Abuses committed and caused by multi-national corporations
In this section, I intend to discuss the human rights abuses that are being committed and willfully ignored by transnational corporations in the world today. There are several different kinds of abuse going on, and where the corporations are not directly responsible, they often turn a blind eye or actively decline to prevent them.
The perpetrators and perpetuators of these human rights abuses in the Third World range from pharmaceutical companies, to clothes manufacturers, to the biggest companies supplying fossil fuels, among others. The abuses they commit or ignore vary as widely as the nature of the corporations themselves.
Many companies that produce clothes and shoes, as well as other items that do not require particular skill for their manu-facture, such as baseballs and footballs, openly use sweatshop labour in their Third World factories. The workers in such places often suffer conditions that would be unacceptable in the Western world. Many of them are children below the con-ventional age of employment. They are not provided with adequate protection from the dangerous machines they use in the course of their work. And they are paid as little as their employers can get away with: it was reported in 1996 that Haitian workers "making Mickey Mouse and Pocahontas pyjamas for Disney [were] paid eight pence an hour" . These people are among the poorest in the world. They simply cannot afford to object to their conditions and risk losing their jobs altogether, however bad things are for them.
Several of the major drugs and food companies are also known to have committed or condoned human rights violations. There are rumours that Nigerian children were used as a test group for unapproved medicines, without their parents' knowl-edge or agreement. One of the most appalling violations of human rights is being committed by such companies as Big Pharma, who make a practice of vastly overcharging for AIDS drugs in Africa, and attempting to have anyone who charges more reasonable prices put out of business. The biggest pharmaceutical corporations have become so influential that World Trade Organization rules even go so far as to forbid South Africa to buy AIDS drugs in the least expensive markets. This has led to allegations that "Britain and other European Union countries are more interested in protecting the profits of their own drug companies than reducing the suffering of 35 million people infected with the human immunodeficiency virus (HIV) in the Third World". This makes it extremely difficult for human rights activists to do anything about the violations being committed by these extremely powerful multinationals, since they have the backing of Western governments, and implicit permission to carry on as they are. The abuses committed by the largest transnational food companies will be dis-cussed more fully in the section of this essay devoted to a case study of the Nestle Corporation.
It is also claimed that Shell and Unocal, among others, are complicit in "such offences as torture, forced relocation of in-digenous persons and forced labour of civilians in Nigeria and Burma respectively" . It is not necessarily the case that the corporations commit such offences themselves, but they are often "all too willing to form partnerships with some of the world's most repressive regimes to exploit" the untapped natural resources they need. For example, Unocal's extraction of natural gas in Burma had the support of that country's military, who, to facilitate the working of the project, "committed egregious abuses on a mass scale, including forced labor, torture, murder and rape" . Evidence put before a court in Los Angeles investigating these allegations indicates that:
before joining the Project, Unocal knew that the [Burmese] military had a record of committing human rights abuses; that the Project hired the military to provide security for the Project, a military that forced villagers to work and entire villages to relocate for the benefit of the Project; that the military, while forcing villagers to work and relocate, committed numerous acts of violence; and that Unocal knew or should have known that the military did commit, was committing and would continue to commit these tortious acts.
This is by no means the only instance of multinational corporations turning a blind eye to abuses of human rights, which they should really be trying to stamp out. The actions of "multinationals operating in conjunction with governments in de-veloping countries have on too many occasions caused massive degradation to the environments upon which local people depend for subsistence" , thereby leaving them no alternative but to relocate or die.
So therefore, when the multi-national corporations do not directly commit the human rights violations in question them-selves, a clear case can be made that they are nevertheless responsible for them. In the case of sweatshops, the corporations cause the abuses by not insisting that their contractors implement and maintain a certain standard of safety in the workplace, and by failing to set a minimum wage for their workers. In other cases, the responsibility lies with them simply by virtue of the fact that they do not insist that the governments of their host countries keep to their obligation to observe the human rights of their people.
The reason why they do not do all this, of course, comes down to greed, although they would probably call it good business sense. In all cases, in one way or another, letting the aforementioned human rights violations go by unchallenged saves the corporations money - either in terms of salaries and safety expenses, or because they have struck deals with the govern-ments of their host countries. The violations committed and ignored by the drug and food companies have a slightly differ-ent motivation - people who live in the world's poorest countries often have no alternative but to take what the companies supply to them, since there is nothing else - but it still comes down to greed. Such partnerships with governments win them tax breaks, or other advantages, as long as they do not raise objections to the government's human rights record - and some-times their presence itself causes human rights violations that would not otherwise have happened, as in Burma.
The Case of Nike
Most of the human rights abuses committed or condoned by the sportswear company Nike have to do with the conditions suffered by their workers in the Third World. For example, many of their Indonesian factory employees "get about 4 per-cent of the retail price of the shoes they make, which is not enough to buy the laces" . In a country with vast unemploy-ment, these people take the jobs they can get, and consider themselves lucky to have them, despite the appalling conditions.
