NPR for North Texas
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations

U.N. Norms - A Commentary

By Chip Pitts, KERA 90.1 commentator

Dallas, TX – Let's clarify what the new U.N. Norms are not: they're neither the long arm of world government, nor a Communist conspiracy to kill business.

They are an exciting international law development that could be a great aid both for more sustainable business and society in Dallas and globally.

Relatively 'laissez faire' globalization has been the greatest engine of wealth that the world has known - but has also produced well-known downsides:

- Speculative capital, leading to recurring financial crises including those recently in Asia, Russia, and Latin America;

- Sweatshop labor, exploiting mainly young women and children;

- And environmental degradation, with pollution dumped wherever laws are weakest.

In short - the infamous 'race to the bottom' - with businesses seeking maximum profits in places of minimum law, because that's what the rules of the game seem to require.

The results? Persistent poverty. Growing inequality. A shrinking global middle class. Increasing discontent with democracy and capitalism. Political instability. And even deaths, as workers, the poor, and anti-globalization activists protest in countries that were former darlings of world capitalism in Asia, Latin America, and Eastern Europe.

None of this is good either for business or society.

The new U.N. Norms on Transnational Business offer the best hope thus far for the world to move beyond this unsustainable dynamic. By pulling together all the major human rights and environmental laws governing global business into one easy-to-understand document, they provide business leaders and managers with a simple checklist they can use to evaluate trade and investment decisions. Moreover, by putting the U.N. imprimatur on uniform guidelines, they level the playing field and begin to change and elevate the rules of the game, setting expectations for business at a higher level.

Among other things, they confirm as illegal and beyond the pale abuses like sweatshop, child, and slave labor, environmental dumping, and contracts with government or paramilitary forces that harm or kill disgruntled workers, environmental, or other activists.

It's no coincidence that Enron not only defrauded its employees and investors here in the U.S., but was also involved in corrupt bribery in places like Guatemala, and human rights abuses in places like India. The new U.N. Norms are not a 'hard law' treaty directly penalizing such action, nor a panacea for all such abuses. But they do form a 'soft law' instrument affirming existing international standards and providing a platform for further legal development. As such, they provide a template by which companies can and should evaluate and report on their own actions, and to which companies can be held by lenders, financial markets, and investors evaluating risk. They will also be enormously useful to governments and nongovernmental human rights, environment and development organizations holding corporations accountable for abuses.

By encouraging greater internal and external scrutiny of decisions, the new U.N. Norms will contribute to higher quality, more ethical, and more accountable business decisions. This is in the long-term interests not only of shareholders and other stakeholders, but the businesses themselves and the world at large.

 

Chip Pitts is an international lawyer and businessman based in Dallas.