BOOKS: by Anthony CappelloNews Weekly
Business ethics: 'NO LOGO', by Naomi Klein
, April 21, 2001
by Naomi Klein
Available from News Weekly Books
Following the collapse of Communism a decade ago, free-market capitalism emerged unchallenged. This has bred a business strategy which Naomi Klein calls "corporate multiculturalism". What this creates essentially is a First World where advertising slogans are our creeds, and a Third World where multinationals have moved their operations in order to exploit lower wages, sweatshops and even child labour.
This exploitation of the Third World provoked a challenge by UN Secretary-General Kofi Annan. In 1999, in a speech to the World Economic Forum, he called on multinationals to "embrace, support and enact a set of core values in the areas of human rights, labour standards and environmental practices ..."
One leading firm that observes this ethical business principle is the clothing manufacturer, Levi Strauss and Co. Such an approach is admirable, but it has suffered commercially for doing the right thing.
Levi Strauss, of blue denim fame, was born in Bavaria. He emigrated to San Francisco at the time of the Gold Rush, not to find gold, but to supply the miners who had flocked to California.
In 1873, he established a waist overall, known as the blue jean.
When Levi Strauss died in 1902, he left his business in the hands of his family where it remains to this day.
Levi Strauss was an entrepreneur strongly motivated by Judaic values. He respected his workers and treated them well.
It is not surprising that in the spirit of its founder, Levi Strauss and Co. has been a leading light in setting a social contract for multinationals to follow. To its credit, Levi Strauss and Co. has initiated several global programs operating more than 40 countries, aimed at helping people achieve economic self-sufficiency. It has even donated funds to fight the spread of AIDS, and confront discrimination and racism.
The most notable of the company's efforts has been the establishment of the San Francisco-based Businesses for Social Responsibility (BSR). This is a business-friendly group that advises and trains corporations in the areas of "human rights policies" and other "social accountability".
BSR has had a "catalytic effect" although, as a company biographer pointed out recently, "the motivation for many companies to turn to BSR in the first place is to develop policies that will protect them from having dirty laundry aired in the public domain."
Ironically, despite all its efforts to set ethical standards, Levi Strauss and Co. has itself come under criticism in the area of human rights, particularly for moving much of its manufacturing offshore.
Sako Corporation in Korea provides garments for Levi Strauss. Sako has also agreed to sign the code of conduct which provides for the elimination of child labour, an end to harassment, and support for workers' right to free associations and collective bargaining.
Yet Sako, employing 320 workers, mostly immigrants to Korea, pays US$2.90 per hour for foreigners, US$3.20 for locals. The immigrants work on one-year contracts.
In 1996 Sako threatened to sack its workers when they tried to establish a union. The employees won the stand off, although many initiators of the strike were dismissed. But the problems remain as "Sako continues to issue termination notices to union supporters as their contracts come up for renewal, then withdraws most, terminating just a few, just enough to scare the rest of the workers."
So even with the best of intentions, Levi Strauss can only make its plants just a "little less sweaty".
Overall, the problem lies with the ideology of corporate capitalism with its need to exploit Third World workers and then market and sell their products to First World consumers.
Today multinationals are more powerful than governments and if it is left to such profit-driven enterprises to set standards and conditions in Third World countries conditions will not improve.
But it seems that a backlash is under way and Naomi Klein's No Logo has helped alert the world that a serious problem exists.