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Oil, Human Rights and Business Ethics

Human rights is the business of business. The formula "Human rights is not the business of business" has long served international corporations active in the third world and given them a good conscience.
Oil, Human Rights and Business Ethics

International Corporations Should Be Converted to Political Responsibility

By Roland-Pierre Paringaux

[This article originally published in: Le Monde diplomatique December 15, 2000 is translated from the German on the World Wide Web. Roland-Pierre Paringaux is a journalist.]

[The "Battle of Seattle" showed that the great international corporations operate under the critical watchful eye of the media, international organizations and citizens in the age of the global village. One part of the public is increasingly convinced that the responsibility obligating international corporations in their spheres of influence also has an ethical dimension, respect of human rights and the will of the concerned population and respect for their culture and environment. This is particularly true when these businesses - above all the oil multinationals - act in a political environment marked by arbitrariness and acts of violence. Nevertheless many businesses insist they have no kind of political responsibility in the countries where they invest and do business.]

"Human rights is not the business of business." This formula has long served international corporations active in the third world and given them a good conscience.

Success is measured in industrial output or profits, despite the fact that these profits were realized with the suffering of native populations living under dictatorial regimes. That businesses are not there to "make politics" but are "neutral" and promote development and democracy by their mere presence is assumed. These assertions long refuted by facts continue in the vocabulary of oil corporations today. However they meet increasing opposition.

Economic obligation - allied with a more self-confident "civil society" - cre3ates new conditions. With the overcoming of ideologies and borders, a worldwide market is opened up to corporations while new obligations are imposed on them. According to the data of the United Nations, fifty multinational corporations are among the most important hundred world markets. Their decisions affect an ever greater number of countries and their inhabitants.

Unlike Greenpeace with its environmental protection campaigns of the seventies, human rights activists have needed a longer time to gain respect from corporations. In 1995, amnesty international and Human Rights Watch (US) started parallel campaigns with the goal of inducing corporations to assume economic and social responsibility in the area of human rights corresponding to their power and influence. Their main argument is simply that the Universal Declaration of Human Rights proclaimed in 1948 and ratified by most states enjoins respecting and promoting the principles of this declaration from "every individual and all organs of society".

Thus human rights concern everyone: individuals and societies, private persons and legal persons. This obligation is frequently refused with the argument that the private sector does not exist "to preach morals". Geoffrey Chandler, former Shell-manager and responsible today for "business" in the English section of amnesty international, replies: "Big businesses cannot and may not act as moral judges in the whole world. That they arrogate the role of governments or solve all the social problems that they encounter is not acceptable. On the other hand, their influence on worldwide economic policy constantly increases and the societies in which they operate are strongly influenced by their presence. All this brings new obligations to businesses."

The campaigns were first directed against international textile corporations and fashion enterprises who exploit low-wage workers of the third world including children under conditions prohibited by international agreements. In this connection, amnesty international - after a stormy internal debate - extended its hand to corporations as partners in this question. Today the human rights organization turns away from the vehement accusations and boycott appeals of the seventies and pursues instead a policy of meetings and exchanges of opinion to reach the same goals. Specific conditions for these meetings were created in several countries. In France, there are discussions between multinational corporations and representatives of the French amnesty section several times a year.

In all cases, what are central for amnesty are understanding and convincing while retaining its critical capacity instead of condemning. What Sir Geoffrey said in 1997 at a symposium in Oxford before managers of the oil industry was very clear: "Amnesty international advocates neither boycotts nor investment freezes and does not criticize the corporations who pursue legitimate business abroad independent of the politics of the respective country. Amnesty is convinced - and is supported by an increasingly critical public - that it is the duty of these firms to use their influence to defend human rights and promote the rule of law." The strategy has changed but the goal remains the same.

Nike and Reebox Improve Their Image

In its first phase, the campaign recorded a certain success. Businesses whose commercial success largely rests on image and a young clientel understood the problem, accepted cooperation and together with non-governmental organizations agreed to a code of conduct that included respect for individual human rights. Firms like Gap, Nike or Levi Strauss which faced public criticism on account of working conditions prevailing in their foreign production sites found a welcome opportunity to redesign their image without great expense. The shoe firm Reebox summarized this calculation in their brochure "Production Standards and Human Rights": "When we bring internationally recognized human rights standards in our business practice, we believe this will contribute to raising work morale and improving the work atmosphere and product quality."

