Spirituality as a Foundation for Freedom and Creative Imagination in International Business Ethics
ABSTRACT. Spirituality, in the broad sense, provides a deeper foundation for principles of international business ethics than legalistic, command-based ethics programs. Spiritual-based principles and values are presupposed and endorsed by established legal and ethical principles for international business. Identifying such spiritual-based principles and values requires the exercise of moral imagination and an openness to values embraced by the world’s religions. Once identified, a new realm of moral freedom is attained for multinational corporations which may help them move beyond an “ethics for sale” orientation.
Introduction This article explores the role spirituality can play in establishing a foundation for the multinational corporation’s internal development of moral imagination in international business ethics. Many of the difficult moral challenges confronting executives and managers doing business abroad demand respect and awareness of much more than the laws and conventional ethical customs of host countries in which a company is doing business. Further, since the activities of multinational corporations often impact so dramatically on human life in lesser developed countries, the leaders of such corporations ought to be encouraged to reflect on, and be inspired and influenced by, values and principles which call them to follow a morality that demands more Kevin T. Jackson is Assistant Professor of Business Ethics at Fordham University’s Schools of Business in New York City. He teaches courses in international business ethics. His publications include Charting Global Responsibilities: Legal Philosophy and Human Rights.
Kevin T. Jackson
than following the minimal standards of acceptability of conventional business practices in their own home country. My argument is that, strange as it may sound in a discipline that is fast becoming dominated and narrowed in its focus by social science, managerial theory, and analytical philosophy,1 it is advisable for international managers and executives to draw upon spiritual principles and values from religions and their secular equivalents from around the world. Companies that do business around the world tend to turn to either compliance-driven or code-driven ethics programs for external guidance in dealing with the challenges of international business ethics. Both of these approaches, which are sold to multinational corporations by a variety of non-profit and for-profit ethics consulting organizations, frequently result in the establishment of elaborate bureaucratic templates that embody the self-serving materialism of the corporation and its leaders, but often fail to provide genuine moral guidance to the firm and its workforce. Without a spiritual infusion, international business ethics is in danger of becoming a commodity.
Limits of compliance-driven international business ethics One traditional approach to business ethics at the domestic level has been to gear the corporation’s practices towards compliance with external legal and regulatory standards. The model for this kind of ethics program is legal positivism, which portrays law as a set of coercive norms which attract obedience out of a subject’s fear of incurring sanctions. As is well known, the United
Journal of Business Ethics 19: 61–70, 1999. © 1999 Kluwer Academic Publishers. Printed in the Netherlands.
62
Kevin T. Jackson
States Federal Sentencing Guidelines were a great impetus for corporations doing business in the United States to develop “effective” ethics programs that would increase the ability of the firm to detect and prevent legal offenses, with the ultimate objective of reduced legal liability for criminal offenses.2 However, for the multinational corporation, the international legal and regulatory environment is much more complex, as is, correspondingly the moral and ethical problems that it confronts. A broad set of corporate guidelines, laws and ethical codes of conduct provide global standards for multinational corporations. The Organization for Economic Cooperation and Development (OECD) has promulgated Guidelines for Multinational Enterprises addressed to both multinational firms and to governments that encompass areas such as competition, disclosure of information, financing, taxation, employment and industrial relations, science and technology, and transfer pricing.3 Moreover, there are guidelines for multinational corporations in such areas as tobacco sales,4 infant formula marketing,5 transfer of technology,6 use of pesticides,7 shipping,8 employment practices,9 consumer protection, seabed mining, 10 lunar extraction,11 financial regulation,12 environmental harm, intellectual property, antitrust regulation, trade and tariffs, data transmissions, and the sale of goods.13 Currently these regulatory standards are voluntary, and hence, they do not form a foundation for imposing legal liability on the multinational corporation. Although much corporate wrongdoing is taking on a global character, in the sense that unscrupulous business activities are carried out amongst and produce harm within many different counties, no centralized adjudicative mechanism exists for interpreting and applying the myriad of international standards in particular cases. And there are no legal sanctions available to back up compliance. These constitute the familiar “defects” of international law cited by legal positivists to deny the full-blown legal status of international law.14 Current arrangements that deal with sanctioning corporations committing international misdeeds often lead to unjust situations. The
