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Offshoring our business responsibility

What directs our corporate moral compass?

Published on 10 May 2021

What directs our corporate moral compass?

Confronting the complexity of poverty

Many of us know that poverty is not a simple issue - rather, it is multifaceted, and to understand the factors which keep poor communities poor is no easy task. Believing that the absence of money encapsulates the complexity of poverty is, put simply, ignorant and crass.

We must be courageous to scratch beneath the surface, beyond the obvious; we must be willing to grapple with nuance, reflect upon our own responsibilities, and question if our business practices contribute to the problem. 

The truth is, we must be willing to explore the impact our businesses have on education, gender, age and cultural imbalances, socio-political stability, food, water and sanitation to name only a few factors, if we are committed to business acting as a tool to fight poverty. 

The difficulty is that in performing this ‘deep dive’ into our supply chains, taxation practices and operational policies, more often than not the factors within our companies which perpetuate the cycles of poverty, deprivation and inequality are misunderstood, shrouded in the unconscious bias of disconnected executives and decision makers fixated on maximising shareholder value.

Am I sounding unreasonable? ‘Sorry, not sorry’, as my children say.

Whilst asking the hard questions is never pleasant unless we start acting with a heightened level of responsibility, using what we have to tackle pressing global issues, our children, who see so clearly on these matters, will inherit little more than faded photographs of better times.

Niger Dalta Pollution

Niger Delta pollution

Now is the time to act

We are on a downwards trajectory in sustainability terms, where humanity’s consumption overshoots earths production; tens if not hundreds of species are going extinct each day. Millions of human and non-human species teeter on an increasingly precarious knife edge of climate-related migration. As business people, we cannot avoid the fact that we are often part of the issue. However, we are also a huge part of the solution - if we choose to be. Now is the time to act.

At the end of 2018 I was speaking with a recently retired senior executive of Royal Dutch Shell.

After a glass of wine or two, our conversation turned to the somewhat controversial ruling of February 2018, in which it was found that Shell were not liable for the oil spillages in the Niger Delta that decimated the well-being and livelihood of some 40,000 people, and plunged the fishing communities into a vulnerable situation.

In spite of Marilyn Croser, Director of the Corporate Responsibility Coalition, stating that the ruling was 'a gift to irresponsible multinationals, sending the message that they can abuse human rights and wreck the environment with total impunity', this senior executive clearly felt that the verdict equated to vindication of any responsibility -  and in turn legitimised the practices of Shell within the region, with any conflicting view being due to hysterics or ignorance.

Now it's important to remember that in this case there was no question whether the spillages happened, nor that it was oil belonging to Shell and its subsidiaries. The question was whether Shell was responsible for the spillages, as they were caused through illegal and unsanctioned actions by actors external to Shell.

I am certainly not qualified to argue the legal battle one way or another, but this case raises for me a question of responsibility, and the need for a radical counter cultural leadership model willing to go the extra mile. 

The cost of our free trade

Throughout history business leaders, economist, politicians and societal leaders, including myself, have argued in favour of varying levels of free market economy. The notion that business can operate free from excessive governmental regulation and that success or failure, innovation and production, operations and expansion sits in the hands of the market is central to modern western capitalism, and is the basis upon which many have and continue to trade on today. However, the free market is not free if someone is paying the cost of trade.

The truth is, the cost of our relatively free trade is actually often significant and severe, hitting many of the most marginalised first and worst.

The cost of trade in the Niger Delta has been the decimated livelihoods of thousands who do not have the voice necessary to be heard.

The cost of trade in UK/ international armaments is the bombed cities and lost lives of the innocent, swept up amidst fighting, now without the voice necessary to be heard.

The cost of trade in meeting the unceasing and often excessive consumer appetite of electronics, clothing or food is wide-scale environmental degradation through mineral mining, and improper electronic waste disposal; forced labour in fields and factories.

It is unavoidable to note that we have developed a global economic market that systematically outsources and ‘off-shores’ practices and services that are deemed unacceptable or unlawful within our own country. 

In 1819 the British government introduced the Cotton Factories Regulations Act, restricting children under 9 years of age from working within the cotton mills which filled the landscape of the day.

Sure enough, the action raised significant concern and outrage amongst factory owners who relied upon a ‘free’ unregulated employment market, to build their business upon what we would simply accept today as the exploitation of a child.

However, in what is a damning display of corporate offshoring morality recorded in The New York Times, 1st June 1861, we read that:

'[Britain] at large has been steadily increasing its pecuniary support of Slavery, by doubling its consumption of Southern cotton every ten years.'

Forty years after market regulations outlaw the employment of children within UK cotton factories, those same factories working under those same legal and moral frameworks continued to import around 10 million Cwts of cotton per year from the well documented, family-filled slave fields of the southern states of America.

Whilst I recognise the complexity of the issue – around a quarter of all British families relied directly upon the cotton trade, other, albeit more costly but less exploitative cotton was available but not purchased. Corporate responsibility not to exploit children was taken offshore. Out of the sight and mind of regulators, executives and consumers the cost of trade continued to be paid by those who had no voice to be heard.

Three ways to mitigate the cost of free trade

Trade is never free, but is always formed and influenced by the socio-political zeitgeist. Operating within the free market is simply committing to operate within the conventions of the society we live in. Since today, amidst this ‘Fourth Industrial Revolution’ and the highly connected global society we live in, it's only right that the conventions under which we operate apply in all corners of our supply chain.

'Impossible', you say? Maybe.There are certainly many factors and conflicting powers at play, however it doesn't mean we shouldn't try the following:

  1. Ensuring all your business practices - and that of your subsidiaries and stakeholders - adhere to the UN Universal Declaration of Human Rights is a good place to start. Embed a human rights declaration into your purchasing/production and tendering contracts.
  2. The Sustainable Development Goals sets out a clear, inspirational and ambitious framework for constructing alternative and more equitable, system value corporate economic processes. Future-Fit Business offers an outstanding toolkit to guide you through the process.
  3. The UN Global Compact joins you together with others on the journey and encourages you to be accountable for your actions and intentions.

For me, the question is never whether trade should be regulated or free. Such argument misses the heart of the matter.

The question is this: whether or not as business minded socially hearted actors, do we follow the letter or the spirit of the regulations applied to us?

Are we willing to go the extra mile?

Offshoring our needs creates untenable burdens

Child or forced labour in garment factories is disallowed, so do we change our hiring practices, increase our wages and ensure such principles are upheld throughout our supply chain - or do we offshore our needs to those without the voices required for their rights to be heard?

Because whilst we would not consider child labour restrictions as an enemy of free trade today but rather as a basic tenet of human dignity, like the cotton fields of years gone by, Unicef finds that the garment factories across south and far east Asia - which service many of the clothing brands we have come to love  - thrive at the work of children’s hands.[3] 

I believe that business is central to the development of a flourishing human and non-human ecosystem, and I am confident that healthy trade with minimal restrictions is key to that.

However the continuation of an offshored, illicit and immoral ‘free trade’ which evades common responsibility and collective well-being of people and the planet, not only perpetuates poverty in its deepest sense but will, in turn, undermine the healthy growth of profitable enterprise too. 

As business leaders we are called to do more, to be better, and to pioneer greater integrity.

Integrity means going the extra mile

Integrity means if we wouldn’t want it for our children we fight against it for the children of our staff throughout our supply chains and personal purchasing choices.

Integrity means that even when technicality absolves us, our social generosity compels us.

Integrity means that the voiceless unknown faces of the distant poor are seen and their words heard and their lives shared with ours.

To step into business is a great responsibility indeed. 

 

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