Should I stay or should I go? - When should companies just pull out?
What's the issue?
At what point does a company decide that the human rights issues in a particular company where they have a base of operations is sufficiently serious to make withdrawal from the country the best option? It's not a theoretical question. Companies such as Talisman Energy have been attacked fiercely by human rights campaigners and others - not so much for what they do, but simply for the fact that they are there in the first place. In that case, in the Sudan, feeding oil revenues to the government which then uses them to prolong the brutual conditions in that country.
What are the arguments for pulling out?
Numerous, but the most commonly repeated ones stress the immorality of directly supporting through revenues activities which abuse basic human rights. They also focus on the indirect complicity, down to simply validating a particular obnoxious government or occupying power by agreeing to do business with them..
And the arguments for staying?
Talisman argued that the oil revenues would be paid by someone regardless, so it is better that they be paid by a company which is committed to using its influence to end human rights abuses, and to investing in the community where the company operates.
But the arguments are not straightforward ones, because they are highly dependent on context. No two countries are exactly the same - engagement with the government of one country may directly lead to abuses, whilst engagement with the government of another may make no significant contribution. Companies may have direct control over some aspects of their operations - such as whether their introduction into a country might result in forced relocation for local populations. But for many areas they have only indirect influence - and walking away may not be the most positive outcome for the people most affected by the abuses.
For some, the issue is very black and white. If there are human rights abuses at any significant level in a country, you should not operate there. Full stop. Applied without exception, that would tend to lead exemption from some rather bizarre places. One could argue that Italy, with the recent police treatment of protestors at Genoa, would be guilty. So a line has to be drawn -as soon as you've got to that point, it becomes a question of where to draw it.
So how do you work out the best thing to do?
The company needs to look carefully at the nature of the country and to ask a few fundamental questions.
1. Is the company subjected to widely held international sanctions, the terms of which would be contravened by the company's operations? If the answer is yes, then that should be it. No company should be seeking to operate outside the international framework of law - even if it sees that the effectiveness of that law (and many question the effectiveness of sanctions against some countries) as being limited. "Thou shalt not" doesn't exactly constitute the most compelling business case, but you don't have to go over the top to understand that companies remain corporate citizens of the world, and expect to operate within a framework of law that ultimately is all that makes business possible at all.
2. Is the country demonstrably under the occupation of a foreign or repressive power, one which is clearly not supported in any way by the will of the people? If the answer's yes, then stay away.
Now this is not such an easy or clear-cut question. When is a repressive power a repressive power? China's occupation of Tibet would be held by most to be a clear case. The position of Burma, where the NLD overwhelmingly won the popular vote only to see it annulled by the military, likewise. But what about Pakistan? Democratic government cast aside in favour of a self-appointed military president - and yet seen in the country by many as better than the corrupt parliamentary rulers, and to some extent accepted. Any definition which simply came down on the side of boycotting any country which does not exercise western-style democracies is highly challengable. So there has to be a judgement call.
3. Does the company's presence contribute to the human rights abuses?
Assuming the previous two questions have been answered in the negative, we are now into one big grey area. This is not about the unintended contributions that may come from individuals or groups of employees breaking the company's codes of practice. Where such abuses are discovered, the people concerned can be removed or disciplined. Make sure as you do so that you communicate this to the people affected by the aberrant behaviour - otherwise you may find your reputation too tarnished to sustain a long term presence (see the struggle Shell still has to this day in Nigeria).
But the example of forcible relocation given above gives some indication of how a company's operations may only be possible at the expense of the rights of others.
4. Does the company's presence support a government that abuses rights?
If the government is a demonstrable, or suspected, agent of human rights abuses, the company needs to consider how much the extent of its involvement supports such behaviour. If the company has only an indirect relationship, it may seek to influence the government on its approach to human rights. It may also seek to support communities and invest in them. This should always be undertaken on the basis of the rule of law in the country concerned. But even under the tightest of regimes there is often much that can be done.
If, on the other hand, the company's activities directly contribute to abuses, you should reconsider your position. The argument that if we don't, others will may be sustainable up to a point - but be aware that such arguments have been used to justify things in the past that society today condemns as culpable complicity. Companies who knowingly made Sarin nerve gas for the Nazi gas chambers, for instance. Again, there is a line to be drawn. It may be your judgement call, but you don't want that kind of historical judgement to tar you and your company in the future.
And given the rising expectations on companies for good corporate citizenship around the world, you probably wouldn't have to wait too long for condemnations to rise to the point where it damages your reputation. The move taken by the US legislature to bring in measures that would bar Talisman from the US stock exchange is one example of how a bad reputation can rebound.
So does that mean we're covered?
No - you may go through all of these questions honestly, and with great discrimination and judgement, and still find that some group somewhere will attack you as the new Lucifer on Earth. Because for some people, the fact that you're anywhere where bad things happen is enough to make you personally responsible. If it's any consolation, half of the time those critics are anti-corporate to the point where they would hate you whatever you did! Although they may embarrass you from time to time, they're not the serious threat. The real threat is to find that what you do on the ground has moved severely out of step with the values and expectations of society - and you should realise that such a movement can happen very suddenly. Your ability to tell the difference between the fringe group expressing a view no-one will ever share, and the group whose focus is the first straw in the breeze, indicating the coming tornado, will be key to your survival.