injustice affects both corporations and the victims of corporate wrongdoing. Often, no authoritative means exists for resolving conflicts of laws arising among different governmental legal arrangements; thus, multinational corporations frequently must operate on an uneven playing field which results in competitive disadvantage for firms that comply with legal and ethical standards. Moreover, due to the insufficiency of legal and regulatory institutions in many of the lesser developed counties in which transnational businesses operate, many victims harmed by corporate misconduct have no effective redress for their injuries. No legal liability attended the dumping in overseas countries of millions of pair of fire-retardant childrens’ sleepwear containing tris, after the Consumer Product Safety Commission banned them for sale in the United States. This was also the case in connection with deaths and injuries sustained by Iraqis that consumed barley and wheat tainted by organic mercury fungicide prohibited in the U.S.15 Similarly, thousands of infants in Third World countries were harmed from the misdeeds of transnational infant formula manufacturers. No legal liability was ever assessed against the companies on behalf of their injuries because of the absence of mechanisms for filing lawsuits in the affected less developed countries.16 Over a decade ago, a lawsuit was successfully mounted against Union Carbide for the 7,000 deaths and 200,000 injuries sustained from the leak of methyl isocyanide, a lethal chemical used in the production of pesticides. Yet many residents of Bhopal, India to date have not been adequately compensated due to the grossly inefficient legal system in India, disputes about Union Carbide’s liability between pressure groups and courts, and corruption of officials and judges handling the compensation awards in India.17 Another problem is that some multinational corporations simply relocate to another country to avoid compliance with legal sanctions when they go against the company’s self-interest. For instance, Unocal recently opened what it calls a “twin corporate headquarters” in Malaysia. It did this after a U.S. District judge in California ruled that Unocal can be held liable for the actions of its business partner, the MOGE, in connection
Spirituality as a Foundation for Freedom and Creative Imagination with the construction of the Yadana pipeline. A lawsuit brought by the Burmese government-inexile indicted Unocal, Total and the Burmese junta, the SLORC, for violations of human rights laws. The plaintiffs allege that the SLORC forced tens of thousands of Burmese into slave labor and destroyed entire villages that lay in the path of the $1.2 billion pipeline. Due to the company’s interest in the construction of the pipeline and its payments to the government to help in its construction, Unocal was indicted for its involvement. It appears that the company is preparing to abandon its status as a U.S. company, and in doing so will be able to avoid compliance.18
Limits of code-based “integrity” models for multinational companies Beyond the compliance, or follow-the-law approach, many companies are establishing internationally-focused ethics programs which seek to establish an ethical culture within the firm. The current trend is for international corporate ethics programs to be based on the models that were originally devised for domestic corporate ethics programs. Such programs, when successfully implemented on the domestic level, have proved effective in guiding corporate behavior to operate at levels above the minimums set by law. There is, however, what I would call an “ethics for sale” problem associated with both the traditional domestic corporate ethics programs and the emerging international ethics programs. Nonprofit ethics consulting organizations are now competing with for-profit counterparts, sometimes affiliated with large accounting firms, to win highly lucrative consulting contracts for developing ethics programs for Fortune 500 companies. All too often, such external business ethics consultants neglect consideration of ethics or morality in the broad sense, and instead focus on the problem of finding out what the business people in charge of the multinational corporation want, and how they can give it to them without offending the executives’ own sense of right and wrong. The goal is to sell corporations an organizational process that will culminate in
63
their writing a code of ethics for themselves without any external moral “interference” whatsoever. Business ethics becomes a commodity for sale on the open market. So, the corporation and its leaders does not have to ask any hard questions. They can achieve “excellence” (at least one prominent ethics consulting firm omitted the term “ethics” from the title of an ethics center they helped institute) in business without getting into any sensitive or controversial areas of ethics. The corporation will tend to purchase the ethics program from the consulting firm that has produced the most alluring marketing materials, and which promises to bring the firm palpable, quantifiable economic benefits. What results is an ethics that has become banal and bureaucratic, focused on hypothetical, rather than categorical, imperatives. At the same time, encouraging the