Here’s a sad truth: The displacement of indigenous populations as a result of international corporate development projects is a relatively common practice. A mining or agricultural company needs land, so a deal is struck with a corrupt government providing land to the corporation, whether or not it is occupied. Those with the misfortune of living in the way of the project are forced to leave, under the threat of violence or an approaching bulldozer; development begins while insufficient attention is paid to environmental concerns, leading to the pollution of local water sources; people die, either from disease or violent clashes with security forces.
Sound familiar? It should, because in weakly-governed states in Africa, Asia and South America, where governments are more interested in attracting (and siphoning off) foreign investment than in protecting the land or the people, this happens every day.
The story of the Cerrejón mine in the the Guajira region in Colombia is one such story, and it carries a simple lesson: In La Guajira, Colombia, the resource beneath the ground is more valuable than the people who live above it.
Last week, the Supreme Court heard oral argument in Young v. UPS, a case that could change the way pregnant women are treated by their employers. The case will force conservative justices to choose between two core right-wing constituencies: anti-choice activists and pro-business groups.
In 2006, Peggy Young was in her fifth year as a part-time driver for UPS, a position which required her to move mostly envelopes and small packages. When she became pregnant, her doctor advised her against lifting more than 20 pounds for the duration of her pregnancy. UPS policy requires all drivers to be able to lift up to 70 pounds at a time, so Young asked the company if she could be put on “lighter duty” while pregnant — i.e., if she could answer phones or work a desk job — which UPS provided for employees who were (i) disabled, (ii) had been injured on the job or (iii) had lost their commercial driver’s license.
UPS denied Young’s request, reasoning that pregnancy was neither a disability nor an on-the-job injury and therefore did not warrant a lighter-duty assignment. Instead, she was put on immediate unpaid leave and lost her benefits — including her health insurance — for the next nine months.
Yesterday was the “International Day for the Abolition of Slavery.” Though many of us may consider slavery only a cruel and shameful historical relic, forced labor still generates upwards of $150 billion each year. In other words, modern slavery is, as it was in antebellum America, Big Business. This past fall, for example, millions of men, women, and children across Uzbekistan were forced by the government to leave their homes, jobs, and schools in order to pick cotton for the state. The same thing happens every cotton harvest in Uzbekistan, contributing to the country’s position as one of the world’s leading cotton exporters. Laborers are paid almost nothing, and refusal can be met with public humiliation, violence, or the loss of one’s job or place in school.
Overview of the Uzbek system
Uzbekistan exports nearly one million tons of cotton each year, earning the government a yearly profit of more than a billion dollars and a spot as one of the top five cotton producing countries in the world. It does so by forcing its citizens to do the picking for little-to-no remuneration (about six cents per kg harvested). In 2013, as many as five million Uzbek citizens — or 16 percent of the population — were forced to pick cotton.
On Nov. 18, PBS aired “Firestone and the Warlord,” the result of a joint Frontline-ProPublica investigation into the relationship between the Firestone tire company and Liberia’s former president and convicted war criminal, Charles Taylor. ProPublica also published a lengthy companion piece under the same title, drawing upon hundreds of interviews and scores of never-before-seen documents. The result is an exhaustively researched and fresh look at the vital role played by a major international corporation in supporting one of Africa’s most brutal dictators.
Firestone’s history in Liberia
Firestone first came to Liberia in the 1920s, seeking to exploit the country’s vast rubber resources. In 1926, it opened the rubber plantation that, 66 years later, would serve as Charles Taylor’s base for directing his brutal assault on Monrovia, Liberia’s capital.
Firestone’s Liberian rubber plantation was considered to be the world’s largest and was a key asset for a company that, after being swallowed up by Bridgestone in 1988, began to experience cash-flow problems. So, despite generating just $16 million in revenue in 1989 (the year before the start of Liberia’s civil war), the plantation’s 15 percent profit margin represented a much-needed “bright spot on a corporate ledger drowning in red ink.” The plantation provided roughly 40 percent of the latex in America at the time.
