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What is the responsibility of a company for improving human rights ?

A corporation does have spcial responsibilities, but precisely what they are is not alay clear.
This is particulary so with respect to china. A multinational company’s social responsibilities
of human right in that country depend upon many variables.

For example, there are numerous non-chinese entities wwith influences in china aside
from mncs, including other nation, the united nations, and nongoverment organizations such
as human rights groups. Each has some responsibility, but how much?

An inportant factor in determining the responsibility of an mnc is the type of human

rights in question. For example, a company has responsibility for orker rights associated with
employment, such as safety conditions, but not for the chinese government using prison

The government is far more sensitive to criticism of the latter type of human rights
than the former. As michael a. Santoro of rutgers graduate school of management write:

The right of workers to minimum wages, safe working conditions, and limited working hours
are not as problematical for the chinese government as the rights to association and
expression. Hence, when foreign companies uphold minimal labor standars thoght business
partner term of engagement, the risk of alienating the chinese government is not nearly as
great as when companies attemp to uphold the political rights of chinese worker.

However, the human rights issues may be extremely difficult for a company when the
government seeks its help in enforcing a penalty for a orker’s exercise of freedom of speech
or association contrary to government rules. Santoro says executives of mnc’s “need not
concern themselves with human rights violations that have nothing to do with the firm’s
operations.” But what the government insists?

Multinational firms employ only a small percentage of all workers in china and
encounter only a small fraction of human rights abuses. Furthermore, few if any mnc’s are
invulnerable to retaliation from the chinese government. The typical mnc is week, therefore,
in its ability to influence the government to change its actionnrespecting human rights outside
the workplace. China is interested in attracting foreign capital and seems little concerned
with the workingconditions set up bymnc’s as long as the companies do not get involved in
political promotion of human rights.

Santoro suggest what he called a “fair share” theory of corporate responsibility for
human rights issues in china. This theory requiers an allocation of responsibility among
majorities operating there. As noted above, mnc’s do have responsibilities, particularly
thoseconserting working condition in their organizations. The greatest influence on human
rights conditions in china, however, rests with international instituitions......
Reason for leaving china

The more important reasons for leaving were

 Staying in china means tolerating a climate of repression inconsistent with the

company’s fundamental values
 More and more customers of Levi Strauss’s product are concerned with human rights,
and if the company stays in china, the brand loyalty to Levi Strauss could be seriously
 Economic problems in china are increasing costs of operations.
 China offers little protection from piracy of intellectual property, patents, or products.
 Political instability is always possible in China

The final Decision

The broad decided to phase out contracting in China and make no direct investments
but to continue to buy fabric until the company’s sourcing guidelines were reviewed for these

Levi Strauss Decides to Return to China

The company announced on April 8, 1998, that it would end its self-imposed
restrictions on manufacturing in mainland China. Actually, Levi Strauss never completely
withdrew. Through contractors in Hong Kong, it produced in China 800,000 units a year,
compared with over 2,600,000 a year at the time of the pullout. More important reasons for
restoring full operations in China were

 Since Hong Kong was now a part of China, where the company had continued
operations, the decision to expand operations was compelling.
 The company believed it could find business allies who would honor the Levi Strauss
 To not return to China would threaten the commercial interests of the company
because competitors would solidify a foothold in this fast-growing economy.
 The 1993 decision was intend to change human right policies in china nor to impose
Levi Strauss’s values on others. It was essentially a business decision. So is te
decision to return.

Reaction of Activists

Fifty-one human rights organizations and activists sent Haas a letter expressing deep
disappointment in the decision. They said the human rights situation in China was worse than
when the company left in 1993. Among other recommendations, the group wrote that if Levi
Strauss did business in China it should disclose the subcontractors it uses together with such
data as wages and work shours. It should also allow independent human rights groups to
verify compliance with the company’s code of conduct.
David Samson, vice president of communication for Levi Strauss, replied to the lettr and
explained some of the reasons for the return. In addition, he said, “if we return, we will move
back in a measured and cautious way. If we can’t operate in ways consistent with our values,
we won’t be there any long period of time,” Charles Kernaghan, executive director of the
National Labor Commitee, said, “it sound like Looney Tunes to me that they think they can
go in there and guarantee the rights of these workers.”

Not all activists, however, were critical. For example, Han Dangfang, a prominent
Chinese labor activists who formed the first indepedent labor union during the Tianamen
Square uorising, said that “he believed that the company could do more good by providing
jobs in China, rather than by shunning the country.”