Thursday, September 23, 2010

Conflating Economics and Politics, Security and Prosperity--President Obama Addresses the United Nations

It was once commonly understood that Marxist-Leninists and their progeny tended to conflate politics and economics, using law as an instrument of the necessary politics of the vanguard forces those control and leadership of the state would produce movement toward  the establishment of a proper Marxist state.  On the other hand, the good solid burgers that made up the  political leadership of Western democratic institutions kept these spheres separate to preserve liberty and the rule of law.  Cf. Morton Horwitz, "Comment: The History of the Public/Private Distinction," 130 U. Penn. Law Review 1423 (1982).  But that once clear distinction has been eroded as the logic of economic globalization has been institutionalized within normative orders in which politics is undertaken by states through interventions in private markets and private actors acquire substantial public obligations, especially in those territories where the state apparatus is weak.  But the conflation of economics and politics, and the expression of that conflation through law,  can have consequences far beyond the structuring of transnationals communities and the rules of their behavior.   

It should come as no surprise, then, that the logic of this sort of conflation ought to extend to war and economics, expressed through legal frameworks,  as well.  This conflation, and its ramifications for assertions of state power through law was made quite clearly in the recent address of the American President, Barack H. Obama, before the United Nations General Assembly. Remarks by the President to the United Nations General Assembly, United Nations Building, New York, New York, Sept. 23, 2010. This short essay provides a close reading of that address focusing on the consequences of this now banal  but once extraordinary conflation.

Mr. Obama starts with the admission that crisis produces an environment within which substantial changes are plausible. The opening does more than that-it suggests a multi vectored commonality--across time, space and condition.  
We know this is no ordinary time for our people.  Each of us comes here with our own problems and priorities.  But there are also challenges that we share in common as leaders and as nations.
We meet within an institution built from the rubble of war, designed to unite the world in pursuit of peace.  And we meet within a city that for centuries has welcomed people from across the globe, demonstrating that individuals of every color, faith and station can come together to pursue opportunity, build a community, and live with the blessing of human liberty.  Remarks by the President to the United Nations General Assembly, supra.
The opening theme is commonality born of crisis.  That commonality and crisis is centered on the experiences of the United States.  It is grounded in the sense that this commonality is built on security and prosperity--inseparable halves of a whole around which the community of states, under the leadership of the American Republic, must construct an institutionalized managerial regime.  "It is our destiny to bear the burdens of the challenges that I’ve addressed -- recession and war and conflict.  And there is always a sense of urgency -- even emergency -- that drives most of our foreign policies.  Indeed, after millennia marked by wars, this very institution reflects the desire of human beings to create a forum to deal with emergencies that will inevitably come."  Id.

The inseparable character of prosperity and security is suggested by Mr. Obama by advancing a fundamental proposition--that the political conflict launched against the United States and the global effects of the collapse of the American economy that followed must be understood in tandem.
Outside the doors of this hall, the blocks and neighborhoods of this great city tell the story of a difficult decade.  Nine years ago, the destruction of the World Trade Center signaled a threat that respected no boundary of dignity or decency.  Two years ago this month, a financial crisis on Wall Street devastated American families on Main Street.  These separate challenges have affected people around the globe.  Men and women and children have been murdered by extremists from Casablanca to London; from Jalalabad to Jakarta.  The global economy suffered an enormous blow during the financial crisis, crippling markets and deferring the dreams of millions on every continent.  Id.
But not only must these be understood as strands of a single whole, but the two together represent the greatest threat to the integrating global order and its normative structures by suggesting an alternative equilibrium--one grounded in traditional divisions among global communities.
Underneath these challenges to our security and prosperity lie deeper fears:  that ancient hatreds and religious divides are once again ascendant; that a world which has grown more interconnected has somehow slipped beyond our control. Id.
With a jab at the prior administration which Mr. Obama found impossible to resist ("These are some of the challenges that my administration has confronted since we came into office." Id.), Mr. Obama suggests the legal and political consequences of managing prosperity and security as an inseparable whole, under American leadership.  "And today, I’d like to talk to you about what we’ve done over the last 20 months to meet these challenges; what our responsibility is to pursue peace in the Middle East; and what kind of world we are trying to build in this 21st century." Id.