corporation to define “its own” mission and values runs the risk of sublimating moral considerations to economic considerations, since the leaders of the firm take the economic selfinterest of the corporation to be the paramount consideration. “Success” with this kind of ethics program is achieved when the public image of the firm turns positive, when profits and consumer satisfaction are up, when the investigative news teams are no longer spotlighting the corporation for sensationalistic abuses of the most minimal moral standards. “Integrity” with this kind of ethics program has only a conventional, reactive quality. The values of the company remain primarily economic values. Ethics is merely a vehicle for promoting profitability and competition. The codebook mentality prevails in the “ethics for sale” style of corporate ethics. This is merely a voluntary form of “ethical positivism” in which the corporation obeys norms it takes society to be imposing on it, and the motivation for obedience to the norms is a fear of the “sanctions” that result, not from incurring legal liability, but instead from loosing customers. The firm gears its compliance with ethics standards to what the public expects from it. The benchmark of social responsibility is public pressure and consumer demands. This deprives the corporation’s ethical initiatives of any genuine moral merit. Simply
64
Kevin T. Jackson
following what the law requires, or following well-established business practices as prescribed in a code of conduct does not involve acting with a genuine moral motive, if the reason for following the norm is fear of external sanction (which includes falling into disfavor with public opinion). There is no room for the exercise of moral imagination.
Spirituality and international business ethics To become fully integrated, it is necessary for international business ethics to direct itself away from the current trend towards satisfaction of corporate and consumer wants toward the proclamation of fundamental moral truths. One such truth, I would argue, is that the ultimate end of the global economy is to serve humankind – not vice versa. Business ethics must call corporations and the people that work in them to integrity in a world that is full of deception and illusion. It can only do this by modeling a fierce and unshakable integrity of its own – one which is not afraid to embrace a set of defining truths. Business ethics cannot be something that corporate leaders are “in to” from time to time. It cannot have as its central task trying to find some satisfying organizational “mission and values statement” and glossy code of conduct to buy, but instead, must ask hard questions. This realm of concern with meaning, with integrity in its deepest sense, is the realm of the spiritual and the broadly philosophical. International business decisions have a profound impact on human life in lesser developed countries. Life in Third World countries is highly vulnerable in relation to the immensity of power and advantage wielded by transnational enterprises. For instance, one of the most pressing moral problems in international trade today is the exploitation of child labor. Throughout many developing countries are some of the most intolerable types of child labor, such as bondage and child slavery, dangerous and hazardous work, and the commercial sexual exploitation of children, and the exploitation of very young children According to the
International Labor Organization, between 100 to 200 million children around the world are being deprived of their childhood for the profit of others.19 Thousands of infants in Third World countries were harmed from the misdeeds of multinational infant formula manufacturers.20 Children playing in the streets of Juarez, Mexico have had skin burned from their feet and legs upon contact with noxious wastes discharged by maquiladoras that flow through open canals. The excessive amounts of pollution pose a threat to the water supplies of both Mexico and the United States.21 Thus, ethical decision-making in the context of international business ought to evoke reflection on both collective and individual values in the same way that such reflection takes place in religion and theology. The theologian James Gustafson has noted that “practical moral questions, if driven by a process of inquiry to their borders, require some reflection that is theological, or at least the secular equivalent to theology.”22 What might a corporation turn to as a model for spiritual principles and values? In all fairness, an exhaustive and in-depth study of the various religions and secular traditions of the world themselves provide the most direct source. However, it should be pointed out that there are many scholars and theologians who have systematically studied the moral dimensions of religions of the world. In addition, unitarian universalism is an established religion which explicitly embraces religious meanings derived from the world’s religions, without asserting any particular religion or tradition as ultimate and supreme.23 Such sources as these, then would provide a starting point for inquiry into spiritual principles and values. I would assert that there are many spiritual principles and values that are presupposed and endorsed by more specific norms which apply to the activities of multinational corporations via national and international laws, as well as human rights standards and customary business practices. Although it would be entirely too ambitious to attempt to set out a comprehensive taxonomy of such spiritual principles and values in the present article, the following section entitled Spiritual
Spirituality as a Foundation for Freedom and Creative Imagination Principles and Values, will at least offer a provisional sketch which could be further elaborated, depending on the particular regions of the world in which a corporation is doing business. A parent corporation headquartered in a Western industrial nation that will be dealing with a subsidiary’s customers and employees with predominantly Muslim beliefs, and working in a host country legal system that is influenced by Islamic norms will probably be interested in identifying principles that might be common to, say, Christianity, Judaism and Islam. Yet, interestingly, many principles and values, for instance, the Golden Rule and respect for life, can be found in virtually all religious traditions, while others are central to only some religions. What is important is that executives and managers be accorded sufficient information about spiritual principles and values to enable them to understand the central moral messages that emanate from them. As Thomas Donaldson has written, with regard to what he terms “core human values” that capture minimum moral standards for all corporations, regardless of where they do business: “[d]espite important differences between Western and non-Western cultural and religious traditions, both express shared attitudes about what it means to be human.”24 I take issue with proclamations such as those by ethicist Michael Waltzer, who quipped that “there is no Esperanto of global ethics.”25 There is a constellation of shared spiritual principles and values, which forms the foundation of ethics for multinational companies, nation-states, and persons around the world. It tends to be at the level of interpretation and applicability of more specific norms in disparate contexts and cultural settings that the central moral meanings diverge.
Spiritual principles and values When one takes a broad perspective of the world’s religions, together with the various secular equivalents of those religions, it is possible to identify general spiritual principles and values, many of which overlap and intersect in ways that are overlooked or ignored by contemporary debates about the relativity of ethics and the
65
impossibility of obtaining consensus on controversial ethical issues. While I admit that it is essential to respect different ethical and cultural traditions when doing business in countries from around the world, I believe that there are central moral truths which are captured at a spiritual level, and which tend to become obscured at the level of external legal and ethical norm development and implementation of the sort that drives the mainstream business ethics initiatives of most multinational corporations. The following is a brief exposition of some of these key spiritual principles and values, which is not intended to be exhaustive, but instead, illustrative:26 Sikhism. Equality of everyone in God’s eyes (egalitarianism); God is worshiped by caring for others, service to others (serva), and by living honestly; giving one-tenth of one’s income to others; leading a disciplined life and working in jobs that benefit society. Buddhism. Consideration and compassion for others, living honestly, avoiding harm in one’s actions; avoiding jobs that would harm anyone; positive thing to bring the mind into a healthy state. Following the Eightfold path (right viewpoint, right values, right speech, right actions, right livelihood, right effort, right mindfulness, right meditation). Judaism. Responsibility for the poor and needy; obedience to hundreds of Jewish laws, Ten Commandments; sacredness of Covenant with God. Christianity. Peace; love; social justice; forgiveness; helping others; Ten Commandments.27 Hinduism. Following duty (dharma); performing good actions, which take a person toward a better rebirth (karma); searching for the absolute unchanging reality behind everyday appearances; release from the cycle of rebirth and suffering (moksha) is achieved when a person replaces their ignorance with wisdom; living according to the code of conduct or duty that governs a person’s life.
66
Kevin T. Jackson
Islam. Life is sacred and deserves respect; showing respect for others, the community; honesty; patience; trustworthiness; charity; equality with the poor; social responsibilities, involving respect for parents, neighbors and the community; obligation, for those who can afford it, to give at least two and one-half percent of savings and other valuables every year to the poor (zakah); dressing modestly; avoidance of anything, such as extramarital affairs, that might threaten family life; women and men are not usually allowed to mix freely. Baha’ism. World unity; peace; justice; end to religious and racial prejudice; uniting humanity by bringing all the faiths of the world into harmony. Confucianism. Becoming a good citizen; attempting to achieve “beautiful conduct;” respecting the dignity of humanity; being considerate to others; respecting ancestors; aiming for harmony and balance in all things, avoiding extremes of emotion and behavior; living in peace and harmony with others; living in contact with spiritual forces of the universe, including those of nature. Jainism. Showing the greatest respect for all forms of life; harming no living thing; happiness can never come from material things.
