Social responsibility in business<\/p>\n
This is the first of two articles on business responsibility
\nby Mayling Oey-Gardiner and Peter Gardiner, both social
\nscientists and principal investigators in a factory human rights
\naudit for the Reebok shoe producer, to be referred to in the
\nfollowing edition.<\/p>\n
JAKARTA (JP): Business is no longer just about maximizing
\nprofits. Today consumers make other demands on businesses. They
\ndemand that businesses behave in a socially (and environmentally)
\nresponsible manner or else they will not buy their products.<\/p>\n
Under these conditions reports with titles such as \"Cruel
\ntreatment working for Nike in Indonesia\" can be devastating for a
\nproduct, as consumers may not want to buy such goods from
\ncompanies where workers are said to be mistreated.<\/p>\n
Particularly in developed countries where consumers are
\nbecoming better off, better educated and increasingly concerned
\nabout their environment, they are starting to demand products
\nthat are not only of good quality, but that are friendly to the
\nphysical and social environment as well.<\/p>\n
Thus, consumers no longer simply seek the least expensive
\nproducts for a given quality -- they increasingly seek out brands
\nfrom companies known to be concerned with pollution control and
\nenvironmental sustainability.<\/p>\n
An additional dimension today includes whether or not the
\nproducts are produced by businesses that are socially responsible
\n-- that is, whether they abide by human rights standards in the
\nworkplace.<\/p>\n
One aspect of business social responsibility is how business
\ntreats its workers. Here, companies often express their social
\nresponsibility in regards to workers as codes of conduct or
\nproduction standards.<\/p>\n
These codes or standards frequently include articles on such
\ntopics as non-discrimination, working hours and overtime, forced
\nor compulsory labor, child labor, fair wages, freedom of
\nassociation and collective bargaining, and a safe and healthy
\nwork environment.<\/p>\n
For example, there may be corporate rules prohibiting
\ndiscrimination against any worker or group of workers, large or
\nsmall.<\/p>\n
There are often rules on regular weekly working hours and
\nmaximum overtime hours and on conditions regarding overtime, i.e.
\nwhen it is compulsory and when workers can refuse overtime work.<\/p>\n
To avoid unfair competition and to abide by existing
\ninternational conventions, such as the Convention of the Rights
\nof the Child, there are also often rules prohibiting use of
\nprison or forced labor as well as employing children below some
\nminimum legal age.<\/p>\n
Most important to workers are rules or standards requiring
\npayment of \"fair\" wages and to allow workers freedom of
\nassociation with unions or other work-related organizations.<\/p>\n
Finally, attention is often paid to standards in the quality
\nof the work environment -- the degree to which it is healthy and
\nsafe.<\/p>\n
Social responsibility issues have come to the fore in this era
\nof globalization. Multinational companies now produce branded
\ngoods throughout the world. Thus branded automobiles,
\nelectronics, garments, footwear and many other goods associated
\nwith one country are derived from parts or even final products
\nproduced in many other countries throughout the world.<\/p>\n
This has increased pressures on producers to deal with human
\nrights production standards in a wide variety of national
\ncontexts.<\/p>\n
How branded goods are produced depends on the industry. In
\nsome cases the main company establishes factories either as a
\ndirect investment or as a joint venture. The toy industry is a
\ngood example of this type.<\/p>\n
In other cases, local companies serve as \"suppliers,\"
\nreceiving and filling production orders. This is common in much
\nof the footwear and apparel industry.<\/p>\n
In the case of actual ownership, the main company can directly
\nimplement its own codes or standards. But, for suppliers, the
\nmain company can only demand that their partners or suppliers
\nabide by its standards as a condition for receiving their
\nbusiness.<\/p>\n
This latter condition applies to Indonesian companies that act
\nas suppliers -- producing branded goods destined for export to
\nrich countries.<\/p>\n
Here, for example, a number of American brand companies for
\ngarments or footwear have established human rights production
\nstandards that have to be followed by Indonesian suppliers if
\nthey want to receive orders from these American companies.<\/p>\n
It should be stressed that these developments did not come
\nabout by themselves because employers saw the light and were
\nwilling to share their profits with the workers.<\/p>\n
Non-government organizations (NGOs) and labor associations
\nalong with consumer groups have played a prominent role in the
\ndrive to ensure that workers are properly treated. And NGOs and
\njournalists continue to monitor business activities in many
\ndeveloping countries, including Indonesia.<\/p>\n
In addition, new businesses and accreditation boards and
\norganizations have developed in recent years.<\/p>\n
Business for Social Responsibility (BSR) is an established
\nassociation that meets annually and provides a forum where
\nbusiness leaders can share and learn from each others'
\nexperiences in creating a more socially responsible environment
\nfor business to operate.<\/p>\n
There are at least two ways for obtaining better conditions
\nfor workers. The first is by dealing with workers only,
\nuncovering their problems and working to empower them in terms of
\ntheir rights.<\/p>\n
The second is by working with both management and workers in a
\ntransparent manner to improve human rights and working conditions
\nand with both sides being aware of exactly what is being
\ninvestigated. Both methods have been practiced in Indonesia.<\/p>\n
An example of the first method can be seen in a study
\ncommissioned by Jeff Ballinger of Press for Change from the
\nJakarta-based Urban Community Mission, involving a survey of 11
\nNike and two Bata shoe factories in Indonesia.<\/p>\n
In September to October 1999, 25 interviewers were hired to
\nquery 4,000 respondents willing to answer seven questions related
\nto human rights practices and with interviews conducted either in
\nthe factories during breaks or else after work.<\/p>\n
Work was carried out behind the backs of management. They were
\nneither informed nor involved in the survey.<\/p>\n
Unfortunately, the scientific rigor of this exercise is open
\nto some question. For example, some of the questions were rather
\nsubjective and inconclusive.<\/p>\n
Respondents were asked if they had ever seen workers being
\nshouted at or mistreated in this factory, with no reference to
\nthe time frame or whether they had experienced mistreatment
\nthemselves.<\/p>\n
They were also asked simply about their complaints or negative
\nexperiences regarding their factory without any objective attempt
\nto assess (e.g. via observation) the seriousness of these
\ncomplaints.<\/p>\n
Also unknown is sampling methodology and reliability of the
\ninformation, for example, the degree to which seeking workers
\nwilling to be interviewed may have led to self-selection and
\nbiases in the results.<\/p>\n
The results were published under a very provocative title and
\nwith a writing style designed to draw the attention of readers
\nand potential consumers and, of course, to shock the companies.<\/p>\n
This may put some pressure on Nike or Bata to improve
\nconditions that are sources of major complaint or negative
\nexperience.<\/p>\n
But it is questionable as an approach to gain the willing
\ncooperation of management in improving human rights practices and
\noverall working conditions.<\/p>\n
As well, this approach may fail to uncover problems that
\nrequire trained professional observation. Workers simply do not
\nalways recognize the problems they face, such as whether their
\nworking conditions are safe and healthy.<\/p>",
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"sponsor": "Okusi Associates",
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