canadian-based corporations that make international investments in order to produce the consumer goods we’ve come to expect.

Responsible corporations invest in ways that treat workers and producers fairly – and that neither pollute nor destroy the land. Corporations that refuse to be accountable for the social and environmental consequences of their actions create and perpetuate poverty.

The Brazilian coffee farmers, who aren’t paid a living wage, are forced to migrate to urban slums or to large land-owners’ plantations where they merely subsist.

Similarly, some of the largest clothes retailers in Canada and the United States sometimes rely on middlemen to supply designer clothing produced by poorly-paid workers under appalling conditions. There is also evidence of similar conditions for some homeworkers in Canada.

In tolerating such practices, corporations share responsibility for continuing poverty.

Yet when Prime Minister Chretien’s Team Canada visited Asia in early 1997 to promote Canadian economic links to the region, there was no talk of assessing the social and environmental impacts of Canadian trade and investment.

Filipino demonstrators, upset by the environmental destruction caused by Canadian mining companies, confronted the team. A few months earlier, 3.5 million tons of toxic waste from a mine owned then by Canadian-owned Placer Dome had spilled into local river systems and the Pacific Ocean. The health and livelihoods of more than 20,000 people from 27 local villages were affected.

It’s not easy for the Philippines government to protect the environment. The evolution of the global trade rules since the 1960s has eroded the ability of governments to control their own economies, to regulate transnational corporations, and to protect the public good. And no international regulatory bodies have been created to fill this void.

  • Governments have been rapidly deregulating their economies. Between 1991 and 1994, out of 374 major pieces of legislation introduced by national governments on corporate investments, 369 eliminated regulations.
  • The 350 largest corporations now account for 40% of global trade, and their turnover exceeds the GNP of many countries.

We who consume corporate products often fail to address our own role in the poverty-producing process. We should. After all, we in the industrial world use twice as much agricultural land, consume three times as much fresh water and 10 times the energy of someone in a developing country.

What’s Possible?

Canadians care about the business practices of the corporations they buy from. In a 1995 retail survey, 90 per cent of respondents said they’d willingly pay more for clothes produced under good working conditions.

Labour unions, religious organizations, and other groups have joined efforts
to change consumer patterns, exploitative trade practices and destructive investment activities. Public pressure is paying off.
For example:
  • Some clothing and shoe manufacturers have established voluntary codes of conduct for their subcontractors. These codes require them to pay employees the legal minimum wage, and prohibit child labour. Because monitoring is key, NGOs like Canada’s Development and Peace are pressuring companies such as Nike Inc. and Levi Strauss to submit their codes to independent monitoring by trained human rights auditors in the host country.
  • An international network of churches, social justice groups, unions, agricultural producers and alternative trading organizations has established the Transfair label in Canada. This label identifies fairly traded coffee, tea, sugar, cocoa and honey. It certifies that they were bought from democratically-organized farms and co-ops at prices that fairly reflect the value of the product and the work involved.
  • Export promoters, carpet industry representatives, NGOs, and UNICEF India have created a certification system to encourage carpet makers in India to pay their workers at least the minimum wage and to stop using child labour. To obtain the Rugmark label, factories must agree to a regular, unannounced, inspection.
  • Financial institutions have created new investment funds that select investment opportunities according to social and environmental criteria. To date, 15 such funds have been established, serving 90,000 investors and managing $2.2 billion in assets.

To date, most corporations behave only as if their major responsibility were to provide the best return possible to their shareholders. Gradually though, some corporations are becoming aware that they need to be responsible not only to shareholders, but to the wider community as well, a community of stakeholders of which we are all a part.

Ultimately, governments must insist that corporations be accountable for the consequences of their actions. Citizens and governments, together, can support businesses – and the women and men who work for them – that acknowledge the responsibility which goes with the power they hold.

The Canadian Taskforce on the Churches and Corporate Responsibility, a coalition of Canadian churches, is working with organizations in the United Kingdom and the U.S. It’s trying to implement a set of principles and benchmarks that would require corporations to be responsible – locally, nationally, and internationally.

In addition, organizations that monitor corporate activity are calling on governments to amend their laws and regulations to promote corporate responsibility. They want national laws, such as the Canada Business Corporations Act, to be amended to require businesses with offshore investments to enact a corporate code of conduct, to submit to independent auditors, and to report to their shareholders each year.

It’s in the interests of corporations to be responsible global citizens. High unemployment and the instability caused by a growing gap between rich and poor, as well as despoiled environments, threaten corporations as much as individuals.

Corporations play an increasingly significant role in all our lives. Socially and environmentally responsible corporations will enhance the quality of life for everyone.

Canadian Centre for International Co-operation Archives – Agenda 8