I wrote recently about corporate social responsibility and the need for this concept to be stretched and deepened to contribute more to changing our society. We need the equivalent to a mid-term review, to fundamentally question our economic system, to examine our assumption that economic growth is a good in itself. Endless growth is clearly not sustainable. On a simple level, growth requires consumption, and the resources are running scarce. On a social level, which is perhaps more urgent, growth at the price of exporting labour to cheaper countries, poor safety standards, zero hours contracts, and related problems, also indicates a re-think of our economic system is urgently needed.
Despite this, the belief in the central importance of the market is taking over our entire value system. Today, the EU Commissioner for Justice described rights and justice as being for businesses as well as people. Congruent functioning of the justice system was described as being needed, not for people but to enhance the single market. She described conclusions by EU Heads of State in Tampere in 1999 as being ‘as valid today as it was back then: “In a genuine European Area of Justice, individuals and businesses should not be prevented or discouraged from exercising their rights by the incompatibility or complexity of legal and administrative systems.”’
Hang on: do businesses have rights? An internet search for ‘rights of business’ yields only information on the UN Guiding Principles on Business and Human Rights, which describe how business should exercise responsible business with regard to human rights. The internet is silent on just what the rights of businesses are which are referred to above.
The Charter of Fundamental Rights of the European Union does include the right to conduct a business, but this is the right of a person to engage in a certain kind of activity, along with the right to work and to choose one’s own occupation.
One website does describe some rights for businesses, as a precursor to development alleviating poverty: the right to sell and to have a workspace with infrastructure and services (shelter, electricity, water and sanitation). Sounds good so far. Presenters today from Portugal describe revising the bankruptcy law to facilitate re-entering into business and, hopefully, retain staff and employed. But what about the next? ‘*Strengthen effective economic governance that makes it easy and affordable to set up and operate a business, to access markets, and to exit a business if necessary.’ This is the ground on which one presumes the Investor State Dispute Settlement can be built. (Why The Trade Directorate of the European Commission insists is not something to fear, as this means international law can be used to protect one’s investment. This does not reassure me. The right to sue the elected government of a country for loss of profit when the government changes its commitment to treaties such as trade agreements, sounds very worrying.
The Rule of Law is about equal and effective justice, said Ms P Koskelo, President of the Supreme Court of the Republic of Finland at today’s event at the European Commission. She went on to describe legal protection as a fundamental right and then to give the example that the Rule of Law is not being honoured if attention is given to justice for businesses but not enough attention paid to others (like people, natural persons). She asked, Are we thinking about justice as an instrument or are we really serious about justice as a fundamental right? These are quite different ideologies.
Businesses having rights awards double rights to investors, who are likely to be wealthy – so the rich have more rights in this system than other people. Business owners and investors of course have human rights as does every person, and then in addition the rights accorded to a business. This presumably is the basis under which the investor state dispute settlement mechanism is agreed: the right of a business to exist.
The law recognises that organisations may be ’legal persons’, while people are ‘natural persons’. Interestingly, the legal persons are established by the law, highlighting the artificial nature of giving businesses rights beyond, but in a cynical mockery of, human rights.
Businesses do not necessarily act as forces for social good. That is not their purpose: their purpose is to bring profit to those who have invested in them. But their activities can have global consequences. They need to be controlled by society, not controlling it. One example is the recent research-based conclusion that only ninety companies are responsible for a large proportion of global greenhouse gas emissions since the begin of the industrial age. Of these, twenty companies produced nearly a third of emissions. Although state-owned companies in the former Soviet Union and China are responsible for nearly 10% each, investor-owned companies like ChevronTexaco made large contributions (3.5% of greenhouse gas emissions to date; with contributions of 3.2% by Exxon and 2.5% caused by BP).
Businesses are run by people, of course. And they employ people. But businesses are not the same as people. Let us have a world for human beings and social wellbeing, using business to help create that, rather than a world for business whether or not one contributes to people’s well-being.