Our ability to transition from fossil fuels to renewable sources of energy will likely determine the fate of the planet. Some countries are making progress toward this goal, using solar, wind and water power. In the historic deal struck on Wednesday between the U.S. and China, for instance, China pledged that solar and wind power would account for 20 percent of China’s total energy production by 2030. Denmark, which aims to completely eliminate its use of fossil fuels by 2050, will rely on its cutting-edge wind power industry. Germany has focused on solar and wind power in its push to remake its electricity system, and Brazil now derives more than 75 percent of its electricity from hydro-power sources.
Yet, the real ‘solution’ to global warming may lie in a fourth renewable energy source, and one about which we typically hear almost nothing: nuclear fusion.
Nuclear fusion isn’t new. In fact, the oldest thermonuclear reactor is approximately 13 billion years old or the approximate age of the universe and the first star. Our most popular fusion reactor is the sun. Explaining the real science behind nuclear fusion is best left to the experts, but the short of it is that fusion, the reaction that gives stars their energy, is the opposite of fission. Whereas nuclear fission creates energy by splitting one atom into two, fusion does it by joining two (hydrogen) atoms together to create one (helium), and the resulting reaction releases neutrons and an unbelievable amount of energy.
As it turns out, this is quite difficult, because in order to get the nuclei of two hydrogen atoms to fuse, one must defeat the protons’ natural tendency to repel each other. Overcoming this tendency requires temperatures of over 100 million Kelvin (~six times hotter than the temperature at the sun’s core) and incredibly high pressure. The prevailing method for accomplishing this is known as magnetic confinement, using a reactor known as a tokamak, and it is impossible to understand. (There’s also another method that involves lasers, and it is even more confusing.)
Humans have been experimenting with nuclear fusion since the 1950s, and the scary amount of energy released by a fusion reaction was the impetus for the hydrogen bomb. As our own RP Siegel pointed out, the goal of those working to turn nuclear fusion into a renewable energy source — as opposed to a weapon — is to take the science behind the H-bomb and control it, thereby allowing for the gradual (and self-sustaining) release of energy. Unfortunately, doing this has heretofore proved impossible.
Last month, German sportswear giant, The Adidas Group (Adidas), quietly released its “Third Party Complaint Process for Breaches to the Adidas Group Workplace Standards or Violations of International Human Rights Norms” (the Process). Although the document is not perfect, and it is impossible to fairly evaluate the process without examining how it functions in practice, Adidas appears to have created a strong grievance mechanism that passes muster under the United Nations Guiding Principles on Business & Human Rights.
What did Adidas do?
Introduction: The document containing the new Adidas Process opens with a bold pronouncement: “The Adidas Group is committed to operating as a sustainable business which is environmentally sound, respects human rights and ensures fair, safe and healthy working conditions across our global supply chain.” The Process was designed to help Adidas satisfy these commitments.
In the years since the United Nations Guiding Principles on Business & Human Rights (Guiding Principles) were unanimously endorsed by the U.N. Human Rights Council in 2011, groups like Shift and the International Corporate Accountability Roundtable (ICAR) have worked hard to educate businesses on how the Guiding Principles impact their operations and influence their decision-making. Much of this guidance has been sector specific, and rightly so. Human rights are not impacted uniformly or in the same ways across industries, and companies in the extractive, apparel or ICT sectors, for instance, arguably operate in “riskier” environments than businesses in other industries.
Yet, despite playing major roles in drafting, advising and acting on the Guiding Principles, lawyers had thus far been offered little help understanding the impact of the Guiding Principles on their work. Last week, the International Bar Association (IBA) did its part to rectify that, issuing guidance — the first of its kind — to bar associations, private lawyers and law firms about how to integrate the Guiding Principles into their work. This is a welcome first step in what should be a broad discussion among lawyers and bar associations regarding the role of lawyers in the implementation of the Guiding Principles.
In case you still weren’t sure how you felt about labor practices in Cambodia’s growing apparel manufacturing sector, maybe this will help get you off the fence. According to a short video posted by VICE News last week, female sex workers arrested in Cambodia are being forced into jobs in the country’s infamously inhumane garment industry. If this is true, what to make of it?
