New Paper Posted: Global Corporate Social Responsibility (GCSR) Standards With Cuban Characteristics: What Normalization Means for Transnational Enterprise Activity in Cuba

(Pix © Larry Catá Backer 2015)

At the 25th Annual Meeting of the Association for the Study of the Cuban Economy, I was fortunate enough to participate in a panel on "International Economic Topics" (see here).

I have just posted the paper from that presentation: Global Corporate Social Responsibility (GCSR) Standards With Cuban Characteristics: What Normalization Means for Transnational Enterprise Activity in Cuba.  The paper considers some of the ramifications of Cuba's normalization of relations with the United States.  In the paper I try to think about what normalization might mean for Cuba in the context of its re-engagement in global economic activity.  Much has changed since the 1960s, and Cuba has been instrumental in crafting the new normative economic order.  But it remains detached.  What happens when it seeks to attach itself in a world in which emerging normative systems of business and human rights may not be wholly in sync with the ideological parameters and practices of the Cuban state?  That presents some complex issues that I try to identify and explore, at least in a preliminary way.

Links to the PowerPoint used for the presentation may be accessed here.

The abstract follows and may be accessed via SSRN HERE.

Comments and discussion welcome.

Global Corporate Social Responsibility (GCSR) Standards With Cuban Characteristics: What Normalization Means for Transnational Enterprise Activity in Cuba

Larry Catá Backer

ABSTRACT: The 2014 move toward normalization between the U.S. and Cuba has substantial repercussions beyond the scope of the terms of their rapprochement. For the economic, political and legal sectors, these repercussions touch on legal or societal constraints of global standards faced by MNEs seeking to operate in Cuba. The projection of these global standards within Cuba may pose difficulties and produce pressure for legal-economic reform within Cuba. Those pressures may be particularly acute with respect to issues now understood as subjects of corporate social responsibility: transparency/disclosure, human rights, employment/industrial relations, environmental issues, bribery/corruption, consumer protection, technology transfer, anti-competitive schemes, and taxation. While the principle obligation of enterprises is to comply with local law, these emerging global standards may substantially compromise the relationship between local law and global obligations. This paper suggests the issues that may face Cuba and enterprises, including U.S. based enterprises, in the wake of normalization. After the introduction, Part II considers briefly the local legal and political context in which enterprises may operate in Cuba, with particular focus on Ley No. 118/2014 (De la Inversión Extranjera), and its contextualization within the legal structures of Cuban macro-economic policy. Part III then outlines two important standards systems for global CSR with effect in Cuba, the OECD’s Guidelines for Multinational Enterprises and the U.N. Guiding Principles for Business and Human Rights. Part IV then considers the ways in which MNEs may have to approach their investment activities in light of these standards, the pressures for change they might produce, and the adverse effects their adverse effects on MNE decisions to invest or operate in Cuba.