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Conference News: Promoting Corporate Responsibility in Developing Countries: The Potential and Limits of Voluntary Initiatives

1 Oct 2000



One of the most hotly debated and politically controversial topics in the field of economic development is that of the regulation of international firms. This UNRISD-organized workshop brought together approximately 30 specialists from different sectors-academic, business, NGO, trade union-as well as representatives of international organizations, to engage in this debate.

E.V.K. FitzGerald presented a paper on the regulating of international firms. Corporate conduct on labour and environmental issues is regulated only at the national level, and international standards of corporate responsibility in developing countries depend on voluntary initiatives at best. Today, market incentives rather than legal requirements constitute the basis for compliance. FitzGerald suggested that a better approach would be a multilateral definition of the obligations of international firms.

In her presentation, Leah Margulies posed the question "In the absence of enforceable law, how useful are codes and certification schemes in promoting corporate accountability and sustainable development in developing countries?". She noted that codes and certification schemes are but two of many strategies being used to hold large firms accountable for their activities. They must not be seen as a substitute for legislation, union organizing and grassroots pressure for responsible corporate practices.

Next, Rhys Jenkins examined the role of corporate self-regulation and codes of conduct in the global market economy. The social and environmental impacts of big business are increasingly regarded as matters of corporate responsibility, for which companies themselves or their trade associations should set standards. In his presentation, Jenkins raised some of the limitations, potential benefits and dangers of this growing emphasis on corporate codes of conduct.

There were also sessions devoted to country-level evaluations of corporate social and/or environmental responsibility. Melody Kemp presented her work in Indonesia; Martin Perry discussed Singapore and Malaysia; David Barkin gave an overview of the situation in Mexico; Francisco Magno presented the Philippines; and David Fig discussed the South African case.

Finally, participants shared ideas on priorities for future work in this area, as well as substantive and methodological aspects related to research UNRISD expects to commence next year.