The VICE documentary
Here’s how the claim arises in VICE’s “The High Cost of Cheap Clothes” mini-documentary, in which VICE founder, Suroosh Alvi, travels to Cambodia’s capital to investigate “what is happening to those swept up in the country’s trafficking crackdown.” The video opens with Alvi reminding us that, although Cambodia is one of the capitals of the sex tourism industry, the country has been cracking down on the sex trade since 2008 when, at the supposed behest of the U.S., the government initiated an “aggressive” anti-trafficking and prostitution campaign.
Alvi’s investigation takes him first to a ride along with the anti-trafficking unit of the Ministry of the Interior, which quickly turns into the raid of a building allegedly housing sex traffickers. The raid leads to a few very young-looking women (girls?) being handcuffed. Over screams and much crying, we are shown a tiny room, barely illuminated by a creepy, red light. On the floor are a few mattresses and a roll of toilet paper. “This is about as dark as it gets,” Alvi says.
After the girls have been rounded up, Alvi turns to one of the cops and asks, “Where will you take the girls?” The cop responds that they will first be brought to the “anti-trafficking department,” then on to the unfortunately named “re-education training department.”
And now we have arrived at what Alvi tells us is the “crux” of Cambodia’s anti-trafficking program.
On an average day, I waste a shameful amount of water. So do you. We all do, and we do it while hundreds of millions of people in other parts of the world live in “water poverty,” consuming less water in an entire day than most of us use flushing the toilet a few times.
I learned all of this when I decided to take DIGDEEP’s “4 Liters Challenge” — a pledge to use a total of only 4 liters of water for one entire day. The challenge was not pleasant. Far worse than the experience was coming to terms with just how much water we waste.
Does the 4 Liters Challenge sound hard? I actually wasn’t sure until I put it in context. First, most of us use nearly 4 liters of water — in other words, all of the water allotted in the challenge — every time we wash our hands or face. Most Americans use more than 400 liters of water (!) every single day, or 100 times what the challenge requires. A single toilet flush uses about 6 liters of water, and a mere three flushes amounts to more water than most other people in the world use all day to clean, cook, drink and bathe. The average dishwasher uses 23 liters of water, and running the water while you brush your teeth could waste 9 liters. The all important shower? Newer shower models use about 9.5 liters of water every minute, so a quick, five-minute shower uses about 47.5 liters of water and a 10-minute shower — a little longer than the average — uses (wastes?) almost 100 liters.
On Monday, Walmart held its second semi-annual Global Sustainability Milestone Meeting — webcast live and re-aired the following day — and announced a new pledge to help create a more sustainable food system. Taken at face value, the country’s largest food retailer appears to be making a real commitment to help develop a healthier, more affordable, and less environmentally damaging food supply. Walmart’s real legacy in this area, though, will be measured by how much concrete action follows its ambitious commitments.
At the outset of the milestones webcast, the company’s CEO, Doug McMillon, proclaimed that in order to meet the population’s increasing food demands, Walmart and its suppliers need to become more sustainable players in the global food supply chain. According to this new commitment, Walmart will aim to achieve this by ensuring that the food it sells, and the supply chain from which that food comes, is: (i) more affordable (to the environment, society, and customers); (ii) safer and more transparent; (iii) healthier; and (iv) more accessible.
Like many corporate marketing efforts, in both the webcast and the company’s concurrent announcements it is difficult to parse the genuine commitments from the hollow promises; the real passion from the empty rhetoric meant to patronize the most environmentally conscious consumers and NGOs.
To look strictly at its pledges, Walmart sure seems to acknowledge that bold action is required if it is to contribute to reversing the trends of environmental degradation and resource scarcity. The company, which claims that environmental sustainability is now an “essential ingredient” in its business model, already says that it strives to sell only products that “sustain people and the environment.”
So, how exactly is the company planning to increase the sustainability of the food it buys and sells?