What's the issue?
At what point does a company decide that the human rights issues in a particular company where they have a base of operations is sufficiently serious to make withdrawal from the country the best option? It's not a theoretical question. Companies such as Talisman Energy have been attacked fiercely by human rights campaigners and others - not so much for what they do, but simply for the fact that they are there in the first place. In that case, in the Sudan, feeding oil revenues to the government which then uses them to prolong the brutual conditions in that country.
What are the arguments for pulling out?
Numerous, but the most commonly repeated ones stress the immorality of directly supporting through revenues activities which abuse basic human rights. They also focus on the indirect complicity, down to simply validating a particular obnoxious government or occupying power by agreeing to do business with them..
And the arguments for staying?
Talisman argued that the oil revenues would be paid by someone regardless, so it is better that they be paid by a company which is committed to using its influence to end human rights abuses, and to investing in the community where the company operates.
But the arguments are not straightforward ones, because they are highly dependent on context. No two countries are exactly the same - engagement with the government of one country may directly lead to abuses, whilst engagement with the government of another may make no significant contribution. Companies may have direct control over some aspects of their operations - such as whether their introduction into a country might result in forced relocation for local populations. But for many areas they have only indirect influence - and walking away may not be the most positive outcome for the people most affected by the abuses.
For some, the issue is very black and white. If there are human rights abuses at any significant level in a country, you should not operate there. Full stop. Applied without exception, that would tend to lead exemption from some rather bizarre places. One could argue that Italy, with the recent police treatment of protestors at Genoa, would be guilty. So a line has to be drawn -as soon as you've got to that point, it becomes a question of where to draw it.
So how do you work out the best thing to do?
The company needs to look carefully at the nature of the country and to ask a few fundamental questions.
1. Is the company subjected to widely held international sanctions, the terms of which would be contravened by the company's operations? If the answer is yes, then that should be it. No company should be seeking to operate outside the international framework of law - even if it sees that the effectiveness of that law (and many question the effectiveness of sanctions against some countries) as being limited. "Thou shalt not" doesn't exactly constitute the most compelling business case, but you don't have to go over the top to understand that companies remain corporate citizens of the world, and expect to operate within a framework of law that ultimately is all that makes business possible at all.
2. Is the country demonstrably under the occupation of a foreign or repressive power, one which is clearly not supported in any way by the will of the people? If the answer's yes, then stay away.
Now this is not such an easy or clear-cut question. When is a repressive power a repressive power? China's occupation of Tibet would be held by most to be a clear case. The position of Burma, where the NLD overwhelmingly won the popular vote only to see it annulled by the military, likewise. But what about Pakistan? Democratic government cast aside in favour of a self-appointed military president - and yet seen in the country by many as better than the corrupt parliamentary rulers, and to some extent accepted. Any definition which simply came down on the side of boycotting any country which does not exercise western-style democracies is highly challengable. So there has to be a judgement call.
3. Does the company's presence contribute to the human rights abuses?
Assuming the previous two questions have been answered in the negative, we are now into one big grey area. This is not about the unintended contributions that may come from individuals or groups of employees breaking the company's codes of practice. Where such abuses are discovered, the people concerned can be removed or disciplined. Make sure as you do so that you communicate this to the people affected by the aberrant behaviour - otherwise you may find your reputation too tarnished to sustain a long term presence (see the struggle Shell still has to this day in Nigeria).
But the example of forcible relocation given above gives some indication of how a company's operations may only be possible at the expense of the rights of others.
4. Does the company's presence support a government that abuses rights?
If the government is a demonstrable, or suspected, agent of human rights abuses, the company needs to consider how much the extent of its involvement supports such behaviour. If the company has only an indirect relationship, it may seek to influence the government on its approach to human rights. It may also seek to support communities and invest in them. This should always be undertaken on the basis of the rule of law in the country concerned. But even under the tightest of regimes there is often much that can be done.
If, on the other hand, the company's activities directly contribute to abuses, you should reconsider your position. The argument that if we don't, others will may be sustainable up to a point - but be aware that such arguments have been used to justify things in the past that society today condemns as culpable complicity. Companies who knowingly made Sarin nerve gas for the Nazi gas chambers, for instance. Again, there is a line to be drawn. It may be your judgement call, but you don't want that kind of historical judgement to tar you and your company in the future.
And given the rising expectations on companies for good corporate citizenship around the world, you probably wouldn't have to wait too long for condemnations to rise to the point where it damages your reputation. The move taken by the US legislature to bring in measures that would bar Talisman from the US stock exchange is one example of how a bad reputation can rebound.
So does that mean we're covered?
No - you may go through all of these questions honestly, and with great discrimination and judgement, and still find that some group somewhere will attack you as the new Lucifer on Earth. Because for some people, the fact that you're anywhere where bad things happen is enough to make you personally responsible. If it's any consolation, half of the time those critics are anti-corporate to the point where they would hate you whatever you did! Although they may embarrass you from time to time, they're not the serious threat. The real threat is to find that what you do on the ground has moved severely out of step with the values and expectations of society - and you should realise that such a movement can happen very suddenly. Your ability to tell the difference between the fringe group expressing a view no-one will ever share, and the group whose focus is the first straw in the breeze, indicating the coming tornado, will be key to your survival.