Making Companies Safe - what works? (CCA ... - Unite the Union

self-regulation through the adoption of codes of conduct or ‘corporate social responsibility’
initiatives 13 – is largely ineffective in bringing about improved standards of health, safety or
environmental performance. For instance, in a wide-ranging review of the regulation of
workplace safety in 1999, Gunningham and Johnstone find “significant evidence of the limits
of voluntarism”. 14 In particular, one major study on environmental protection from the
Netherlands found that companies were not motivated to introduce safety management
systems until legislation had been put in place. Wright observes in relation to these findings that,
“there is a cost-benefit argument that legislation is needed to encourage
systematic management and that more broadly… there is evidence of
mandatory requirements being effective”. 15
Recent research by the OECD on the effectiveness of voluntary approaches for environmental
policy concluded that the environmental effectiveness of voluntary approaches is often
questionable, and that their economic efficiency is generally low. The researchers found that
it was highly unlikely that most of the voluntary approaches contributed much to emission
reductions and that achievements often did not exceed a ‘business as usual’ scenario, except
in those cases where ‘credible threats’ were incorporated into the approach if targets were
not met. The researchers also found that combining voluntary approaches with other types of
instruments (for example, permitting systems, subsidies, related taxes and charges and
emission trading systems) tended to weaken the effectiveness of the latter instruments. In
other words, where participation in emissions trading systems, for example, was voluntary
many businesses chose not to ‘opt-in’ to the schemes. 16
Further support for the importance of law and regulation in bringing about real changes in
corporate behaviour comes from the experience and research of NGOs, labour rights activists
and trade unions. NGOs were instrumental in getting multinational companies to adopt
voluntary workplace codes of conduct. However, many human rights NGOs are increasingly
realising the limitations of both voluntary codes of conduct and ‘corporate social
responsibility’ initiatives in national and international contexts.
A number of case studies have shown that Corporate Social Responsibility (CSR) programmes
adopted by multi-national and transnational corporations have not brought any tangible
benefits to the workers and communities adversely affected by their operations. 17 Similarly,
the experience of workers in developing countries is that many companies are simply failing
to properly implement their codes of conduct within individual workplaces, and that workers
are wholly unable to protect their rights in the absence of the possibility either of legal/ state
enforcement or of trade union enforcement and organising structures. 18 Thus, one observer
has commented:
“We have put too much emphasis on codes and probably too much emphasis on
voluntary enforcement. It is untenable to expect companies to enforce their
codes voluntarily.” 19
As a consequence of these failures, and as observed in a recent letter to Patricia Hewitt signed
by more than 20 leading charities in the UK:
“CSR is coming under growing attack from different quarters on the basis that it
is not delivering results. Recent reports from think tanks and civil society
organisations call into question the effectiveness of existing initiatives”. 20
20
One example of this is research published in March 2004 by the consultancy Article 13. It said
that less than 3 per cent of FTSE 350 firms have acted seriously on challenges such as climate
change, waste and poverty. 21 Another example is the chemical industry’s ‘Responsible Care’
program - a voluntary self-regulatory program set up by the industry in response to a loss of
public confidence in the US chemicals sector. The stated aim of the program is to: “reduce
chemical accidents and pollution, [and] to build public confidence through improved
performance, continuous improvement and increased communication.” 22 However, research
in the early 1990s demonstrated that firms which relied on Responsible Care alone did not
achieve better environmental performance. 23 And more recently, research in the US has
shown that the number of chemical ‘accidents’ each year (including worker fatalities and