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Debate: Business with human rights violators

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Should companies be allowed to do business with human rights violators?

Background and context

Companies such as De Beirs have done business for years in such places as the Congo, making deals with the likes of war lords, and aiding the continuation of many conflicts. Should such business deals be outlawed outright, or is there ever a place for doing business with human rights violators?

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Does trading with human rights abusers encourage human rights abuses?

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Pro

  • Trade allows human rights abuses to continue. Trading with human rights abusers gives them the much needed income that they need to finance their human rights abuses. The examples below are cases in point.
  • The conduct of foreign corporations in the Congo demonstrates the hazards of doing business with human rights violators. The Democratic Republic of Congo is suffering from what is surely the worst war in the world. At least 5.4 million people have died as a result of it. The real figure is probably around 6.75 million since the 5.4 million figure came from 2007 and about 45,000 people have bee dying a month as a result of the war. The Panel of Experts on the Congo, at the UN, reported in 2001 that “the conflict in the Democratic Republic of the Congo has become mainly about access, control and trade of five key mineral resources: coltan, diamonds, copper, cobalt and gold.” The same UN report stated that “the role of the private sector in the exploitation of natural resources and the continuation of the war has been vital. A number of companies have been involved and have fuelled the war directly, trading arms for natural resources. Others have facilitated access to financial resources, which are used to purchase weapons. Companies trading minerals, which the Panel considered to be ‘the engine of the conflict in the Democratic Republic of the Congo’ have prepared the field for illegal mining activities in the country.” The only reason the warlords are able to survive is because of the funds they get from trading minerals with foreign corporations. The mining NGO, Global Witness believes that “the profits they make through this plunder enable some of the most violent armed groups to stay alive.” Without this money they would not be able to recruit soldiers. According to Johann Hari “UNICEF says the militias can are [sic] offering … $60-a-month to carry on seizing and raping and killing” and when people are starving they will accept anything in order to keep their families alive. The profits made by the warlords have been well documented. Global Witness reports that “In many parts of the provinces of North and South Kivu [the main zones of conflict], armed groups and the Congolese national army control the trade in cassiterite (tin ore), gold, columbite-tantalite (coltan), wolframite (a source of tungsten) and other minerals.” The Group of Experts at the UN estimates that “FDLR [a principal armed group] is reaping profits worth millions of dollars a year from the trade in minerals from eastern Democratic Republic of Congo, in particular cassiterite, gold, coltan and wolframite.” In 2002, the Group of Experts wrote that “no coltan exits from the eastern Democratic Republic of the Congo without benefiting either the rebel groups or foreign armies.” The principal fundraiser for the armed groups has been trading minerals with foreign corporations, of which there are many in the Congo. Through the continuing trade in minerals from the DRC, corporations have allowed a conflict where probably over 6 million people have been murdered.

For sources and more information on human rights abuses in the Congo, see the external links section at the bottom.

  • There is no evidence that trade with abusers helps to reform society. However, there is plenty of evidence that trade with human rights abusers helps to increase their stranglehold on society. For the case of Burma see Burma Campaign UK. All of the leading pro-democracy figures in Burma are calling for trade sanctions on the Junta since businesses trading in Burma is increasing the Junta's hold over Burma and giving it the much needed capital for it's human rights abuses.
  • Economic Sanctions were what brought down Apartheid in South Africa. Sanctions on South Africa were the final straw in bringing an end to Apartheid, since they bankrupted the Apartheid regime and forced them to negotiate with the ANC. For information see Impact of Economic and Political Sanctions on Apartheid
  • Blocking trade with human rights abusers does not necessarily bring no work. While it is true that some sanctions have caused huge harm to the people of the country, particularly sanctions on Iraq and Cuba, that is because these sanctions were/are not aimed at ending human rights abuses, but rather at punishing the country. It is possible to trade directly with the people of a country while bypassing the dictators or human rights abusers. And in many cases, lack of trade to human rights abusers does not stop employment for the ordinary people. For example, in Burma most workers and peasants work in the informal economy so a lack of foreign capital wouldn't affect them at all.
  • Trade has never reduced the incentive for human rights abuses. There is no evidence that trade reduces the monetary incentive for human rights abuses. All that it does is give the human rights abusers the money they need to continue. Anyone who is committing human rights abuses for profit will not increase pay, working conditions etc. for the working people no matter how much income they get. Look at the history of dictators and you will understand.


