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Limits to
Corporate Social Responsibility While
there are very few "socially responsible corporations", there do exist a few
exceptions. Ben & Jerry's is one of the most famous examples. This company buys the
Brazil nuts for its Rainforest Crunch ice cream from peoples living in the Amazon rain
forest. These buying policies are designed to demonstrate the economic viability of
environmentally sustainable practices and to reduce the financial incentives for
inhabitants to clear cut the forest.143 Esprit is another prominent exception. This clothing company, for
example, supports a cottage industry in impoverished West Virginia where they employ 30
Appalachian women knitting sweaters from organic wool, and Esprit pays these women three
times what other farmers are earning for their wool.144
Even the few socially responsible corporations, however,
occasionally engage in harmful activities. For example, despite its good reputation and
its impressive sourcing guidelines, Levi Strauss still operated a plant in Mexico called
Maquillas Internacionales where company employees knew terrible working conditions
existed.145 Although Esprit has received numerous awards for its corporate
responsibility, the United States Department of Justice raided one of its subcontractor's
factories last year in San Francisco where the employees were owed 127,000 dollars in
wages, were paid below the minimum wage and received no overtime pay.146
Relying upon these examples, some critics of TNCs contend
that no "socially responsible corporations" truly exist. However, such criticism
seems misguided and extreme. Supervising every aspect of a multinational enterprise is
obviously quite difficult. While Esprit and Levi Strauss might not be perfect, they can
still be considered "socially responsible corporations".
These improprieties, however, demonstrate that
transnational corporations — even the most socially responsible ones — cannot
always be expected to unilaterally promote social development. It must not be forgotten
that "corporations exist to pursue their own profit maximization, not the collective
aspirations of society. They are commanded by a hierarchy of managers, not by democratic
deliberation." 147
The profit-making telos of transnational
corporations will usually compel them to subjugate all other issues to the pursuit of
money — even if it means sometimes breaking the law. In a study of Fortune 500
companies, from 1975 to 1984, 62 per cent were involved in one or more "significant
illegalities", 42 per cent in two or more and 15 per cent in five or more.148 If large corporations cannot be expected to obey the law, they can
hardly be expected to foster social development and social integration. As Indonesian
labour organizer, Fauzi Abdullah, aptly described the activities of Reebok, a company that
has recently established subcontracting guidelines as well as an international human
rights award:
" Don't confuse human rights with marketing. Reebok isn't the worst company
here, but that doesn't mean they're good guys... Their main purpose is to exploit low
wages here. They're not looking for ways to help the people who make their shoes."149
143 43. Scott and Rothman, 1992, p. 55.
144 44. Udesky, 1994, p. 665.
145 45. Ibid., p. 666.
146 46. Ibid., p. 665. The Department of Justice also raided subcontractor
manufacturers making clothes for The Gap, Banana Republic and Ralph Lauren (ibid, p. 667).
147 47. Greider, 1992, p. 331.
148 48. Ibid., p. 352.
149 49. Zuckoff, 1994a.
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