Blogs & Comment

The complex “business case” for human rights

 Apple supplier Foxconn improves working conditions  Apple’s ‘Nike moment’ is creating better working conditions at Foxconn Explosions. Suicides. Low pay. These grievances didn’t stop thousands of migrant workers from lining up for jobs outside Foxconn Technology’s Longhua factory in the industrial province of Shenzhen. Police patrolled the roads and tried to maintain order as the mass of would-be new hires, most of them young migrant workers, waited to be chosen for tests that would measure their physical and mental abilities. Foxconn employs about one million people in China and produces close to 40% of the planet’s consumer electronics for companies such as Samsung, Microsoft and Nokia. But it’s Foxconn’s work for Apple, manufacturing iPads and iPhones, that has been most closely linked to concerns over working conditions, child labour and hazardous waste, following a series of employee suicides in 2010.  To ease consumer worry, Apple hired the Fair Labor Association (FLA), a non-profit based in Washington, D.C., to perform audits on several factory facilities in February. Ines Kaempfer, an independent FLA inspector, called Apple’s situation a “Nike moment”—a reference to the fight for workers’ rights Nike struggled to deal with when it was linked to sweatshops in the ’90s. So far, other companies have been slow to join Apple, or begin audit processes of their own, but Foxconn has already demonstrated it will yield to public pressure. After several suicides in 2010, the company doubled the wages of some employees and brought in counsellors. In February, just days after Apple announced the FLA inspection, Foxconn issued a pay increase of between 16% and 25%—it’s third in two years—and a statement saying that its wages now far exceed minimum requirements set by local governments. (From issue March 6 - 19, 2012)

Questions of human rights are almost continually in the news, whether  reports of ongoing human-rights violations in South Sudan or North Korean accusations of human-rights violations in the U.S.

For many purposes, the language of human rights provides the lingua franca for discussing questions of ethics. Certainly debates over human rights have become prominent with reference to the world of business. The language of human rights come to mind pretty readily, for example, when we discuss dangerous working conditions, discrimination in employment, or environmental degradation. That’s why I recently co-hosted a day-long event called Where To From Here: A Canadian Strategy for the UN Principles on Business and Human Rights? The event was an attempt to begin the task of figuring out how to turn the United Nations Guiding Principles on Business and Human Rights into an actual agenda for concrete action for Canadian businesses, governments and NGOs. The discussion was fruitful, but I came away from the day with two lingering worries.

The first has to do with what is sometimes called the “business case” for human rights. During our day-long discussion, a lot of folks were concerned to make clear that respecting human rights is good for business. If we educate businesses on the business case, they suggested, then we can let executives’ built-in profit seeking impulse do the rest. And surely there is something positive to be said for the connection between respecting rights and doing well in business. Treating people well is conducive to productive long-term relationships, and productive long-term relationships are conducive to profits. But is respecting rights always conducive to maximizing profits? Clearly not. There will often be times when a business can increase profits by engaging in behaviours that put workers’ lives at risk or that stifle their right to free association or what have you.

But to look for a business case that establishes an iron-clad connection between human rights and profit is to ask for too much, and is perhaps not necessary in the first place. For practical purposes, you probably don’t need to prove (which you can’t anyway) that respecting rights always brings profits. It may be sufficient to establish that a) violating human rights brings substantial risks (risk of labour unrest, risk of litigation, risk of additional regulation), and that b) putting management systems in place to ensure that human rights are respected is not as expensive as you might have thought. In other words, the business case doesn’t have to be expressed in profits; it might be enough to express it in terms of avoiding losses.

The second point has to do with the notorious “hammer/nail” problem. When the only tool you have is a hammer, every problem looks like a nail. And when the only moral concept you have is “human rights,” then every wrong you see looks like human-rights violation. But of course, there are many ethical questions that have nothing to do with human rights, or that are at least not fruitfully expressed in such terms. Rights are important, but they aren’t all that matter. We also care about good consequences (for individuals and communities) and about character and about justice and so on. And sometimes it will simply make more sense to talk in terms of those concepts instead of in terms of human rights. An exclusive focus on human rights — and I’ve met people who literally could not express an ethical question without reference to the violation of some human right or another—brings two real risks. One has to do with what we might call “rights fatigue.” The language of human rights is incredibly potent, because human rights are ostensibly universal and because they are ostensibly inviolable. So such rights imply very strong obligations. If everything is about human rights, it tends to devalue the currency.

The second risk is that in some cases focusing on human rights may result in making it harder to reach agreement on ethical questions that really shouldn’t be that controversial. Is paying an employee very low wages to work 14-hour days a violation of a human right? Well, I don’t know. I mean, it’s probably a bad thing, and seems contrary to the spirit of various labour-related human rights, but is it an actual violation of one of those rights? What about hiring a 13-year-old girl with no better option to harvest cotton in Burkina Faso? It’s certainly a regrettable set of circumstances, one we should want to make better. But if making things better requires that we first agree on whether some right has been violated, we have a vary high moral hurdle to overcome first. It may be better to agree that the situation isn’t so good, and get on with trying to make it better.

Chris MacDonald is director of the Jim Pattison Ethical Leadership Education & Research Program at the Ted Rogers School of Management