Mr. Obama starts with a recitation of the critical role he has played in the rescue of the American (and global) economy and the importance of that effort in the protection of global prosperity (" I have had no greater focus as President than rescuing our economy from potential catastrophe.  And in an age when prosperity is shared, we could not do this alone.  So America has joined with nations around the world to spur growth, and the renewed demand that could restart job creation." Id.).   These efforts have a substantially legal face.  But not in the form of law within domestic legal orders, as a reformation of the governance structures of the global communities with derivative effects on national law. 
We are reforming our system of global finance, beginning with Wall Street reform here at home, so that a crisis like this never happens again.  And we made the G20 the focal point for international coordination, because in a world where prosperity is more diffuse, we must broaden our circle of cooperation to include emerging economies -- economies from every corner of the globe.  Id.
Mr. Obama thus embraces a new form of supra national governance in which law assumes a secondary and derivative position.  I have suggested the importance of these efforts in the construction of new governance frameworks.  See, Larry Catá Backer, Private Actors and Public Governance Beyond the State: The Multinational Corporation, the Financial Stability Board and the Global Governance Order (August 13, 2010), 17 Indiana Journal of Global Legal Studies -- (forthcoming 2011). This is viewed by Mr. Obama as a work in progress ("We have resisted protectionism, and are exploring ways to expand trade and commerce among nations.  But we cannot -- and will not -- rest until these seeds of progress grow into a broader prosperity, not only for all Americans, but for peoples around the globe." Remarks by the President to the United Nations General Assembly, supra.).

Yet prosperity cannot be efficiently managed without asserting an appropriate management of security.  Mr. Obama masterfully turns the American efforts against certain Islamist communities as a global effort to combat unruly and bandit forces with the turn of a phrase.   
As for our common security, America is waging a more effective fight against al Qaeda, while winding down the war in Iraq.  Since I took office, the United States has removed nearly 100,000 troops from Iraq.  We have done so responsibly, as Iraqis have transitioned to lead responsibility for the security of their country. . . .  While drawing down in Iraq, we have refocused on defeating al Qaeda and denying its affiliates a safe haven.  In Afghanistan, the United States and our allies are pursuing a strategy to break the Taliban’s momentum and build the capacity of Afghanistan’s government and security forces, so that a transition to Afghan responsibility can begin next July.  And from South Asia to the Horn of Africa, we are moving toward a more targeted approach -- one that strengthens our partners and dismantles terrorist networks without deploying large American armies. Id.
But this management of "extremists" requires the casting of a larger regulatory net--one that invokes law regimes more directly.   "As we pursue the world’s most dangerous extremists, we’re also denying them the world’s most dangerous weapons, and pursuing the peace and security of a world without nuclear weapons."  Id.  The legal aspects of these efforts are centered on the formalities of nuclear non proliferation.  "Earlier this year, 47 nations embraced a work-plan to secure all vulnerable nuclear materials within four years.  We have joined with Russia to sign the most comprehensive arms control treaty in decades.  We have reduced the role of nuclear weapons in our security strategy.  And here, at the United Nations, we came together to strengthen the Nuclear Non-Proliferation Treaty."  Id.

