Is corporate responsibility now standardised?
With all the codes, frameworks, books, management venn diagrams and corporate speak out there, an alien coming to earth with a specialist interest in corporate sustainability might think so.
But it’s not. The ethics of a firm are still a matter of subjectivity in many cases.
The case of lawyers/Ecuadorians vs. Chevron is probably the most high profile example today.
If you haven’t followed the story, it’s worth reading up about.
For some, it’s ‘Chernobyl in the jungle’ which must be paid and accounted for. For others, it’s trial lawyers funded by hedge funds and private investors to screw money from a giant corporation.
The latest coverage is here, from the FT.
In short, an Ecuadorean court has upheld an $18bn environmental damages award against Chevron.
One “commentator” in the FT article expects the company to have to shell out $2-3 billion to eventually settle the 18-year old case.
The legal judgement is all about who should be responsible for jungle pollution from poorly-managed oil extraction dating back 40 odd years or more, and the results of that for communities and the environment.
Note the Wikipedia health warning: “The neutrality of this section is disputed“.
You’ll find that Wikipedia comment on many other areas concerning now ‘classic’ cases of activists vs. corporations that are still running. Dow vs. Bhopal campaigners, Amnesty vs. Shell in Nigeria. There are others too. These three cases are possibly the longest running and best known.
The Chevron/Ecuador case is long, complicated, and filled with what some people might call ‘dirty tricks’ on both sides.
Others might call them smart tactics, mistakes, legal maneuvers and rebuttals.
What you think, inevitably, depends on how you view the case and its history and ramifications.
This New Yorker piece, which looks more at the lawyer fighting Chevron and some of his mistakes in campaigning, provides some valuable insight.
(Take note though: Not all the information surrounding the case is included, so don’t take this as the gospel truth)
What’s my point here? Twofold I suppose:
1) This case, and many others documented on business-humanrights.org, demonstrate both that perceptions of what corporate ethics look like are still very mixed, depending on where in the world things happen, and who you ask.
Republicans in the US (and perhaps most of your board!) will probably view it as corporate extortion, whilst left-leaning folks see it was a test case for indigenous rights and small countries vs. large corporations.
This is not new, but still relevant: It’s important to remember that perception and subjectivity count for more than codes, management systems and corporate speak. We perhaps forget that sometimes.
2) If you are looking for evidence to demonstrate that corporate environmental/human rights risks are growing, and that they can emerge unexpectedly and drag on for years, damaging your reputation, this case provides good evidence. Risks like this are growing, and not just for oil & gas companies.
So whilst you can’t change the past, you can react to it well should an issue arise, given the Ruggie framework which now exists.
Here’s a video about this, and the business and human rights agenda in 2012: