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Church Groups Launch Global Corporate Code of Conduct
Published on Wednesday, May 21, 2003 by the Inter Press Service

by Jim Lobe

WASHINGTON - Major church groups from around the world Tuesday launched a global corporate code of conduct that will be used to help determine whether their investment arms should buy or shun shares in corporations working in developing countries.

Ten years in the making, 'Principles for Global Corporate Responsibility: Bench Marks for Measuring Business Performance' addresses a wide range of issues faced by the corporate social-responsibility movement, including sweatshop labor, pollution control and access to affordable drugs, including anti-AIDS medication for employees of multinational companies.

It also calls for corporations to ensure adequate and continuing consultation with the local communities where they invest, to ensure that their operations are understood and supported by the people most directly affected by them.

The code was itself the product of consultations between church groups in the North with their counterparts and other non-governmental organizations (NGOs) in poor countries, according to Rev. David Schilling, director of global corporate responsibility at the Interfaith Center for Corporate Responsibility (ICCR) in New York.

"There is a strong emphasis on the dignity of the individual person and the sustainability of local communities," he said in a global teleconference with journalists Tuesday. "That differentiates this initiative from those, like the UN's Global Compact, the Global Reporting Initiative and other codes."

"The Global Bench Marks will help us concentrate on key issues with our global partners," said Barbara Hayes, chair of the Ecumenical Council on Corporate Responsibility (ECCR) in London. "We will be able to involve our partners in gathering information on companies for analysis and then to act together."

"We believe that this approach will be helpful for responsible investors and for those working more directly with the communities," she added.

The corporate responsibility movement, which began when the anti-apartheid movement in the 1970s pressed major U.S. and other western-based corporations to withdraw from South Africa, has become an ever-more prominent part of the business landscape, particularly since the end of the Cold War.

The ICCR, which played a key role in mobilizing shareholders in many U.S. corporations to join the anti-apartheid struggle, has become an association of 275 faith-based institutional investors, including national denominations, religious communities, pension funds, endowments, hospital corporations and other entities with a combined portfolio value of about 110 billion dollars.

But its influence goes far beyond that, as money managers and institutional investors--especially union and public-employee pensions funds worth hundreds of billions of dollars--have decided that corporations with poor records on human and worker rights, environmental protection and related issues are often poor investment risks.

About $2 trillion in portfolio assets in the United States are subject to some socially responsible investment (SRI) criteria, according to recent estimates.

The rising tide of SRI, as well as increasing media attention paid to corporate abuses, particularly in developing countries, over the past decade has prompted some corporations to enact codes of conduct to reassure consumers and investors. In other cases, independent bodies, like the United Nations and the Organization for Economic Co-operation and Development (OECD) have promoted codes of their own.

French President Jacques Chirac, who is hosting this year's summit of leaders of the Group of Eight (G8) most industrialized nations at Evian Jun. 1-3, had proposed that the leaders endorse a "Charter of Principles for a Responsible Market Economy" as their contribution to the growing concern over corporate behavior.

But those plans were abandoned at a meeting last week as a result of opposition from the U.S. and British governments, according to environmental group Friends of the Earth International.

The Global Bench Marks call for corporations to address three major issues in particular.

On workplace conditions, the report recommends that corporations adhere closely to core labor rights as defined by the International Labor Organization (ILO), based on respect for freedom of association and the right to organize, particularly: collective bargaining; non-discrimination in employment; the rights of children; payment of a sustainable living wage; and a healthy working environment free of all forms of harassment and reasonable work schedules.

On pollution and the environment, it calls for corporations to address issues such as climate change, biodiversity and the prevention of pollution, and to take responsibility for the environmental impact of their production processes and products and services throughout their lifecycles.

On access to pharmaceuticals, the report calls on global corporations to provide adequate coverage for their employees and dependents where governments do not provide universal health coverage, including necessary life-sustaining medicines for HIV/AIDS victims. Companies should also adopt a policy of non-discrimination against employees with AIDS.

Other issues covered by the Bench Marks include the sustainability of local communities, genetically modified organisms, contract supplier guidelines, indigenous rights, public reporting, corporate lobbying and governance and the involvement of stakeholders in corporate decision-making.

The report also calls for companies to create internal structures, such as a human rights committee of the board of directors, and a senior executive in each operation who has the responsibility for all human rights matters, to ensure accountability at both the management and board levels.

Companies should also put in place, says the report, policies that will determine under what circumstances they would withdraw from a country if its government was particularly abusive of, for example, the rights of its citizens or indigenous groups.

The initiative also stresses the importance of independent monitoring by local NGOs of corporate behavior, particularly in developing countries, as reports originating from the local community about corporate performance are likely to have much more credibility with investors in the home countries than audits carried out by international firms or internal corporate departments.

"Companies behave differently in the Third World," noted Bishop Joe Seoka, who runs the Bench Marks program in South Africa. "They are more into the accumulation of wealth."

"It's really an exciting opportunity to share analyses with global partners," noted Hayes, adding that the ERRC had worked closely with Nigerian groups in Port Harcourt, the center of the country's oil production, where many major U.S. and European corporations are active. "By acting together, we can promote real change."

Copyright 2003 IPS



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