Salt & Light: Passionate About Human Dignity

Father Oliver Williams, who has spent decades working with developing countries, explains why the UN Global Compact might be the best hope for enduring global change.

By Oliver F. Williams, C.S.C.

Friends often ask me why I spend countless hours as a member of the Board of Directors working to advance the United Nations Global Compact (UNGC), a voluntary corporate social responsibility movement. What follows is my answer.

In my time at Mendoza, I have had the opportunity to visit a number of countries in Africa and Asia, including some of the poorest in the world. I witnessed, first hand, people working in sweatshops under extremely inhumane conditions, often making apparel and other products for some of the leading firms in the developed countries. Was not this wrong for multinational firms to use people this way, treating them without any regard for their God-given dignity? Many did not see it this way.

In 2000, I published a book titled, Global Codes of Conduct: An Idea Whose Time Has Come, which included essays by many of the major scholars in the area as well as appendices with most of the major codes contending for the global ethic. In my view, the crucial issue was gaining a consensus on the norms that should guide the global economy. One of the issues that emerged with the globalization of the economy is the lack of common agreement on the appropriate ethical norms that should guide business, especially in developing countries.

Is a multinational company responsible for human-rights violations of its subcontractors? What are appropriate ethical norms for guiding a company’s environmental policy in a country where there is no legal framework, at least in practice?

These questions took on added importance in the 1990s as multinational companies outsourced much of the production capacity to subcontractors in developing countries. The press and some NGOs played a crucial role in informing the public about the inhumane working conditions in factories that provide many of the products for multinational companies in the developed world. For example, the producers of a line of clothing carrying the name of Kathie Lee Gifford, a noted U.S. television personality, were widely criticized in the press for using child labor and running sweatshops.

Nike was often the poster child for this reprehensible behavior, but the company, at first, would accept no responsibility, claiming that the subcontractors were independently owned and operated. In Nike’s view, the firm did not violate any ethical norm by not monitoring how its subcontractors treated employees. After a long consumer boycott, Nike later changed its position, formulated a code of conduct for its suppliers, and became what many consider a model employer. Because the Nike case and several other similar situations were covered so widely in the press, it was a teachable moment. Much of the public became better educated about some of the serious problems with globalization.

It should be clear that the call for a global ethic was coming not only from concerned citizens and NGOs, but also from some members of the business community. For business, predictability is a key concern and gaining a consensus on moral norms would enable a more predictable environment. Globalization, technology and the Internet have shrunk the borders of our world, bringing peoples, cultures and economies together. Business had already learned that this new world required global standards for its product and production processes, and now it was learning that there was a need to have global ethical standards.

By the late 1990s, the globalization of the economy was an accomplished fact and critics were increasingly strident. The meeting of the World Trade Organization (WTO) in Seattle in November 1999 was perhaps a turning point in activist mobilization against corporate power and international trade. A broad coalition of various community groups, trade unions, environmentalists and assorted activists staged dramatic protests and captured headlines throughout the world. What was becoming clear to many thoughtful people was that there was a need to gain consensus on new forms of global governance. As business became increasingly multinational, the regulatory authority of the nation state was eroded. National laws were generally not effective in dealing with multinational companies with operations in dozens of countries.

Activists had learned in the struggle against apartheid in South Africa in the 1980s and 90s that often the best way to facilitate global governance for social justice was for civil society to bring moral pressure directly on business, rather than going through national governments. This approach certainly was effective in the Nike case, where consumer boycotts facilitated a change in company policies. Proactive businesses, too, were taking on the character of political actors by partnering with NGOs, formulating rules of conduct and assuming new responsibilities.

For example, some companies took action in protecting workers’ rights, participating in the fight over HIV/AIDS, and advancing education in poor areas. The problem was, however, that there was not a critical mass of “enlightened” companies, so the emerging ethical norms were not yet commonly accepted. For every “Nike” that came to believe that there was an ethical norm requiring a company to monitor its subcontractors to avoid sweatshops, there were dozens of companies unaware of or unconcerned about their responsibilities in the area of human rights, as well as the social and environmental issues in developing countries.

The Proposal of the United Nations

Suddenly, an answer appeared on the scene as to how we would gain a consensus on the moral norms that would guide the global economy. On Jan. 31, 1999, the then-Secretary-General of the United Nations, Kofi Annan, gave an address to the World Economic Forum (WEF) in Davos, Switzerland, that outlined the challenge and the promise of what has become known as the United Nations Global Compact (UNGC). His basic insight was that national economies have always assumed certain norms or moral values, some codified in law, but many that are not. Further, now that we have moved to a global economy, we must find a way to embed moral norms in the globalized situation.

The problems today are global in scope and many developing countries are reluctant to regulate business with costly new rules for fear of losing investment to nations with less stringent regulations. Often the race to the bottom is a fact of life in developing countries. The problem for Annan was how to move toward overcoming these problems and realize the vision of giving a human face to the global economy. 

In his words of the Davos address: “National markets are held together by shared values. In the face of economic transition and insecurity, people know that if the worst comes to the worst, they can rely on the expectation that certain minimum standards will prevail. But in the global market, people do not yet have that confidence. Until they do have it, the global economy will be fragile and vulnerable—vulnerable to backlash from all the “isms” of our post-cold-war world: protectionism, populism, nationalism, ethnic chauvinism, fanaticism and terrorism.” Companies and various stakeholders would, through debate, discussion, and trial and error, come to some minimal agreement on global ethical norms and practices.

 Kofi Annan saw clearly that if globalization and its ability to create massive wealth was to continue, there must be a set of ideals guiding business and insuring that the legitimate concerns of all, especially the least advantaged, were not neglected. This set of ideals, what has become known as the Global Compact, consists of 10 principles. More than 8,000 businesses throughout the world have already signed on as participants, as well as 3,000 civil society signatories.

 The 10 principles of the Global Compact focus on human rights, labor rights, concern for the environment and corruption, and are taken directly from commitments made by governments through the UN: the University Declaration of Human Rights (1948); the Rio Declaration on Environment and Development (1992); the International Labor Organization’s Fundamental Principles and Rights at Work (1998); and the UN Convention Against Corruption.

 I am convinced that the UN Global Compact is the best initiative that can meet the major challenge posed by globalization: developing a consensus on global ethical norms. The United Nations with its visibility, global reach, universality, neutrality and convening power is considered legitimate in our world today. With the local networks of the UNGC operating almost everywhere, there are channels of communication readily available.

 Through the process of persuasion, discussion and arguing about practices, for example, subcontracting to sweatshops, the norms and values that enable global governance are internalized; major players are “socialized” and the voluntary compliance of the UNGC principles shapes the new CSR agenda. It is for this reason that I have hitched my star to the UNGC and have dedicated enormous energy to advancing it throughout the world.

 —Oliver F. Williams, C.S.C. is Director of the Center for Ethics and Religious Values and professor of management at the Mendoza College of Business