About the Project
The explosion of foreign direct investment by multinational corporations (MNCs) in the 1990s has elevated the overseas social and environmental performance of U.S. corporations to the center of the public spotlight. In many developing countries where U.S. firms manufacture goods, extract resources, or develop land, governments simply lack the regulatory capacity to assure corporate adherence to international standards of performance, leaving corporations without clear management practice guidelines, and in many cases virtual carte blanche to maximize their bottom lines.
As a result, in both home and host countries, MNCs have increasingly become the target of intense scrutiny-and criticism-by community and advocacy groups concerned with a wide array of negative social, economic, and environmental impacts of corporate activity. In response, many MNCs have developed voluntary “codes of conduct” in order to demonstrate their social responsibility to the skeptical public. However, because they are confined to narrow issue sets and lack monitoring, public disclosure, and enforcement mechanisms, these codes have little credibility in the eyes of activists and interested advocacy groups.
The California Global Corporate Accountability Project is working to enhance the international social and environmental performance of U.S. MNCs by moving the debate away from corporate voluntarism and toward innovations in corporate governance, both internally within firms and externally via government regulation.
In order to explore both national/global and local-level tools and regulatory handles, the CAP project focuses on sectors and corporations headquartered or with a high degree of business activity in California. The project has initially focused on the oil and high tech sectors. We have conducted field investigations on the high tech sector in Malaysia, Taiwan, Thailand, Costa Rica and India. Investigations in the oil sector have been undertaken in Ecuador, the Caspian region, and Nigeria.
In March 2002, the project released ‘Whose Business? A Handbook for Corporate Responsiblity on Human Rights and the Environment’. ‘Whose Business?’ is designed as a guide for educators, students and activists to promote corporate social responsibility and accountability worldwide. The handbook articulates the links between environmental, labor rights and human rights in a context of globalization. It provides also provides resources and contact information on major human rights, labor and environmental groups.
During the Spring of 2002, we will release our draft book-length public policy report that evaluates the benefits and drawbacks of codes of conduct. The report will examine the innovations in governance tools and policies which focus largely on improving the quality and credibility of information through monitoring, disclosure, and verification as well as on defining and enforcing environmental and social performance benchmarks. We will host our second NGO-Industry Policy Dialogue Workshop around the findings of the public policy report. <!–Beginning in the Spring 2001, our Phase II work will include:
1) New Laws on Corporate Governance: No federal or state laws govern the behavior of American corporations overseas or even require companies to report on their environmental and human rights practices. Without independent reports, consumers, investors, policy-makers and advocacy groups must operate in the dark–or rely on company representations. CAP is seeking to build upon its California coalition of advocacy groups to actively promote adoption of new laws that would require disclosure on human rights, environment and labor practices for all companies operating overseas.
2) Investment Screen for Human Rights and Community Environmental Health: Financial markets are a key leverage point to influence corporate practice. Not surprisingly, California is emerging as a center for the ‘ethical investment’ movement. According to Peter Camejo, co-founder of Progressive Asset Management and trustee of the $2.9 billion Contra Costa County employee pension fund, ‘There’s something big happening here in California.’ The newsletter Business Ethics recently observed that the California movement offers ‘a model of how social investing can find impressive new inroads in public finance, ultimately throughout the country.’Increasingly, institutional investors are seeking to meet public and consumer demands to invest in socially responsible corporations. However, few screens exist which examine a company’s environmental performance beyond U.S. borders and virtually no screens are in place to systematically evaluate a company’s performance on human rights, social justice, and community environmental health issues. There is an urgent need to provide a tool for investors to better discriminate among companies’ worldwide operations and performance.To help meet this need, CAP will work with key partners from the human rights, environmental health, and financial communities to catalyze and coordinate an effort to develop a framework for a human rights/community environmental health screen. We will create a Core Group of key players from human rights, environment, labor, business and other groups to collaboratively design the screen. We will work with Bay Area public pension funds and other investor groups to press for a ‘pilot’ implementation.
3) Training Journalists and the Media: The media has provided little coverage on the US corporate role in environmental degradation and human rights violations overseas–such as the killing by Nigerian security forces of environmental activists. Sometimes these incidents make the news. More often they do not. One reason is that journalists expert on civil rights largely do not follow environmental justice issues or international affairs, and those covering environmental affairs know little about human rights norms. They do not have an informed list of sources that can provide critical information at critical times. A strategic effort is needed to both educate and motivate journalists and help them understand how to report on these issues effectively. A CAP seeks to produce a print and electronic Training and Resource Packet, undertake a series of briefings with television and radio producers, and hold a pilot training for national print journalists.–>
Financial support for this project is provided by the Richard and Rhoda Goldman Fund, the Ford Foundation, and the MacArthur Foundation.
Papers and information associated with the CGCAP project are below.