Moral imagination Obviously, it is not meaningful to compile a catalogue of spiritual principles and values from around the world and treat it as a comprehensive guide for corporate executives and managers in business decisionmaking. What then, is the relevance of such principles and values to international business ethics? I believe they are most relevant in providing moral insight in the hardest cases: situations in which a company’s explicit language from its code of conduct does not solve the dilemma at hand, or situations in which judgment must be based on a deep awareness and cultural sensitivity. Many spiritual-based principles are presupposed and endorsed by established legal and
ethical principles for international business – just as, say, many general moral principles (frequently encrypted as constitutional principles, such as due process of law, and general common law principles, for instance, freedom of contract), are presupposed and endorsed by specific laws and statutes in the United States legal system. For example, many international initiatives for transnational corporations today require that companies respect the human rights of workers and consumers in host countries in which they operate. Such human rights, in turn, are grounded in spiritual principles and values such as respect for life, equality of all people, helping others in need, and avoiding harm to others. The underlying relational sequence that I am highlighting is as follows: Law controls/directs/guides Business Morality controls/directs/guides Law Spirituality controls/directs/guides Morality Therefore, Spirituality controls/directs/guides Business.
More often than not, the directive of a code is not enough, and a manager or executive needs to exercise moral imagination to act ethically. Being in touch with spiritual principles and values helps to stimulate the moral imagination, and can provide a greater depth of understanding of many ethical problems that arise in international settings. For instance, consider the problem posed by a manager faced with a practice common in Middle Eastern countries, of forbidding men and women from riding on an elevator together. If a manager knows that women employees from a company in the United States will be visiting its subsidiary in Abu Dhabi, should they be advised to follow the local practice and step off the elevator if a man is aboard? That admonition, if set out as a precept for women employees to follow in Western countries, would amount to a form of gender-based segregation, violative of many laws and moral norms respecting equality in the workplace. One problem, however, is that it is misleading to view the social practice involved here in isolation from its spiritual and religious grounding. On the other hand, simply because a practice is based upon spiritual values does not necessarily make it morally legitimate.
Spirituality as a Foundation for Freedom and Creative Imagination In The Ethics of International Business, Thomas Donaldson provides an analytical framework for executives and managers to use in dealing with such conflict-of-norm dilemmas. The conflict situation arises when the multinational corporation confronts a practice that is legal/moral in the host country, yet illegal/immoral in the home country. For instance, Saudi Arabia forbids women to work as managers, and women’s employment opportunities are restricted to the fields of health care and education. Such restrictions on employment opportunities are banned in the United States, and most other countries, by antidiscrimination legislation. Or, a corporation might face strict EPA regulations for firms doing business in the U.S., yet also operate in a host country, such as China, with relatively lax environmental standards. Donaldson’s ethical algorithm distinguishes Type 1 conflicts from Type 2 conflicts. In a Type 1 conflict, the lower level of economic development of the host country plays a role in the host’s view that the practice is legally/morally permissible. For Type 2 conflicts, however, the moral reasons underlying the host’s view that the practice is permissible are independent of the host’s level of economic development. Instead, the moral reasons are grounded in religious or cultural values of the host country, for instance, those which influence the Saudi Arabian limitations on women’s employment. If the conflict is Type 1, a “rational empathy” test is used. Under this test, the practice is impermissible if members of the home country would not, under conditions of economic development relevantly similar to those of the host country, regard the practice as permissible. If, on the other hand, the conflict is Type 2, the practice is impermissible if either of the following are true: (i) it is possible to conduct business successfully in the host country without undertaking the practice; (ii) the practice is a direct violation of a fundamental international human right. Donaldson’s framework is based on a kind of “ethical positivism” which assumes that there are pre-existing legal and ethical norms available to resolve the controversy, which it is the task of the executive or manager to discover and then apply to the problem at hand. In the case of the
67
