In recent years, a number of businesses have been criticised over human rights abuses. Wal-Mart, US owners of Asda, have come under attack for using Chinese factories where child labour is rife for toy production . Human rights abuses exist in factories in the West too, as identified by Human Rights Watch’s report on low wages and poor working conditions of immigrant workers in US meat and poultry factories. In pursuit of lower operating costs in order to increase profits, these companies or their suppliers have compromised human rights in order to drive down costs. This essay explores the concept of human rights in a business context, looking at various examples, and argues that recognition of human rights is not merely a moral obligation but good business practice on economic grounds.
Human rights have been defined as
“those basic standards without which people cannot live in dignity. To violate someone’s human rights is to treat that person as though she or he were not a human being. To advocate human rights is to demand that the human dignity of all people be respected” .
Extensive human rights principles are codified in UN documents. Pressure is put on countries not adhering to the principles, especially for practices perceived as particularly abhorrent (e.g. torture, murder, imprisonment without charge or trial), but they are not all enshrined in law . Following principles that are not legally binding but are seen as morally desirable is a matter of ethics, and this leads to business dilemmas: there is a perceived higher cost of ethical behaviour and hence reduced profits and potentially decreased competitiveness if rival organisations continue to drive costs down by unethical means.
The case for and against ethical business practices
Arguments exist both for and against ethical business practices. Child labour and human rights abuses against workers have two main causes: (1) pressure to deliver cheaper goods and (2) local circumstances.
The Ethical Trade Initiative (2005) recognise several suppliers who are working to improve the situation regarding driving prices down: Gap, Nike, Tesco and Otto, all of whom have been accused of exploiting foreign suppliers. As one supplier explained:
“The only ham left in the sandwich is our labour costs. If the supermarkets squeeze us, it’s the only place were we can squeeze” .
The second situation is rather more challenging for businesses to address, and involves issues such as local poverty. China has legislation outlawing the employment of children under 16, but this is not always adhered to by factories . This is partly due to demand for work for under 16s:
“The poorest families are often left with no option but to send their children out to earn money” .
In a situation such as this, it could be considered more important to address the poverty than the child labour, as if the law is rigorously enforced, families could face increased hardship.
There is an argument that Western demand for cheap goods has driven the situation. However, consumers are increasingly aware of human rights issues in the supply of goods to Western markets and in some cases, campaigns have sought to force businesses to change their approach. This happened in the case of Nike, where a boycott campaign encouraged the organisation to address labour practices among its suppliers . This was in part due to youth activism reducing the desirability of Nike products. The power of the consumer was articulated by a 13 year old boy from New York’s Bronx:
“Nike, we made you. We can break you” .