Vol. III, Bulletin No. 16.                                                             September 8, 1998 

Responsible Investing? It's Not an Oxymoron

Do investors have responsibilities beyond striving to make the most money possible from their investments?
Yes, says Stephen Viederman, President of the Jessie Smith Noyes Foundation, a middle-sized foundation dedicated to responsible investing. "The behavior of the companies in which we invest is, however indirectly, our responsibility as investors," he emphasizes, and adds:
"We must ask why we expect so little from the corporation at the end of the 20th century. We have bestowed upon it rights but no responsibilities for the common good beyond the assumption that simply making profits and products is sufficient."
The prevailing investment culture, Viederman points out, contrasts sharply with the Biblical tradition of stewardship, which holds that one's money and other resources are not really one's own, but held in trust from God.  Viederman sees an urgent need for a "systemic transformation" that redefines "the economy and economics so that the public interest, community, and the environment, among other things, are valued."  But such a transformation, he says, "might require the downsizing of the economics departments of Harvard and MIT so as to make possible the redefinition of the economy."

(Notes on Viederman's views are available on the Website of Harvard Divinity School (at http://divweb.harvard.edu/csvpl/ee/ops-005.htm), where he made a presentation as part of Harvard's environmental ethics and public policy program.)

Worker Issues Gradually Coming Under Some Scrutiny Too

Viederman is not a lone wolf. In recent years there has been an explosion of interest in what is often called "socially responsible investing."  Although it has yet to make an impression on the great mass of investors, it has gained enough drive to qualify as a movement, or at least one that is "emerging."  Thus far, this movement has concentrated heavily on the environment and tobacco, very little on worker issues.  But that is changing.

Here are two signs of that change:

U.S. Leadership on Global Rules: One Example

The U.S. government knows how to rally the support of other nations when it has a good cause and a strong commitment to it.  A case in point is the administration's success in persuading the world's richest nations to outlaw foreign commercial bribery by their corporations.

Until recently, the United States was the only nation making such bribery a crime.  Two years of negotiations in the Paris-based Organization for Economic Cooperation and Development (OECD) changed that. The U.S. government last year succeeded in persuading the OECD, with 29 member nations, to adopt a convention setting rules similar to those binding U.S. corporations.

The U.S. could have capitulated before the opposition of some countries that considered bribery a normal cost of doing business internationally.  It could have heeded the advice of some economists who regard pay-offs as grease for the wheels of progress in overregulated societies.  Then the U.S. would have faced the choice of repealing its own anti-bribery legislation, or else leaving U.S. multinationals exposed to a competitive disadvantage that in two recent years cost them an estimated $11 billion in contracts lost to foreign competitors legally free to bribe.

International Rules Against Bribery To Take Effect Soon

But thanks to strong support from many U.S. corporations, the U.S. stuck to its guns, and prevailed in establishing a significant set of ground rules for international business. The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions is scheduled to go into force at the end of 1998.

You can find the text at http://www.oecd.org//daf/cmis/bribery/20nov1e.htm. The Website of the non-governmental organization that pushed hard for adoption of the convention, Transparency International, has information on what you can do to counter corruption at http://www.transparency.de/anti-corruption/index.html.

Moral of this story: Support of some corporate leaders would put some spine into the declared U.S. intentions to seek enforceable global rules on the human rights of workers.  Many investors are already pressing individual corporations to respect worker rights in their own operations.  But, as in the case of bribery, corporations need to get behind meaningful global rules on respecting worker rights.  Or else corporations that follow decent labor policies face relentless competitive pressures from those who don't.

Another moral: The OECD's adoption of this anti-bribery convention doesn't give it exclusive jurisdiction over this issue.  At long last, both the World Bank and the International Monetary Fund have realized that combating corruption is a necessary  part of their mandate.  That should be a lesson to those who want to insure that international worker rights issues are handled exclusively within the International Labor Organization.  As it happens, we've discussed this issue before.  See the Bulletin of a year ago, "The Plot to Box in the ILO--and Workers," at sixteen.htm.

Hong Kong Groups Send Message to President Clinton

'Stop Worker Rights Abuses by U.S. Firms'

Six groups in Hong Kong sent some advice to President Clinton during his brief stopover there in July.  "U.S. Transnational Corporations--Stop Violation of Chinese Worker's Rights," said a banner unfurled in a demonstration outside the office of the U.S. Consul General.  An open letter to the President had the same message, supported by a list of abuses that "violate the codes of conduct drafted by U.S. transnational corporations but also the labor law in China."

The open letter was signed by these six non-governmental organizations: Asia Monitor Resource Center, China Labor Bulletin, Hong Kong Christian Industrial Committee, Hong Kong Confederation of Trade Unions, Hong Kong Young Christian Workers, and the Justice and Peace Commission of the Hong Kong Catholic Diocese.
The July-August issue of the China Labor Bulletin carries the full text of the letter. It also has a listing (updated as of July 8) of some of the labor activists locked up in prisons and labor camps in China.  As a late news article in the same issue makes clear, the list needs further updating.

He Lands in Jail for Signing Up Unemployed Workers

On July 21, two policemen in Huaihua City, Hunan Province, arrested Zhang Shanguang, who had already served a seven-year sentence for his 1989 activities in the Hunan Workers Autonomous Federation. His latest crime: he had collected the signatures of more than 400 workers for an official registration of an organization of unemployed workers. In his absence, police searching his home found the incriminating evidence: his "Application for the Registration of the Shu Pu County Association for the Rights of Laid-off Workers."

On July 28 more than 70 Chinese signed an open letter calling upon China's leaders to end to the persecution of Zhang and other citizens for exercising rights they have under China's constitution and under international agreements that China has signed.

The current issue of the China Labor Bulletin should be available soon on its Website, http://www.china-labour.org.hk.

Keeping Up With What's Coming Up

Human Rights for Workers: Bulletin No. III-16, September 8, 1998
Robert A. Senser, editor

Copyright 1998
hrfw@senser.com. (Send e-mail)

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