In 1997, the company's Vietnamese workers, who are mostly female, had finally had enough and orchestrated "a series of rolling strikes" , as well as demonstrations outside the factories. The workers' rights pressure group Vietnam Labour Watch looked into this and discovered that the workers were being paid approximately 20 American cents an hour, on average, and were also being subjected to terrible treatment by their supervisors. To quote the investigator who drew up Vietnam Labour Watch's report:
Supervisors humiliate women. They force them to kneel, to stand in the hot sun, treating them like recruits in a boot camp. In one plant, workers were allowed to go to the lavatory only once during a shift and were limited to two drinks of water. The Taiwanese sub-contractor forced fifty-six women to run around the plant in the sun as punishment for wearing "non-regulation" shoes. Twelve fainted and were taken to hospital.
Even when there is no abuse as described above, the workers who actually manufacture products for the major corporations are often paid inhumanly low wages. It is agreed by labor groups that "a living wage for an assembly-line worker in China [for example] would be approximately US87 cents an hour" . This would allow Chinese workers to "cover their cost of living, stave off illness and even […] send a little money home to their families" . And yet a study in 1998 showed that many of the big-name brands, including Nike, "were only paying a fraction of that miserable 87 cents - some were paying as little as 13 cents an hour" . This vast underpaying is not merely present in a few isolated cases: it is endemic in the manu-facturing industry in the Third World, despite the multinationals' closure of factories in the Western world, and consequent "massive savings in labor costs" .
The reason for this alarming trend in workers' conditions lies in
the mechanics of subcontracting itself: at every layer of contracting, subcontracting and homework, the manufac-turers bid against each other to drive down the price, and at every level the contractor and subcontractor exact their small profit. At the end of this bid-down, contract-out chain is the worker - often three or four times removed from the company that placed the original order - with a paycheck that has been trimmed at every turn. "When the mul-tinationals squeeze the subcontractors, the subcontractors squeeze the workers" , explains a 1997 report on Nike's and Reebok's Chinese shoe factories.
Nike has made some steps towards improving working conditions in its Third World factories, mostly as a result of public pressure - after all, they want to avoid negative publicity at all costs, since it might damage sales. For example, the com-pany willingly joined a "coalition of sporting goods companies […] that will only produce soccer balls in Pakistan and elsewhere if they can certify that child labor is not involved" . They have also taken some measures to improve worker safety at their plants. However, this does not go far enough. Child labour is not the only human rights violation associated with sweatshops (and in any case, the manufacture of footballs is not the only industry that employs children), and allega-tions have been made that Nike actively ignores reports of workers being mistreated by their subcontractors. They have also taken no action towards enforcing even a living wage for their employees - which, when you consider that a living wage, as discussed above, is just 87 cents, is unforgivable.
The real truth behind sweatshops is that the major multi-national corporations will take any chance offered to them to in-crease profits and cut costs, even that means ignoring their workers' basic rights at the same time. They would doubtless prefer that human rights groups in the West never heard about their practices in the Third World, but since this has hap-pened, they must now find a way to help their public image recover. Fortunately for them, "there is no shortage of econo-mists to spin the mounting revelations of corporate abuse, claiming that sweatshops are not a sign of eroded rights but a signal that prosperity is just around the corner" . Such prominent economists as Jeffrey D. Sachs and Paul Krugman have spoken in support of this view, asserting that "in the developing world the choice is not between bad jobs and good jobs, but between bad jobs and no jobs" .
However, to proffer this argument is to ignore the simple fact that the corporations have all the power in their dealings with Third World subcontractors, and could easily choose to use it on behalf of their workers. If Nike were to put pressure on their subcontractors to raise working conditions to a decent level, or insist on their workers receiving a minimum wage comparable to that expected by Western workers, the subcontractors would have no alternative but to comply. If the choice was between improving conditions in their factories, or seeing their contract with the company terminated, working condi-tions and pay would no doubt see a sharp improvement. This has been proven by the success of McDonald's insistence that their meat suppliers follow the guidelines they laid down in the wake of E. coli. If Nike took this simple step, the choice would no longer be between "bad jobs and no jobs", since the factories under their control would provide "good jobs" - and the other corporations would surely follow suit, to avoid losing all the workers who would flood into the better-paying, safer jobs. Unfortunately, however, it does not seem likely that any of the multinationals will ever do this: such an action, after all, would mean sacrificing some of their profits and increasing costs, by however minute an amount, and that is not some-thing the corporations have shown themselves to be willing to do, unless they have no other choice.