conflicting norms about women’s employment, the ethical algorithm would dictate that the conflict be interpreted as Type 2, since the moral reasons underlying the host’s view that the practice is permissible are independent of the host’s level of economic development and are instead, based on cultural and religious beliefs. Accordingly, Donaldson’s methodology would entail inquiry into whether the limitations on women’s employment and the rules prescribing gender segregation in elevators constitute a clear violation of a fundamental international human right. I have argued elsewhere that there is a problem with this kind of algorithmic interpretation of fundamental international rights, since it is highly controversial which international rights are “fundamental” and which are “nonfundamental.”28 The point to recognize here is of a different orientation. While it is true that existing legal and ethical norms do indeed conflict, those norms in turn are supplemented by more general spiritual principles and values. While some of these more general principles and values also conflict amongst different cultures and religious traditions, many of them intersect and converge as between different cultures and religions. Thus, comparing the Saudi Arabian norms to the Western norms with regard to the spiritual principles and values that each presupposes and endorses, one can appreciate that what each viewpoint has in common is the quest to respond to hard questions. Each viewpoint is traceable to a broad inquiry about what matters so much to a person that one cannot live without it, cannot be a whole person without it. In addressing this question about the meaning of life and the meaning of the sacred, some religions and cultures diverge in their interpretations of how to demonstrate respect and concern for others, and how to respect the sacredness of life. So even though religions and cultures differ about the weight they accord to core human values and principles, they often agree about the existence of those same human values and principles. In other words, they may be divided in specific practice while united in general spiritual quest. I would therefore advocate that executives and managers be as aware of these principles and values as they are
68
Kevin T. Jackson
of applicable laws and conventional ethical standards. In this vein, one may reflect on these lines of Nikolay Aleksandrovich Berdyaev: There is such a thing as moral imagination, which creates the image of a better life; it is absent only from legalistic ethics. No imagination is needed for automatically carrying out a law or norm. In moral life the power of creative imagination plays the role of talent. By the side of the self-contained moral world of laws and rules, to which nothing can be added, humankind builds, in imagination, a higher world, a free and beautiful world, lying beyond ordinary good and evil. And this is what gives beauty to life.29
In his book on international business ethics, Competing With Integrity in International Business, Richard De George has stressed the importance of moral imagination, not only in coming up with creative and novel ways for dealing with difficult moral dilemmas, but also in undertaking business practices that go beyond the conventional minimal standards for international companies. The creation by Rev. Leon Sullivan of the Sullivan Principles as a means for multinational companies to respond to the problem of apartheid in South Africa is an example of moral imagination. De George also discusses Merck & Co.’s efforts to research, develop, and give the drug ivermectin to Third World countries as an instance of moral imagination. A drug could be developed to cure river blindness, which afflicts millions of people in less developed countries, but Merck found that the governments of such countries were too poor to afford to purchase it. And international institutions were either unwilling or unable to underwrite the costs of the drug. Merck & Co. assumed responsibility for creating and then distributing the drug, although no legal requirement made them do so, nor did any conventional principle of “minimal morality” for multinational companies require such morally exemplary behavior. The Merck decision is most admirable, not because it promoted the economic and competitive advantage of the corporation – even though it seems to have accomplished that – but because it was a moral decision that promoted
human life, and was undertaken at the voluntary internal intitiative of the company, as a compassionate and heartfelt response to the suffering of millions of people in desperately vulnerable circumstances. In this sense, the decision brings to mind the following words of Albert Schweitzer:30 I cannot but have reverence for all that is called life. That is the beginning and foundation of morality. Reason and heart must act together if a true morality is to be established. Herein lies the real problem for abstract ethics as well as for practical decisions of daily life. We need not fear that an ethic based on reason is geared too low, that it may be too detached and heartless. For when reason reaches the core of the matter it ceases to be cold reason, whether it wants to or not, and begins to speak with the melody of the heart. And the heart, when it tries to fathom itself, discovers that its realm overlaps the realm of reason.
