A Buoyant Market for Ethics
Financial Times, March 12, 2001
For those who fought "the battle of Seattle", and the various other battles that have become routine whenever the World Trade Organisation, the World Bank, or the World Economic Forum meet, transnational corporations are clearly the bad guys.
Mining and oil companies make deals with developing world dictators, paying them off so they can exploit the natural resources that should belong to all the people of the country. Multinational manufacturers shift their factories around the world to take advantage of the cheapest labour, the weakest pollution standards, the biggest pool of child labour.
Thus the best-known brands become targets. McDonald's restaurants are regularly damaged by demonstrators claiming the fast-food franchiser uses non-union labour to serve, in environmentally unfriendly packaging, unhealthy food made from the body parts of cruelly abused animals. Nike is condemned for the conditions under which workers in poor countries make its products.
The list extends to Monsanto, producer of what its critics call "Frankenfoods"; Shell, accused of complicity in the death of the activist and writer Ken Saro Wiwa in Nigeria; and the pharmaceutical companies, seen as protecting profits at the cost of allowing millions of people infected with HIV in poor countries to die.
But things are changing. Today, if I want to buy a pair of sneakers made in factories that have been independently monitored for adequacy of wages - relative to the general level of wages in the country concerned - where workers get annual leave and sick leave, and where there are codes against sexual harassment and verbal and physical abuse, I will probably do better to buy Nike sneakers made in Indonesia than to purchase a no-name brand.
Shell, with BP Amoco, has left an industry alliance that cast doubt on the seriousness of climate change and has joined the Business Environmental Leadership Council, a group committed to pushing for reductions in carbon dioxide emissions. Monsanto backed away from producing "terminator seeds" that would have made it impossible for poor farmers to save seeds from their harvest to plant next year's crop and has called for global standards on genetically modified grains and seeds.
Last August, McDonald's announced it would require egg suppliers to give their hens 50 per cent more space than the industry average, and would not allow them to "force moult" their birds - a common practice that involves starving hens for up to two weeks to make them more productive.
Finally, the pharmaceutical companies have offered discounted drugs to combat HIV infection in some of the world's poorest nations - although they are still going to court against a South African law that would allow the South African government to import cheap generic anti-Aids drugs.
Some critics would say this is all only clever public relations. But some of the changes are real. There seems little doubt that Indonesian workers at Nike factories will be better off as a result of standards the company has adopted. The pioneering step taken by McDonald's will reduce the suffering of millions of hens and is the first time any big client of the US egg industry has done anything for hen welfare. The voices of oil corporations in favour of reducing greenhouse gases make it impossible for conservatives to dismiss concerns about climate change as a left-wing conspiracy.
What is going on? At the very moment when free-market ideology holds virtually unchallenged sway, ethics are making an impact. But introducing ethics to corporate decision-making should not be seen as antithetical to free market ideology. Rather, it shows just how flexible an instrument of consumer preference - the market - can be. As Anita Roddick showed years ago with the Body Shop, the market can be used not only by capitalists seeking to maximise productivity but also by consumers with ethical commitments.
The icons of consumerism are also the most vulnerable to bad publicity. They value their image, and want to be seen as good global citizens. To keep them up to the mark may take an enormous amount of energy and vigilance from countless non-government organisations, but the struggle is not in vain.
It remains to be seen whether pharmaceutical corporations are going to be able to swim against the current and continue to put difficulties in the way of the South African government doing everything possible to ameliorate the terrible loss of life that the African Aids epidemic threatens. Merck has at least offered to sell two of its medicines at a lower cost than their generic substitutes.
My guess is that other drug companies will find that, in the long run, they are not going to do themselves good by being complicit in what is beyond doubt another holocaust, even if not one caused by murderous intent.