The Case of Nestle
The human rights abuses committed by the Nestle Corporation (and in this case, they are directly committed by the corpo-ration, rather than simply condoned or ignored) are of a very different kind to those of the sportswear and clothing compa-nies such as Nike, although many of them are also connected with labour and workers' rights. This is in spite of Nestle's participation "in the UN 'Global Compact'; the much-derided partnership in which corporations pledge to abide by (un-monitored) human rights and environmental principles" .
The company's alleged activities in Colombia are a perfect example of the falseness of "Nestle's claim to fully support and ensure labour and human rights" . It cannot be proved that Nestle is even indirectly responsible for the murders and disap-pearances of Colombian trade union members working for them, but they may well have turned a blind eye, since "the logic of [these] human rights violations, to remove trade unions and other social movements, corresponds with the company's own aggressive stance" , which is in itself a violation of workers' rights.
There are at least three separate recorded cases that suggest that the company itself is actively attempting to remove all un-ion influence from its plantations and factories in Colombia, all involving subsidiaries of Nestle. The company has threat-ened workers with dismissal if they retain their union membership, and on several occasions, has attempted to break its contract with union members. If successful, these attempts "will allow Nestle to lower production costs by hiring new workers with temporary contracts, without a union organization, and without a collective agreement" .
It is also true, as pointed out by the Colombian union, that when Filipino workers went on strike against Nestle's violation of pension rights, the management of the plant in question called the police, who severely beat thirteen of the strikers. After-wards, the company hired two hundred private security guards to prevent further strikes. The union released a statement reading:
Nestle converts the factories into camps for the public security forces in order to create terror in the community, destroy the unity of the workers, and misinform the members of the union, with the goal of putting them against the leaders and destroying the movement. This is the policy of Nestle all over the world. This reality urgently de-mands the globalization of solidarity against the globalization of misery, oppression, and death of the communities.
It seems clear that Nestle wants complete control over the workers in its plantations and factories, so that they will not com-plain at being forced to work in substandard conditions. This is the only possible reason for Nestle's destruction of the un-ions, and as such, is a violation of the workers' human rights.
Nestle has also been a target of controversy over its involvement in various baby-milk scandals in Asia and Africa. It is claimed that the corporation's activities in some of the most poverty-stricken countries of the Third World are denying poor mothers the right to feed their hungry children as they choose. Nestle has been known to actively (and potentially illegally) promote powdered milk products as superior to breast-feeding, including giving free samples to women on maternity wards, in spite of the expense, and the danger from contaminated water.
A case in point is Sri Lanka. To quote one report on the subject:
Just two decades ago, Sri Lanka was a country where fresh milk was freely available and very cheap. In 1981, un-der the policy of liberalisation and privatisation, the government took a decision to close the National Milk Board and signed an agreement with Nestle to develop the dairy industry. After 20 years, there is no fresh milk available in the market, and the entire milk foods sector is in the hands of just two or three large companies, such as Nestle, Anchor and Maliban, which market only milk powders imported from the West.
In this way, it is clear that Nestle is removing the freedom of choice of the parents to decide what to feed to their babies. The price of the powdered milk sold by the corporation have also been rising sharply in recent years, effectively rendering many families unable to feed their "children with their essential milk requirements, even if they spend their entire family allowance on this alone" , which would leave them no money for other essentials. It is also alleged that, even in countries where alternative supplies and kinds of milk are available, babies who have been fed on Nestle powdered milk products will subsequently refuse fresh and even breast milk - which, again, removes the parents' freedom of choice and may leave them unable to feed the children.
In this way, the violations committed by Nestle are worse than those for which the clothing companies are responsible, since the pressure group Baby Milk Action claims that "by undermining breastfeeding, Nestle contributes to the death of 1.5 mil-lion infants every year, both by denying infants valuable nutrients and by promoting cycles of poverty in third world na-tions" . On this count, they are in contravention of World Health Organisation regulations governing the restriction of the promotion of baby formula.
However, in terms of motive, the human rights violations of both Nike and Nestle are much the same. They are both guilty of putting profit over people, and of endangering the health and even the lives of those who bring their profits to them - their workers and their customers, respectively. Since they exhibit such blatant disregard for the ordinary people on whom they ultimately rely, it will be very difficult to effect a change in their practices. They are extremely confident in their "right" to carry on as they have done so far, however unethical their methods may be. This is largely because the CEOs of these and other transnational corporations are fully aware of how much power they wield. However, clearly, something must be done to help the victims of such corporate oppression. In the next and last section of this essay, I will discuss action that might be taken, by governments or by the people, to persuade the corporations to change their policies.
What Can Be Done?
It is very difficult for anyone to take action against the abuses of human rights committed, condoned, and ignored by multi-national corporations, since they wield such enormous power, and can and frequently do put pressure on governments not to pass laws that might adversely affect them. However, there are still things that governments, NGOs and consumers can do to persuade the corporations to change their methods, by the simple means of affecting their profits.
