Business Respect - CSR Dispatches No#42 - 3 Nov 2002

An email newsletter with news and discussion focusing on corporate social responsibility globally, looking at the companies in the news and the emerging issues. Linked to the website at http://www.businessrespect.net and produced every two weeks.

This web page provides news stories and articles from the newsletters. Newsletters also include links to features on the internet, Mallen's blog, and other resources.

In this edition, we reflect on the Nike court case on free speech and consider the case for a new ISO standard on corporate social responsibility.

Welcome

We have been asked several times to comment on the Nike court case in the US on free speech (see, for instance, the article currently on SocialFunds.org).

The truth is that - although the ruling has the potential to deal a major blow to the readiness of US-based corporations to undertake disclosure on social and environmental performance - it's early days. Short of Nike itself, there are few companies quoting the case as a reason for abandoning plans to produce reports.

Nevertheless, the potential course of events is quite a short one. Nike loses its appeal, and the principle is therefore confirmed. Within months, the next corporate in line gets taken to court for something it has said in public as part of its reporting. From that point on, the game is lost.

Having persuaded a number of companies to begin the process of reporting (principally through BITC's Business Impact Review Group) Mallen's experience has certainly been that corporate fear of disclosure can be a big factor in weighing up the pros and cons. Up until now, it has been possible to argue that no company has suffered as a result of reporting in terms of being seriously attacked for something it has put into its report.

The post-Nike ruling above potentially changes that.

It is one of the best examples yet of the law of unintended consequences. Presumably, the campaigners celebrating Nike's discomfiture are amongst those who would argue for greater corporate voluntary disclosure. Perhaps the likely huge negative impact on the CSR reporting movement is justified in their eyes by the short term pain dealt out to one of their least favourite companies. We hope that campaigners who take the longer term view will not be too quick to agree.

Of course, you may think that's completely wrong! So, keen as ever to know what you think, the vote on the website has now been updated to canvass your views on the following: What companies like Nike say in their CSR reporting should be protected by the same free speech rules as those covering their critics.

That means, of course, the last vote is now closed. The final position stood as follows:

CEO Pay and Perks - executive pay should be:

Whatever the market will bear - 14 (6.17%)
As high as necessary, but linked to performance - 89 (39.21%)
Restrained to a set amount of what the rest of the workforce earns - 124 (54.63%)

There were 227 votes in total - many thanks to all those who took part. It was a clear victory for those who would see more restraint in executive pay - although it was a strong showing for those who believe performance should be the main arbiter.

On a separate note, talk is now growing of the development of an ISO standard for corporate social responsibility. We present some thoughts below on this, but you may also want to read the article from the ISO magazine that gives a detailed account of the conference set up to consider the question. This document is now linked from the resources section of the website.

News

China: BASF and Sinopec to create sustainable business council

BASF, the German chemical giant, has announced that it is teaming up with Sinopec, China's leading petrochemical firm, to set up a Sustainable Business Development Council in Beijing.

UK: Institute of Directors repudiates CSR report

The Institute of Directors and the Institute of Public Policy Research (IPPR) are disputing the outcome of a survey of 500 businesses focusing on commitment to corporate social responsibility.

Talisman finally sells up in Sudan

Talisman Energy has announced that it is to sell its oil interests in Sudan - which have been the focus of huge controversy for the company - to ONGC Videsh Ltd, part of India's national oil company.

Congo: UN report calls for sanctions against corporate 'plunderers'

The UN Security Council has been urged by a specialist panel to impose financial sanctions against companies who it accuses of plundering the wealth of the Democratic Republic of Congo.

TotalFinaElf rejects accusations of forced labour

TotalFinaElf has disputed claims by the International Confederation of Free Trade Unions (ICFTU) that the company has knowingly profited from forced labour imposed by the military upon civilians.

RJ Reynolds taken to court for money laundering

The maker of Camel cigarettes, RJ Reynolds, is being taken to court in the US by the European Commission, accused of money laundering.

Australia: Westpac scores top for reputation

Westpac has achieved top place in the annual index of corporate reputation run by Reputation Management.

South Africa: Government and business join in tackling poverty

The private sector is joining the Department of Social Development to tackle poverty in South Africa, which according to the United Nations Development Programme remains one of the world's most unequal societies. The public-private sector initiative includes action against HIV/AIDS and aims to spur progress towards halving severe poverty by 2015.

Oryx Natural Resources refutes 'conflict diamonds' report

Oryx Natural Resources has attacked a United Nations report on conflct diamonds that alleged the company traffics in illegal goods.

Microsoft anti-trust settlement approved

The long-running Microsoft anti-trust saga seems destined to come to a close after US District Court Judge Colleen Kollar-Kotelly approved the settlement almost in its entirety, rejecting the calls from non-settling states for more punishing sanctions.

UK: Scottish Power wins environmental award

Scottish Power Plc won an environmental awareness award at the first annual National Business Awards.

Malaysia: Corporate Governance vital to meet global competition

Malaysia needs to have good corporate governance to meet the emerging challenges of global competition, according to Malaysian Institute of Corporate Governance (MICG) president Da- tuk Megat Najmuddin Khas.

South Africa: Angloplat nears empowerment target

Anglo Platinum (Angloplat), the world's largest platinum producer, is believed to be close to achieving the mining charter's initial 15 percent empowerment target.

Article

A standard for goodness

Author: Mallen Baker, dated 3 Nov 2002

The International Standards Organisation (ISO) is moving slowly ever closer towards the decision to create an ISO standard for Corporate Social Responsibility. For some people, this will represent a coming of age amongst the movement - the development of a standard that can achieve the mainstream respectability of an ISO 14001. For others, it will be the kiss of death.

Previous edition - No 41 | Following edition - No 43