This was an important step and the cooperation continues. However resistance is still rather strong as the UN Human Rights commissioner Mary Robinson declared in 1999: "Many business people seem to believe that the political and social environment of the countries in which they operate do not concern them. This is short-sighted. In coming years, the success of firms on the national and international plane will depend on their ability to do justice to the challenge of human rights."

That oil was always much scarcer in the subsoil of democracies than in countries where human rights and freedom are crushed can be traced back to the whim of geology. The work of amnesty international and Human Rights Watch has concentrated in the last years on the oil business, one of the crucial driving forces for worldwide economic growth. Both human rights organizations seek to bring the oil corporations to reconsider their business culture and their conduct (one relies more on the carrot and the other more on the stick). "We were very na´ve", Sir Geoffrey said. "Our trumpets did not make the bunkers of the oil magnates collapse." What finally brought the barons of black gold to the negotiation table was a series of catastrophic incidents that damaged their reputation.

The Shell scandal in Nigeria was the best known. This country is Africa's most important oil supplier. Its population is one of the poorest on the continent. The oil agreements enabled the tyrannical elites and their corrupt clientel to enrich themselves and keep their power for decades. As profiteers of a system largely controlled by Shell, some representatives of these elites amassed considerable wealth. General Sami Abacha who died in 1998 and his family deposited $3 billion in 19 accounts at Swiss and French banks.

In the beginning of the nineties, the Niger delta with its enormous oil revenue was the scene of violent conflicts. On one side, the local ethnic minorities accused Shell of destroying their environment and their culture. On the other side, the Nigerian security forces were responsible for protecting the facilities.

In 1993, the "Movement for the Survial of the Ogoni people" (Mosop) under the leadership of the author Ken Saro-Wiwa successfully mobilized tens of thousands of people against the Shell conglomerate. The case caused an international sensation. Under the pressure of the world public, the most powerful oil producer of the world had to stop its oil drilling projects. The government of General Sami Abacha resolved brutal repression methods. Hundreds of Ogoni were arrested, locked in jail or even arbitrarily executed. Two years later despite worldwide protests, Saro-Wiwa and eight other activists of the Ogoni were hung which was a gigantic scandal worldwide. The 1999 annual report of Human Rights Watch describes repeated military oppression measures and arbitrary executions in Nigeria's different oil regions for 1998 and 1999.

In 1998, the oil multinational British Petroleum (BP) gained public attention. BP agreed with the Colombian army for protection of its facilities in a guerilla area. Then its security division - Defense Systems Colombia (DSC) - was accused by Human Rights Watch of importing weapons and training the Colombian police notorious for their brutality. The DSC refused to cooperate in investigating these charges. The Uwa, a minority in northeast Colombia, have resisted drillings of the US oil company Occidental Petroleum for several years with the support of non-governmental organizations from the US.

Recently the journal Business Week reproached the oil multinational Mobil Oil for "complicity" with the Indonesian army who committed several massacres near Mobil facilities in the province of Aceh (December 28, 1998)...

In the Sudan, oil and human rights have not been very compatible... The Islamic regime was criticized for acts of cruelty, forced resettlements and tolerating certain forms of slavery

On this background, the human rights organization amnesty international published a report declaring that most foreign oil companies "tolerate acts of violence by simply ignoring them ("Sudan: The Human Price of Oil", amnesty international, London, May 2000). The list of companies operating in the west of the upper Nile region is long and includes the China National Petroleum Corporation (China), Petronas (Malaysia), BP Amoco (Anglo-American) and Talisman Energy (Canada), the International Petroleum Corporation (Sweden), Agip (Italy), TotalFinaElf (France), the Gulf Petroleum Company (Katar), the National Iranian Gas Company (Iran) and Shell (Netherlands). At the end of 1999, there were no signs of an improvement in the human rights situation...

In Burma, the French company Total and the American partner Unocal were exposed to worldwide criticism since 1996 forced labor and arbitrary executions...

In Angola the very profitable revenues from the oil business maintained an unending civil war which has already cost hundreds of thousands of human lives. According to estimates of non-governmental organizations, over half of the $900 million paid by international oil companies in 1999 for exploitation rights was used to finance numerous military offensives against the Angolian liberation union (Unita) of Jonas Savimbi. The rest seeped away in the corruption swamp. Unita finances its way with diamond smuggling.