Notes 1
In a recent review of five years of articles published in Business Ethics Quarterly, LaRue Tone Hosmer finds that writers on business ethics have mainly business, social scientific, and philosophical backgrounds. In addition he finds that a mere 5.7% of articles surveyed cited compassion-based ethics – identified with religious sources – as a foundational normative theory. See, L.T. Hosmer, “5 Years, 20 Issues, 141 Articles, and What?” Business Ethics Quarterly Vol. 6, No. 3 ( July 1996). 2 Within the last decade, a general trend has emerged in the United States towards increasing fines for organizations and individuals convicted of felony offenses. The U.S. Sentencing Commission was established by Congress in 1984 in the wake of criticism that too much judicial discretion existed in sentencing and that disparities were present as between sentences handed down for “white collar” crimes and sentences for other crimes. Accordingly, in 1987 the Commission set out Federal Sentencing Guidelines for individual lawbreakers. The guidelines provided at least some incarceration for almost every felony offender, and limited judicial discretion in sentencing. Then, in 1991 the Commission imposed an additional set of guidelines for organizations convicted of federal
Spirituality as a Foundation for Freedom and Creative Imagination crimes. The crimes encompassed by the guidelines include antitrust, bribery, fraud, money laundering, and tax offenses. Thus, with more corporate leaders becoming aware of the need for organizational ethics, many are developing ethics programs. See, Lynn Sharp Paine, “Managing for Organizational Integrity,” 106 Harvard Business Review (1994). The Sentencing Guidelines establish fines on the basis of factors such as the existence of a prior record of similar misconduct, reporting, investigating and accepting responsibility for the crime, cooperating with authorities, and having an effective compliance program in place to prevent and detect unlawful behavior. Thus, corporations have a powerful incentive for developing effective legal compliance programs. See, Best, Cole and Darland, “Complying With Sentencing Guidelines, 19 National Law Journal (1992); Slater, “Sentence Yourself: Corporate Defendants Can Affect Their Own Fines Under New Guidelines,” 83 ABA Journal (1992); Strauss and Sackman, “Corporate Compliance Programs: An Ounce of Prevention,” How To Handle Internal Investigations and Establish Successful Compliance Programs (Practicing Law Institute, 1992). 3 The OECD Guidelines are reprinted in 15 I.L.M. 967 (1976). 4 The World Health Organization has adopted a resolution requesting that member countries put smoking control strategies in place, and that they establish a national “focal point” to support, stimulate, and coordinate smoking control measures. See, Tobacco or Health?, United Nations World Health Assembly (World Health Organization, New York, 1986). 5 The World Health Organization’s Infant Formula Code imposes various restrictions on the distribution and marketing of breast-milk substitutes. The Code covers such practices as advertising, labeling, distributing samples, and the conduct and compensation of personnel involved in selling and marketing infant formula. 6 The International Code of Conduct for the Transfer of Technology, a product of the United Nations Conference on Trade and Development (UNCTAD), defines the contractual obligations of parties engaged in transferring technology. It contains rules governing negotiating, contracting, as well as post-contract activities. Upon request by a receiving country, the country furnishing technology must provide specific data on various elements of the the technology as needed for technical and financial evaluation of the technology. 7 The Food and Agricultural Organization promul-
69
gated the International Code of Conduct in the Distribution and Use of Pesticides. The Code establishes standards for the marketing and use of pesticides, particularly in less developed countries. 8 The Committee on Shipping, under the aegis of the United Nations Conference on Trade and Development (UNCTAD) is attempting to reconcile the policies of various governments with respect to international shipping. UNCTAD has formulated the Code of Conduct for Liner Conferences (1974). The Code restricts international competition as between two nations with a provision that shipping lines in each one will receive forty percent of the traffic, whereas twenty percent will be open to international competition. In addition, UNCTAD has produced the Convention on International Multimodal Transport of Goods (1980). See, Everyone’s United Nations (United Nations, New York, 1986), p. 246. 9 See, “Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy,” 15 NB 92-2-101896-2 (1978). 10 U.N. Doc. A/CONF. 62/WP.10/Rev. 1 (1979), reprinted in 18 I.L.M. 686 (1979). 11 34 U.N. GAOR, Supp. (No. 20) 33, U.N. doc. A/34/20 Annex II (1979). 12 The European Union has standards on preparation of annual financial reports. There are Directives that cover accounting categories, asset valuation rules, auditing procedures, capitalization of companies, and inflation accounting. Another Directive requires corporations to make public financial reports on their subsidiary operations. The reporting requirements depend on the level of parent company ownership, and are applicable regardless of whether the controlling company is headquartered within the EU. 13 The United Nations Commission on International Trade Law drafted the Contracts for the International Sale of Goods, which serves as a model statute for drafting international sales contracts based on Article II of the Uniform Commercial code. 14 See, e.g., H.L.A. Hart, The Concept of Law (Oxford University Press, 1961). For a contrary point of view, see Anthony D’Amato, “Is International Law Really ‘Law’?” 79 Northwestern University Law Review (1985). See also, Kevin T. Jackson, “A Cosmopolitan Court for Transnational Corporate Wrongdoing: Why Its Time Has Come’, 17 Journal of Business Ethics (May, 1998). 15 See, William Shaw, Business Ethics (1991) at 33–34. 16 See J. Braithwaite, Corporate Crime in the Pharmaceutical Industry (Routledge, Kegal Paul, London, 1984).