Last week, the U.S. State Department announced that the government would develop a National Action Plan to “promote and incentivize responsible business conduct,” in line with the United Nations Guiding Principles on Business and Human Rights (UNGPs). Once complete, the U.S. will join the U.K., the Netherlands, Denmark, Italy and Spain as the only states to have released National Action Plans on business and human rights (BHR NAPs). According to the U.N. Working Group on Business and Human Rights, Switzerland and Finland are also in the process of developing their own plans.
The announcement comes in advance of official United Nations guidance on the subject, promised by the U.N. Working Group for December 2014, which ought to inform the U.S. process. While this news may barely register on the radar of even those most interested in corporate social responsibility, organizations like Human Rights Watch, Human Rights First and the International Corporate Accountability Roundtable (ICAR) have been publicly pushing President Barack Obama to develop a BHR NAP for some time. (ICAR is also working with the Danish Institute for Human Rights on a larger NAP project that aims to provide guidance for governments in the development, implementation, and review of BHR NAPs.)
What is a BHR NAP and why does it matter?
In short, a BHR NAP is a policy document that explains how a particular state intends to go about fulfilling its duty to protect human rights from corporate abuse. In general, NAPs are useful tools in the advancement of any particular policy objective in that, among other things, they tend to mobilize various stakeholders, promote collaboration and outline the parameters of expected action. Three years after the United Nations Human Rights Council unanimously endorsed the UNGPs, it called on all Member States to develop BHR NAPs in order to promote the implementation of the UNGPs within each state’s national legal framework.
In a sense, the creation of a NAP is akin to the crucial step of domestic implementation of a treaty or other international instrument (and the future of the rights or obligations it purports to protect/enforce), including international human rights treaties, like the International Covenant on Civil and Political Rights (ICCPR), or those creating international institutions, like the Rome Statute and the International Criminal Court (ICC).
By ratifying the ICCPR, for instance, the U.S. committed to “prevent and protect against discrimination and ensure equal treatment for all … without any limitations or exceptions.” Yet, domestic implementation of the ICCPR has been lacking. Who, for instance, can argue that the federal government has come close to accomplishing this (admittedly lofty) aim?
A group of eight international fashion retailers, including H&M, Inditex (the owner of Zara) and Britain’s Primark, announced last week that they would support fair living wages for Cambodian garment workers and were prepared to factor such wages into their pricing. The official support came just days after the Cambodian government, for the second time this year, deployed armed troops in response to rallies by garment workers seeking higher minimum wages.
On Sept. 17, thousands of textile workers gathered in and around Cambodia’s capital, Phnom Penh, demanding a significant increase in the monthly minimum wage, from $100 to $177. A previous demand for a wage hike to $160 had been rejected by employers, who earlier this year raised wages to $100 from around $80. Importantly, no incidents of violence against either police or protesters were reported, in contrast to the government’s response to a January 2014 protest, when Cambodian troops opened fire on striking workers — killing at least four and injuring many more.
The retailers’ commitment
H&M and the other retailers made their support for the garment workers known in a letter to the deputy prime minister and the chairman of the local Garment Manufacturers Association, written just one day after the latest protests. The letter states that “[w]orkers in all production countries have a right to a fair living wage.” As such, going forward the retailers’ “purchasing practices will enable the payment of a fair living wage and increased wages will be reflected in our prices.” The retailers also wrote that they expect and will support “the installation of an annual industry collective bargaining process for wages that is fair and takes into account the [International Labor Organization’s] technical expertise.”
(The letter goes on to note, however, that the retailers anticipate that the higher cost of wages will be offset by remedying perceived inefficiencies in Cambodian factories. The letter is also light on specifics and does not explicitly endorse the workers’ demand for $177/month or any other particular figure.)
In 1981, the United Nations Educational, Scientific and Cultural Organization (UNESCO) designated Australia’s Great Barrier Reef a World Heritage Site. Just 25 years later, however, UNESCO warned that climate change and other anthropogenic causes were threatening the reef’’s existence. In fact, according to a 2012 report by the Australian Institute of Marine Science, the reef has lost over half of its coral in the past quarter-century.