In most documented cases, there were incursions or encroachments by security forces which watched over the oil facilities. These attacks were directed against the resident populations who resisted for different reasons - endangering the environment, culture, non-observance of agreements and so forth. According to Human Rights Watch, most companies denied any knowledge of such facts. Not one publically protested against the abuses committed in connection with their business activities. No attempt was made to stop the actions of the armed forces notorious for their brutality.

Thus the businesses are generally indifferent and inactive except for the cases taken up by the international press. In many countries, the oil companies operate in a climate of violence against which they must protect themselves. However as Human Rights Watch emphasizes: "When the oil companies ask the security forces for protection, their responsibility that the intervention does not lead to incursions also increases" (Arvin Ganesan "Business and Human Rights, The Bottom Line". Internet website: www.hrw.org).

Trust is Good - Control is Better

The oil corporations cannot select their locations since their decisions depend firstly on the geological realities. Still they can decide how they are engaged and can limit damages. Amnesty has worked out a whole bundle of "reasonable measures" for these firms so that their operations do not impair human rights...

Dialogue on one side and pressures on the other side have finally brought movement in the human rights question starting from Britain. Here the campaign had its beginning and its first results. At the end of the nineties, several conglomerates including three of the largest oil companies - Shell, BP-Amoco and the Norwegian state enterprise Statoil - accepted a new policy setting human rights in the foreground. The Norwegians joined this decision with a true confession. "We of Statoil", its president Harold Norvik declared in August 1998, "are convinced that democratization, removal of poverty and social progress are urgently necessary. Promoting the rights of children is not only a good cause but also corresponds to the interests of industry."

Despite these examples, most oil companies still entrench themselves behind their defensive lies of political neutrality and pragmatism. "So long as there is no UN embargo as against Iraq, we continue. Politics has to assume responsibility here", as one of the corporations summarized the general attitude of the Americans and French. Their forbearing rivals regard the "humanist" position of Shell, BP and Statoil as a utopia while others denounce the "hypocrisy of promises" "that are spectacular but impossible to keep", particularly in a period of rising oil prices. On the other hand, most representatives of industry do not want to risk a breach with amnesty since it is clear to them how respected is the organization and what the spirit of the times demands of them. This is particularly true for the enterprise TotalFinaElf which seeks to thematicize the question of human rights in a new corporate charter.

The "culture of human rights" is also advancing elsewhere. In inversion of the favorite argument of corporations, amnesty international opened the Ashridge Center for Business and Society and the Prince of Wales Business Leaders Forum in April 2000 with a campaign on the theme "Human rights is the business of business". In this connection in a survey of the largest 500 worldwide businesses, 36 percent of them resolved not to pursue a certain investment process on account of human rights problems and 19 percent had stopped their investments and withdrew from certain countries for the same reasons.

These results can be interpreted in two ways. For Geoffrey Chandler, "the statistics show the extent to which human rights, unquestionably the greatest challenge of the 21 century for industry, are ignored." Much more optimistically Andrew Wilson, director of the Ashridge Center, sees evidence in the study that the question of basic rights has reached an unparalleled level among management elites. To be sure we are at the beginning. "For many organizations, the fact that social and ethical aspects are considered in their business strategy is already a remarkable progress."

The different campaigns of human rights organizations have also led to results on the governmental plane. In June 2000, 30 industrial countries passed a text of the Organization for Economic Cooperation and Development (OECD) in which corporations are urged to respect human rights and the environment and abolish child labor. Unfortunately the governments have often not acted exemplarily in this point. Again and again they sacrifice human rights on the altar of strategic and commercial interests. Most governments, even those strongly committed to respecting principles, are reserved in criticism of human rights violations and corruption as soon as oil comes into play. For example in 1998, the government of the Netherlands - previously one of China's sharpest critics for suppression of freedom - fell in line or changed course to the position of the European Union which refused to support a China-critical resolution of the UN Human Rights commission. Shortly after, Royal Dutch Shell received an award from the government in Peking for the largest investment project ($4.5 billion) ever negotiated with a foreign group. In 1997 the planned agreement was annulled. At that time, the Dutch government, deviating from the line of the European Union, still supported a resolution on human rights in China.

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