Business and Human Rights in a Time of Change (Christopher L. Avery, Nov. 1999)
Introduction
Peter Drucker, a leading authority on international business and management, in 1993 wrote a best-seller called Post-Capitalist Society.[1] That book says we are now living through a sharp transformation that comes along every few hundred years. The transformation this time is a shift to a knowledge society. In capitalist society the means of production were capital, land and labour. Now in post-capitalist society value is created by knowledge, productivity and innovation. Now employees rather than capitalists own both the "means of production" (their pension funds are the largest shareholders of most big companies) and the "tools of production" ("knowledge workers own their knowledge and can take it with them wherever they go").[2]
Lester Thurow, a professor of economics and former dean of the Sloan School of Management at MIT (the Massachusetts Institute of Technology), agrees with Drucker, referring to "a technological shift to an era dominated by man-made brainpower industries"[3]:
Consider this list of the twelve largest companies in America on January 1, 1900: the American Cotton Oil Company, American Steel, American Sugar Refining Company, Continental Tobacco, Federal Steel, General Electric, National Lead, Pacific Mail, People's Gas, Tennessee Coal and Iron, U.S. Leather, and U.S. Rubber. Ten of the twelve companies were natural resource companies. The economy at the turn of the century was a natural resource economy….[O]nly one of these companies, General Electric, is alive today….
In contrast, consider the list made in 1990 by the Ministry of International Trade and Industry in Japan speculating as to what would be the most rapidly growing industries in the 1990s and the early part of the twenty-first century: microelectronics, biotechnology, the new material science industries, telecommunications, civilian aircraft manufacturing, machine tools and robots, and computers (hardware and software). All of them are man-made brainpower industries that could be located anywhere on the face of the earth.[4]
Drucker notes that this transformation to a knowledge society is a time of great flux, raising basic questions about society and its values. As multinational corporations expand their operations worldwide, many observers are raising questions and concerns about globalisation and its effects.[5] Jeffrey Garten, Dean of Yale University's School of Management, wrote in Business Week: "In the twilight of the 20th century, making globalization work humanely is quickly becoming the dominant issue of our time."[6]
The business community's relation to human rights is coming under the spotlight, and the questioning of values is well underway. This report looks at some of the changes taking place in that domain, and their implications. It is important for companies - and for human rights advocates dealing with companies - to recognise these fundamental changes and to adapt to the new world.
Smart companies are already adapting to the new culture of human rights accountability. Drucker says that in the new knowledge society, the successful companies will be those organised for constant change and innovation, always ready to change products, procedures and policies: "It must be organized for systematic abandonment of the established, the customary, the familiar, the comfortable."[7] He says the successful companies will be those that focus on responsibility rather than power, on long-term success and reputation rather than short-term gain.[8]
But too many companies still resist calls on them to give serious attention to human rights issues, thereby putting their reputation and bottom line at risk.
Chapters 1 and 2 identify trends that have a bearing on business and human rights. Chapters 3 and 4 look at how companies are responding to those trends. Chapter 5 summarises the case history of Nike and its Asian factories: how one company resisted and responded to society's demand that companies get serious about human rights. Nike's human rights record continues to be watched closely. Chapter 6 presents some observations drawn from discussions with multinational companies about human rights issues. Chapter 7 discusses company-supported projects in the developing world aimed at promoting sustainable development and human rights.
While this report covers only some of the recent developments and initiatives relating to business and human rights, the footnotes refer to publications that provide a fuller picture.
The term "human rights" is used in this report to refer to the full range of rights in the United Nations (U.N.) Universal Declaration of Human Rights[9]: civil and political rights, as well as economic, social and cultural rights. These rights are recognised as being universal, indivisible, interdependent and interrelated.[10]
The term "sustainable development" is used to mean an approach to development that "meets the needs of the present without compromising the ability of future generations to meet their own needs." That definition was used in the seminal 1987 report Our Common Future, written by the U.N.-appointed World Commission on Environment and Development, which was chaired by Norwegian Prime Minister Gro Harlem Brundtland.[11]