i. THE HUMAN RIGHTS CONTEXT

It is an established fact that many Multi-National Corporations (MNCs) are worth more than the total economy of many countries. It is also fact that MNCs transcend the control of individual states because of their "boundary less" existence and, therefore, they are not easily regulated. These facts raise the question of whether or not it is possible to regulate/control MNCs? The United Nations has commissioned working groups to understand and develop guidelines for MNC conduct. But this work is far from becoming international law in the form of a treaty, convention, covenant, etc. MNCs continue to evade concerted regulation at the international level.

The Post World War II period saw the affirmation of the dignity of the human person through various international human rights instruments i.e., the Universal Declaration of Human Rights and seminal conventions such as the Covenant on Civil and Political Rights and the Covenant on Economic, Social and Cultural Rights. The rights of the child, women, indigenous people, and the disabled have also been explicitly entrenched in specific international human rights instruments. Such international law is enforceable only if a state is a signatory to it and, therefore, voluntarily binds itself. More and more, states are accepting the duties imposed by such instruments and the international community is moving towards a greater affirmation of a human rights culture. Although states are increasingly accountable for their human rights records, no such legal obligations are imposed on MNCs. Other than the requirements of national legislative instruments, MNCs are technically not obliged to respect or observe "human rights".

As juristic persons, however, MNCs often enjoy human rights protection in that they can be the bearer of such rights. For example, freedom of expression is a civil and political right that many MNCs invoke. The challenge is to bring MNCs to a point where they are enjoined to observe, fulfill and promote all generations of human rights. The notion of duties as the flip side to rights is one way that MNCs can be said to have an obligation, as corporate citizens, to respect all rights even though they may not themselves be the bearer of such rights. It could easily be argued that if you are the bearer of rights, you have a duty to observe/respect the rights of other rights bearers in the community within which you exist. This argument becomes stronger in a context where horizontal application of rights is allowed as is the case in South Africa.

ii. COMMITMENT VERSUS COMPLIANCE

One way in which states attempt to regulate MNCs vis a vis human rights observance is in terms of the legislative and policy measure they adopt. For example, South Africa has ratified the convention on the elimination of discrimination against women (CEDAW) and the convention on the elimination of racial discrimination (CERD). The South African government must, therefore, report every 2 years to the respective U.N. committees on the action it has taken to fulfill its obligations under both instruments. The Employment Equity Act is a tangible way in which the South African government has responded to its obligations. Individual states may act to observe their human rights obligations, however, MNCs, for the most part, remain unfettered. In this respect, MNCs can be seen as a threat to national sovereignty and a challenge to the international community’s attempts to ensure the universality of human rights. The threat that MNCs pose must be framed within concerns for global stability and security in that the cliché "As long as my neighbor goes hungry, I cannot sleep at night" remains operational as long as MNCs human rights obligations go un-enforced. Unless a strong culture, affirming and respecting the universality of human rights, is established, our world remains in a precarious situation. The long term viability of human kind requires that all people are guaranteed and bestowed their human rights. As global corporate citizens, MNCs have a duty to help create a human rights culture. From the perspective of corporate sustainability, MNCs have no choice but to ensure that human rights are observed, fulfilled and promoted. Without this, global security, felt at national levels as high crime rates, high mortality rates, poor economic growth, etc., is threatened.

The question of most appropriate strategies to bring MNCs behaviour in line with the creation of a human rights culture is not easily answered. It would seem that a variety of strategies are necessary but, it is arguable, the most effective ones will be based on MNCs recognizing the necessity for them, of their own volition, to become more observant of human rights. Yes, one could argue that it is morally the right thing for MNCs as corporate citizens,to do, but the more cogent argument is that it would be stupid, in terms of their long term viability, for them not to do so. So how do we facilitate MNCs in coming to the realization that their violation of human rights is or will become a global threat i.e., a destabilization of the "human family" through exploitation rather than sustainable development? We do so through concepts and tools such as Social and Ethical Accounting, Auditing and Reporting (SEAAR). Rather than rely on compliance with national or international law, MNCs can commitment to values such as accountability, transparency, inclusivity, and ensure the living of these values through stakeholder engagement. In other words, MNCs can recognize that their viability hinges on them remaining relevant and that relevance is not determined in a vacuum. Rather, it is shaped by the expectations of the communities within which MNCs (increasingly the global community) exist. The voluntary sector, government, and private citizens are increasingly putting pressure on MNCs to account for their performance. SEAAR is a potential vehicle for MNCs to do so and to do so of their own volition.

A TOOL TO MANAGE TRANSNATIONAL THREATS AND CHALLENGES

It is no secret that the stability of the global economy hinges on the behaviour of MNCs. Unregulated MNCs pose an enormous threat to all states. However, MNCs are increasingly coming to the realization that they are the bearers of rights and duties regarding human rights and that their survival depends on the entrenchment of a human rights culture in free market systems. Rather than rely on legislative compliance, which bring challenges around international coordination and unification, MNCs are exploring other options for improving their performance vis a vis human rights and other aspects. SEAAR is one tool with which some MNCs have been experimenting. The elegance of SEAAR is that it is not forced onto MNCs – it is not legislated.

When a MNC adopts the SEAAR methodology, it is accepting its responsibility, as a global corporate citizen, to account to its stakeholders for its performance at two levels: ethical and social. Ethical performance is all about human rights i.e., the observance of the individual’s right to freedom, equality and dignity which includes the right to sustainable development. Social performance speaks to the MNC’s achievement of business objectives in a way that is not damaging to the community within which it operates. When a MNC does SEAAR, it is opening itself to its stakeholders by reporting on its performance but in a controlled way. The reporting is based on performance indicators developed in conjunction with stakeholders and anchored in its mission statement. Through this process, the MNC is ensuring that it does not intentionally violate human rights and, thus, pose a threat to global security.

Given the potential role for SEAAR as a mechanism for MNC self-regulation of performance, it is critical that SEAAR be advocated and promoted as such. For this, an institutional base needs to be established on a global basis. This kind of institutional development has been taking shape since the early 1990s in the form of an institute for social and ethical accountability (ISEA) with a secretariat based in London. Presently, parallel actions are being taken to establish regional affiliates of the London (international) ISEA in South Africa, India, Australia, and South America. The intention is that these institutes will collaborate to ensure that MNCs are introduced to SEAAR and adopt SEAAR practices in a globally consistent way. The effect of this will be to minimize the MNC’s variability and thus reduce the threat to global security and stability.

Through a global standard called the Accountability 1000 standard, the regional ISEAs will promote SEAAR and facilitate the self regulation of MNC’s performance (social and ethical). For example, the regional ISEAs will be membership organisations which will require members to commit to a basic code of ethics/conduct consistent with the practice of SEAAR. This way, regional ISEAs can work together to ensure that a branch or subsidiary of a MNC member, resident in their region, behaves in a way that is consistent with SEAAR and the codes of conduct. The appeal of this kind of self "enforcement" is that it is not imposed. The challenge, however, is to raise the profile of SEAAR and the regional institutes for social and ethical accountability so that MNCs see SEAAR as the way for them to move into their sustainable futures.