And thus, Mr. Obama turns to that other "extremist" group--those who control the state apparatus of Iran, now nicely conflated (in turn) with the extremists against which military action is appropriate in Iraq and Afghanistan. Prosperity, security, the marginalization of the extremist element in the global community and the legal framework within which this is managed is made clear.
As part of our effort on non-proliferation, I offered the Islamic Republic of Iran an extended hand last year, and underscored that it has both rights and responsibilities as a member of the international community.  I also said -- in this hall -- that Iran must be held accountable if it failed to meet those responsibilities.  And that is what we have done.
Iran is the only party to the NPT that cannot demonstrate the peaceful intentions of its nuclear program, and those actions have consequences.  Through U.N. Security Council Resolution 1929, we made it clear that international law is not an empty promise.
Now let me be clear once more:  The United States and the international community seek a resolution to our differences with Iran, and the door remains open to diplomacy should Iran choose to walk through it.  But the Iranian government must demonstrate a clear and credible commitment and confirm to the world the peaceful intent of its nuclear program. Id.
This iron fist of legal process oriented and globally engaged America also has a softer side.  It provides charity to its friends to pair prosperity with security.  Pakistan and Haiti are advanced as crucial examples of the benefits of conformity and consequential American largesse. This managerial approach, grounded in prosperity and security, and fueled by the positive power of  community building among peoples apparently incompatible, when forced to live together (the myth of New York referenced rhetorically at the start of the speech), is then offered as the medicine necessary for the "solution" of the "problem" of Jewish territorial self determination in the Middle East.
 I hear those voices of skepticism.  But I ask you to consider the alternative.  If an agreement is not reached, Palestinians will never know the pride and dignity that comes with their own state.  Israelis will never know the certainty and security that comes with sovereign and stable neighbors who are committed to coexistence.  The hard realities of demography will take hold.  More blood will be shed.  This Holy Land will remain a symbol of our differences, instead of our common humanity. 
I refuse to accept that future.  And we all have a choice to make.  Each of us must choose the path of peace.  Of course, that responsibility begins with the parties themselves, who must answer the call of history.  . . . . Now, peace must be made by Israelis and Palestinians, but each of us has a responsibility to do our part as well.  Those of us who are friends of Israel must understand that true security for the Jewish state requires an independent Palestine -- one that allows the Palestinian people to live with dignity and opportunity.  And those of us who are friends of the Palestinians must understand that the rights of the Palestinian people will be won only through peaceful means -- including genuine reconciliation with a secure Israel.  Id.
And thus the deal--some sort of homeland for (non-Jewish) Palestinians but only by securing the acceptance of a Jewish Israel.
Israel is a sovereign state, and the historic homeland of the Jewish people.  It should be clear to all that efforts to chip away at Israel’s legitimacy will only be met by the unshakeable opposition of the United States.  And efforts to threaten or kill Israelis will do nothing to help the Palestinian people.  The slaughter of innocent Israelis is not resistance -- it’s injustice.  And make no mistake:  The courage of a man like President Abbas, who stands up for his people in front of the world under very difficult circumstances, is far greater than those who fire rockets at innocent women and children.  Id.
Yet applause was reserved only for half of the equation:  "This time, we should draw upon the teachings of tolerance that lie at the heart of three great religions that see Jerusalem’s soil as sacred.  This time we should reach for what’s best within ourselves.  If we do, when we come back here next year, we can have an agreement that will lead to a new member of the United Nations -- an independent, sovereign state of Palestine, living in peace with Israel.  (Applause.)" Id. To this, Mr. Obama can offer only a set of rhetorical questions: "But even as we confront immediate challenges, we must also summon the foresight to look beyond them, and consider what we are trying to build over the long term?  What is the world that awaits us when today’s battles are brought to an end?  And that is what I would like to talk about with the remainder of my time today." Id.

And the reminder of the governance framework of human rights on the combined enterprises of prosperity and security.  "The idea is a simple one -- that freedom, justice and peace for the world must begin with freedom, justice, and peace in the lives of individual human beings.  And for the United States, this is a matter of moral and pragmatic necessity."  Id.  But it is also a legal necessity--and another justification for the marginalization and coercive approach to managing the Taliban, among others.  "Human rights have never gone unchallenged -- not in any of our nations, and not in our world.  Tyranny is still with us -- whether it manifests itself in the Taliban killing girls who try to go to school, a North Korean regime that enslaves its own people, or an armed group in Congo-Kinshasa that use rape as a weapon of war."  Id.    

Again, the rhetorical trope of the myth of New York is invoked, in its aspects of unity of principles amid functionally inconsequential differences in implementaiton.  
As I said last year, each country will pursue a path rooted in the culture of its own people.  Yet experience shows us that history is on the side of liberty; that the strongest foundation for human progress lies in open economies, open societies, and open governments.  To put it simply, democracy, more than any other form of government, delivers for our citizens.  And I believe that truth will only grow stronger in a world where the borders between nations are blurred.  Id.
There is a strong irony here.  This theme is not Mr. Obama's, but rather that of his predecessor, Mr. Bush.  This passage could have been ripped from the text of Mr. Bush's second inaugural address.  And to the sane effect.   Larry Catá Backer, President Bush's Second Inaugural Address: A Revolutionary Manifesto For International Law in Chaotic Times, Law at the End of the Day, April 1, 2006.  And like Mr. Bush, Mr. Obama would have the Americans manage the process of difference within a contained field of basic organizing principles.
America is working to shape a world that fosters this openness, for the rot of a closed or corrupt economy must never eclipse the energy and innovation of human beings.  All of us want the right to educate our children, to make a decent wage, to care for the sick, and to be carried as far as our dreams and our deeds will take us.  But that depends upon economies that tap the power of our people, including the potential of women and girls.  That means letting entrepreneurs start a business without paying a bribe and governments that support opportunity instead of stealing from their people.  And that means rewarding hard work, instead of reckless risk-taking.  Remarks by the President to the United Nations General Assembly, supra.
This framework has a governance dimension.  "Yesterday, I put forward a new development policy that will pursue these goals, recognizing that dignity is a human right and global development is in our common interest.  America will partner with nations that offer their people a path out of poverty.  And together, we must unleash growth that powers by individuals and emerging markets in all parts of the globe."  Id.