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Con

  • Trade with abusers helps reform societies long-term. Doing businesses with and trading with human right violators can inject a society with needed capital in order for the slow process of economic, social, and civil rights development to take place. In short, it is better than the alternative, which is to isolate a regime economically, which harms the people of the country in question, and is a worse outcome overall.
  • Poor working conditions are better than no work. While it is true that poor working conditions and human rights violations should be frowned upon, it is also true that the state of abject poverty is often worse, and that workers are more than willing to partake in such conditions for this very reason. While this is no excuse for violators, and their habits should be encouraged to change, it should be recognized that employment under harsh conditions is better than no employment at all.
  • Trade may reduce monetary incentive for forms of abuse. Many human rights violators involve themselves in abuse for the very reason that they are trying to gain financially from it (or perhaps even just survive as businesses). Trading with human rights abusers may actually have the effect of making it easier financially for their businesses to offer more acceptable working conditions, working hours, and pay. But, this process all requires that trade with these abusers takes place so that they can more quickly move their businesses forward.


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Should corporations be banned from trading with human rights abusers?

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Pro

  • Trade with human rights abusers encourages human rights abuses. Trading with human rights abusers gives them funds that they can, and often do, use to continue the human rights abuses. This means that trading with human rights abusers amounts to complicity with the human rights abuses and should be treated thusly. The UN Convention on the Prevention and Punishment of the Crime of Genocide states, in article 3, that complicity in Genocide should be punishable, just as committing genocide should be. UN Convention on the Prevention and Punishment of the Crime of Genocide The UN Norms state that "Transnational corporations and other business enterprises shall have the responsibility to use due diligence in ensuring that their activities do not contribute directly or indirectly to human abuses (sic), and that they do not directly or indirectly benefit from abuses of which they were aware or ought to have been aware" Understanding Corporate Complicity: Extending the notion beyond existing laws - Amnesty International. "An individual may be regarded as an accomplice in genocide if it is established that he or she deliberately provided practical assistance, encouragement, or moral support that had a substantial effect on the perpetration of the crime." Complicity - Enotes Encyclopedia. Practical assistance includes money or any other financial support. Corporations that trade with human rights abusers are not only encouraging the crimes, but they are also complicit in the crimes according to International Law. Banning corporations from trading with human rights abusers should be the minimum that is done - doing this doesn't even go as far as international law demands (i.e. individuals complicit in genocide and other crimes against humanity should be punished as participants in the genocide).
  • Banning corporations from trading with human rights abusers will decrease human rights abuses. As noted earlier, particularly with regard to the DRC (but it applies everywhere), corporations trading with human rights abusers gives them the funds they need to continue and thus makes the human rights abuses possible. If corporations are banned from trading with human rights abusers, then it would be un-economical to commit human rights abuses and the abusers would, in many cases, be forced to stop since they couldn't afford the loss of trade (the idea behind sanctions). This would be a hugely positive outcome. So as to move towards this outcome, corporations should be banned from trading with human rights abusers.
  • Providing funds for human rights abusers in unethical. It is intuitive that if you fund a human rights abuser, part of the money will got o human rights abuses. This is unethical and should be unwanted by anyone concerned with justice.
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Con

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Is the existence of corporations bad for human rights?

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Pro

  • Corporations are legally obliged to put profit over people. According to Media Lens, paraphrasing Joel Balkan, “the senior managers of corporations are legally obliged, on pain of persecution, to seek to maximize profits for shareholders” and according to Joel Balkan corporate managers “must always put their corporation’s best interests first and not act out of concern for anything else (unless the expression of such concern can somehow be justified as advancing the corporation’s own interests).” This has been further expanded on by Corporate watch, who write that "Legally, a corporation is owned by its shareholders and controlled by directors. In running the company, directors are bound by common law ‘fiduciary duties [duties of faith]’, the most important of which is to ‘act in good faith (bona fide) in the best interests of the company as a whole’. This duty has generally been interpreted by the courts to mean acting in the interests of the shareholders; in turn, these interests are assumed to be maximising profits in order to pay dividends ... There is virtually no legal provision for company directors to consider any other interests." Corporate Watch reports further that the Companies Act of 1985, which sets out the general principals of corporate law, states that states that "duty is owed ‘to the company (and the company alone) and is enforceable in the same way as any other fiduciary duty’." Since corporations are legally obliged to put profit over people they cannot be expected to be anything but a hindrance to human rights, since externalities (particularly social costs) are excluded from pricing in capitalism.

Newspeak in the 21st Century - David Cromwell and David Edwards (Media Lens)

The Corporation: The Pathological Pursuit of Profit and Power - Joel Balkan

Corporate Law and Structure: Exposing the roots of the problem - Corporate watch Report (14th from bottom)

  • The internal structure of corporations forces them to put profit over people. When corporations were first chartered by Monarchs they were designed to bring the monarchs the most profit and power possible. So they were created with a structure that meant that if they didn't bring sufficient profit they would collapse. This forms the basic structure of corporations and means that they must pursue profit at all costs. (Summed up from the beginning of "Life Inc." by Douglas Rushkoff). Since corporations are forced by their structure to maximize profit, and put profits before people, they are pathological institutions and are a huge danger to human rights, which are irrelevant in the quest for profit.

Life Inc.: How the World Became a Corporation and How to Take It Back - Douglas Rushkoff

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See also

External links and resources:


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