70 17
Kevin T. Jackson
See, Barbara Crossette, “Bhopal’s Tragedy Revisited: Ten Years After the Gas, No End to Tears,” New York Times, December 11, 1994 at Section 4, p. 5; Sanjoy Hazarika, “In India’s City of Death, Time Has Healed Little,” New York Times, December 2, 1994 at A4. 18 See, Sherri Prasso and Larry Armstrong, “A Company Without a Country?” Business Week, May 5, 1997. 19 See, e.g., Esther C. Tanquintic, “U.S. Labor Department Notes Need For Code of Conduct to Stem Growing Problem of Child Labor,” Businessworld, May 21, 1997, p. 18; U.S. Department of Labor, The Apparel Industry and Codes of Conduct: A Solution To the International Child Labor Problem? Bureau of International Labor Affairs, 1996. 20 See, J. Braithwaite, Corporate Crime in the Pharmaceutical Industry (Routledge, Kegal Paul, London, 1984); Andy Chetley, The Baby Killer Scandal (War on Want, London, 1979). 21 See, James Russell, “U.S. Sweatshops Across the Rio Grande,” 50 Business and Society Review (1987); La Rue Tone Hosmer, Moral Leadership in Business (Irwin, Boston, 1994) pp. 61–66. 22 James M. Gustafson, Ethics From a Theocentric Perspective (Chicago: University of Chicago Press, 1981) at 71. 23 Among the principles endorsed by the Unitarian Universalist Association are the following: respecting the inherent worth and dignity of every person; promoting justice, equity and compassion in human relations; seeking a world community that accords peace, liberty and justice for all; enabling a free and responsible search for truth and meaning. See, Bylaws of the Unitarian Universalist Association, General Assembly, 1995.
24
Thomas Donaldson, “Values in Tension: Ethics Away From Home,” Harvard Business Review, September–October 1996 at 53. 25 Quoted in Donaldson, supra. Esperanto is an artificial international language that is constructed on the basis of shared words common to main European languages. 26 Susan Meredith, World Religions (Usborne, 1995); Carl Hermann Voss, In Search of Meaning: Living Religions of the World (World Publishing Company, 1968). 27 In Western nations, religious ethics have explicitly influenced business ethics through numerous laws that concern business practices. For example, blue laws that regulate the hours of business are premised upon the commandment to “remember the Sabbath day, and keep it holy;” laws protecting property rights are based upon the commandment “you shall not steal;” and laws forbidding fraud in business transactions are grounded in the commandment “you shall not bear false witness against your neighbor.” 28 Kevin T. Jackson, “Jurisprudence and the Interpretation of Precepts for International Business,” 4 Business Ethics Quarterly, Vol. 4, No. 3 (1994) at 296–297. 29 Nikolay Aleksandrovich Berdyaev, The Destiny of Man. 30 Albert Schweitzer, “Reverence for Life,” in Jaroslav Pelikan, ed., The World Treasury of Modern Religious Thought (Little, Brown, 1990).
Schools of Business, Fordham University, New York, NY