World Economic Forum 2003: Roth: "Davos left me encouraged"

World Economic Forum 2003
Roth: "Davos left me encouraged"

I was first invited to Davos in an apparent moment of panic. The 1999 protests at the Seattle meeting of the World Trade Organization had just occurred, highlighting broad disquiet with the direction of globalization. I could imagine puzzled cries emanating from the corridors of the World Economic Forum searching for some representatives of non-governmental organizations to explain this sudden manifestation of popular discontent. My invitation to Davos appeared a short time later.

As the executive director of Human Rights Watch, I may not be best placed to explain the motives of the Seattle protesters. Human Rights Watch is not opposed to globalization, as many of those protesters were. Rather, we seek to ensure that the rules governing globalization are defined to best serve impoverished and marginalized sectors of society. We find that globalization is most likely to bring broad benefits when workers are free to organize labor unions and bargain collectively, when they do not face discrimination on grounds of gender, ethnicity, race, or religion, when they are not forced to work, or made to work at too young an age, or in abusive conditions, and when they do not face arbitrary violence.

There is no greater concentration of business leaders able to implement this vision than in Davos. That is a big part of why I have become a fairly regular participant. Over the years, I have seen an encouraging openness on the part of these leaders to discuss issues of social responsibility. That openness is by no means uniform. But when the issue of human rights comes up, it is rare these days to hear the refrain that was common less than a decade ago - that human rights are best left to nongovernmental organizations, that they are not the business of business. Today, virtually every brand-name company accepts at least in principle that they must pay attention to issues of social responsibility, whether involving human rights or the environment or the welfare of communities where they operate. I heard no serious challenge to that proposition at this year?s meeting in Davos.

However, companies today are grappling with the challenge of implementing these principles. I encountered serious discussions about what broad principles mean as applied in complex situations. For example, what does it mean to uphold the right to free association when operating in a country like China that does not allow independent trade unions? What does it mean to oppose gender discrimination when operating in a country like Saudi Arabia that mandates gender discrimination? What does it mean to oppose arbitrary violence when operating in a country like Colombia where the protection of one?s facilities may mean reliance on security forces and their abusive allies? There are no easy answers to these questions, but I encountered interest in exploring them - in identifying best practices and encouraging broad emulation.

The other major issue of social responsibility facing business is the question of enforcement. Today, codes of conduct are voluntary - it is up to businesses to hold themselves to their own pledges. Most businesses reflexively oppose the idea of governmental enforcement. Naturally, as in any voluntary system, compliance varies considerably from company to company. What is new - at Davos and elsewhere - is a growing understanding of the problems of voluntary compliance. Some businesses respect principles of social responsibility because they reflect the values of the CEO or of the company more broadly. But many abide by the principles for fear that failure to do so could lead to embarrassing exposure by NGOs or the press. Yet NGOs and the press typically focus on large, brand-name companies. Smaller, lesser known companies tend to operate under the radar screen. Insofar as compliance with principles of social responsibility entails some cost, that puts brand-name companies at an unfair competitive disadvantage.

I heard only acknowledgment of this problem at Davos, but no company of which I am aware is yet calling for governmental enforcement of social responsibility standards. Yet that would be a logical step toward redressing this problem. On an analogous issue - the problem of corruption - the perception that some companies were gaining an unfair competitive advantage by operating from countries that permit bribery led to pressure for OECD-wide enforceable anti-corruption standards. Might something similar take place in the area of social responsibility? It is too early to say for sure, but my conversations at Davos left me encouraged.

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