Earlier this year, UNESCO’s World Heritage Committee noted that conservation efforts at the reef were making some progress, but that significant dangers still remained. The committee encouraged the Australian government to submit an updated progress report by early 2015, which the committee would consider when determining whether or not the reef deserves placement on the List of World Heritage in Danger.
Earlier this week, the Australian and Queensland governments released a draft of the Reef 2050 Long-Term Sustainability Report, which they hope will allay UNESCO’s concerns. Critics, however, think bolder action is required.
The quest to hold corporations liable for alleged human rights abuses committed abroad was dealt another blow late last month when a New York District Court judge tossed the last of the apartheid-related cases pending against two American corporations, Ford and IBM.
In a begrudging bow to current precedent, U.S. District Judge Shira Scheindlin, of the Southern District of New York, denied plaintiffs’ motion to amend their complaint because they would be unable to meet the stringent demands of a test announced by the Second Circuit Court of Appeals earlier in the year. More importantly, if the law of the Second Circuit becomes the law of the land, U.S. corporations could be effectively immune from civil liability for violations of international law that are perpetrated exclusively by foreign subsidiaries on foreign soil.
The Alien Tort Statute and a refresher on the Supreme Court’s Kiobel decision
The Alien Tort Statute (ATS) grants jurisdiction to U.S. District Courts “of all causes where an alien sues for a tort only in violation of the law of nation or of a treaty of the United States.” As I described in an earlier piece for TriplePundit, the question of the ATS’ application to corporations is muddy. In the seminal 2013 case, Kiobel v. Royal Dutch Petroleum (Kiobel), the Supreme Court affirmed the dismissal of a suit brought by Nigerian citizens who alleged that Shell and other oil companies aided in the Nigerian government’s violent suppression of resistance to drilling operations in Nigeria. In affirming the holding of the Second Circuit, the majority held that, because all of the alleged human rights abuses occurred abroad, the plaintiffs could not overcome the presumption against the application of U.S. law to conduct occurring outside of the U.S. (aka “extraterritorial” application).
“Touch and concern”
In Kiobel’s most important passage, the Court added that:
[E]ven where [plaintiffs’] claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application. Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices. (my emphasis)
The Supreme Court did not define the all-important phrases, “touch and concern” or “sufficient force,” leading lower courts and pundits to fight about whether or not the opinion completely closed the door to lawsuits against corporations that allegedly violated international law in a country other than the U.S. Further confusing the matter is that the Second Circuit, in its decision in the Kiobel case, held that the ATS “simply does not confer jurisdiction over suits against corporations,” and though the Supreme Court did not appear to go this far, it did affirm the Second Circuit’s holding.
Thus, after Kiobel, whether and/or how a corporation could be held liable under the ATS remains an open question.
A few weeks ago, Class A shares of Warren Buffett’s Berkshire Hathaway topped a staggering $200,000 a share. Berkshire, which came in at No. 4 on the latest Fortune 500 list, has 300,000 employees spread across 59 subsidiaries, and more cash on hand — $55.5 billion — than any other company in America. Its market value is roughly $330 billion, and it is often cited as one of the “most admired” companies in the world. Berkshire has achieved all of this in the fashion of an old-school American conglomerate, refusing to focus on just one sector or industry. As a result, Berkshire’s stock and subsidiary portfolios include such behemoths as American Express; Burlington Northern Santa Fe; Coca-Cola; GEICO; Heinz; IBM; Walmart; and Wells Fargo, to name just a few.
Yet, the company’s growth has slowed: Over the last five years, it underperformed the S&P 500 for the first time in its history — and Berkshire skeptics question whether such a large and tentacular entity can continue to thrive without its Oracle-in-Chief. Lawrence Cunningham, a law professor at George Washington University and author of the thoughtful “Berkshire Beyond Buffett: The Enduring Value of Values” (Columbia Business School Publishing), is betting that it can. While Cunningham’s book works quite well as a testament to Warren Buffett’s unassailable vision and leadership, as well as to what Berkshire embodies and may continue to embody after Buffett, it comes up a bit short as an argument for why Berkshire’s greatness will outlive its leader.