One way in which corporations can be brought to book for the things they have caused or allowed to happen is by the vic-tims of such atrocities suing them for damages. This has, in fact, happened on several occasions and such large companies as Unocal, Chevron, Shell, Freeport, Texaco and Rio Tinto have been successfully ruled liable for violations of human rights, often committed by Third World governments with whom they had agreements.
The landmark precedent in this matter came in 1997, when "a U.S. federal district court in Los Angeles rejected Unocal's motion to dismiss a case brought by 15 Burmese villagers who suffered grievous human rights abuses associated with its Yadana pipeline project" . This decision means that in law, transnational corporations, and not "only states[,] can be held liable for violations of international law" and thus provides a highly useful precedent allowing future courts to hold the corporations responsible for their actions, and perhaps to fine them severely.
This ruling creates a precedent putting the obligation on corporations to act ethically in choosing which countries to deal with. This, in turn, might persuade governments to improve their human rights record, since
repressive regimes often need multinational corporate investment to exploit their resources. If corporations take their obligations seriously, governments will be forced to either respect human rights in the project or risk losing the investment they so desperately want. When push comes to shove, human rights abusers might be willing to soften their methods. The threat of litigation spoiling an otherwise lucrative project will hopefully induce compa-nies to do the pushing.
However, even though this sounds like an effective way to persuade both companies and governments to change their poli-cies, there is no guarantee that it will actually work. The corporations responsible for some of the worst human rights abuses, whether it is the use of sweatshop labour, or coercion of various kinds applied in the building of gas pipelines, may well simply weigh up the losses incurred in the two courses of action open to them. If they conclude that changing their methods would cost them more than carrying on as they are and paying any fines or legal fees incurred, that is what they will do, regardless of anything the legal system can do.
Nevertheless, there are effective ways to make the corporations reconsider their decision to ignore human rights, where violations are being committed. If they can be convinced that their profits are dropping as a direct result of consumer dis-approval of their methods, then they will revise those methods as quickly as they can. This has already been clearly shown on at least one occasion in the past, as discussed earlier in this essay.
During the BSE crisis, the American federal government seemed incapable of passing any legislation tightening up food safety measures in that country, for the simple reason that the American Meat Institute, and the major meatpacking compa-nies, opposed all such efforts. As a result of public fear the spread of BSE, and in spite of the regulations the FDA did man-age to force through, McDonald's profits in Europe fell by 10 percent, and it was feared that the same was to follow in the United States. The company took action to prevent this immediately, announcing that "its ground beef suppliers would be required to supply documentation showing that FDA feed rules were being strictly followed - or McDonald's would no longer buy their beef" . The effect of this declaration was salutary, and near-instant. Three of the biggest meatpacking companies in America, as well as the American Meat Institute, accepted all of McDonald's demands without question or complaint.
This phenomenon has also been noted in corporations in different industries. The few changes Nike has made to its em-ployment practices in the Third World are directly attributable to consumer pressure: when challenged by such activist groups as Students Against Sweatshops, "the company [first] disavowed responsibility for these plants, which it claimed were owned by independent suppliers. Nike later changed course, forcing its Asian suppliers to improve working condi-tions and pay higher wages" .
Government agencies still have their part to play in preventing human rights abuses by corporations, of course. But they are frequently emasculated by the sheer power wielded by the corporations. Even when they are not, their powers are limited to fines levied by the court system, and occasionally, sanctions imposed by other agencies. They may be most effective in combating the abuses committed by oil and gas companies, such as Shell, Esso, and the rest, but when it comes to clothing and food companies, there is little they can do.
In those cases, the most effective action one can possibly take is one that threatens the profits of the company in question. As previously discussed, this can be seen in McDonald's actions when faced with the threat of BSE: on seeing a risk of profit loss, the company acted swiftly and decisively. As a direct result of consumer pressure, "[w]hat the FDA had failed to achieve - after nearly five years of industry consultation and half-hearted regulation, the McDonald's Corporation accom-plished in a matter of weeks" . They have also been known to change their practices - to sell healthier food, in more envi-ronmentally friendly packaging - even before their profits fall, simply in "anticipation of consumer anger" . The same is surely true for the clothing and food companies, who depend as much on their profits as any other.
Therefore, true power to force corporations to change their practices lies with the consumer. As Eric Schlosser puts it, "A good boycott, a refusal to buy, can speak much louder than words. Sometimes the most irresistible force is the most mun-dane" . The truth of the matter is very simple, although the corporations would prefer not to admit it: power really does lie with the people, ultimately. The best and easiest, perhaps the only, way for people to convince the companies in question to act towards ending human rights abuses is to pose a significant threat to their profits, by expressing dissatisfaction or by ceasing to buy from them, and to make sure that they know why this is happening. And that is exactly what must be done.