For this purpose, civil society ought to be engaged--but only under the leadership of the state and its apparatus.  The leadership principle of Marxist Lenininst states ((领导)) is deployed in an ironic way to create a hierarchy of responsibility and management within global communities in which the state in general, and the most powerful states in particular, retain a governance pride of place.
Open society supports open government, but it cannot substitute for it.  There is no right more fundamental than the ability to choose your leaders and determine your destiny.  Now, make no mistake:  The ultimate success of democracy in the world won’t come because the United States dictates it; it will come because individual citizens demand a say in how they are governed.  Id.
The nature of the new governance suggests the power of control of framing principle (in the hands of powerful states) while the appearance of independence of action is left intact among those who must apply principle (but may apply it flexibly).  It is in this way that flexibility is managed--and contained.  And in this way Mr. Obama can suggest, accurately, that "Each of these countries gives life to democratic principles in their own way. " Id.  Yet none of these states controls the framing principles (democracy, personal liberty, human rights and human rights interpretation) whcih each must naturalize within their domestic legal orders.
The common thread of progress is the principle that government is accountable to its citizens.  And the diversity in this room makes clear -- no one country has all the answers, but all of us must answer to our own people.
In all parts of the world, we see the promise of innovation to make government more open and accountable. . . . And when we gather back here next year, we should bring specific commitments to promote transparency; to fight corruption; to energize civic engagement; to leverage new technologies so that we strengthen the foundations of freedom in our own countries, while living up to the ideals that can light the world. This institution can still play an indispensable role in the advance of human rights. . . . It’s time for every member state to open its elections to international monitors and increase the U.N. Democracy Fund. Id.
And thus Mr. Obama returns to community.  "The world that America seeks is not one we can build on our own.  For human rights to reach those who suffer the boot of oppression, we need your voices to speak out.  . . .  That belief will guide America’s leadership in this 21st century.  It is a belief that has seen us through more than two centuries of trial, and it will see us through the challenges we face today -- be it war or recession; conflict or division."  Id.  But this is a community in which American leadership is paramount--precisely because the Americans represent  the world in the construction of a society built by immigrants from all over the world.  In this sense the United States represents a chosen people--a microcosm of the world and thus chosen to represent the world and its movement toward a "better future."  The New York myth trope thus acquires a normative dimension.
It falls to us to fulfill that promise.  And though we will be met by dark forces that will test our resolve, Americans have always had cause to believe that we can choose a better history; that we need only to look outside the walls around us.  For through the citizens of every conceivable ancestry who make this city their own, we see living proof that opportunity can be accessed by all, that what unites us as human beings is far greater than what divides us, and that people from every part of this world can live together in peace.   Id.
This is not a new idea.  Mr. Obama made this point before, in his famous 2009 Cairo speech.  See, Larry Catá Backer, Mr. Obama Speaks in Egypt: "Islam is a Part of America"--The Ummah Wahida, and the State in Two Distinct World Orders, Law at the End of the Day, June 5, 2009.

Mr. Obama thus continues to emphasize the themes of management, consensus, engagement and conflation, all within a framework in which the United States retains a significant role in the construction of framing elements.  He continues to develop the theme that the United States is a mirror of the world, and as its mirror in the mot legitimately authoritative position to reflect and elaborate the guiding principles that ought to bind the international community.  But he has refined that position as well--providing an American concession to governance beyond law, and to the conflation of economics and politics, with respect to the management of which law will play an important instrumental role, but not the only one in the management of states, of global markets, of interactions between public and private actors and of the subordination of religious and ethnic groups all bent to the construction of a well managed global community functionally unified and apparanty distinct.  


Wednesday, September 22, 2010

Corporate Social Responsibility at the International Bar Association Annual Meeting in Vancouver, Canada

John Sherman and Craig Phillips, Co-Chairs of the International Bar Association corporate Social Responsibility Committee will be organizing two exciting panels for the annual meeting next month in Vancouver, Canada. 
OECD Guidelines for Multinational Enterprises – what every international lawyer needs to know about possible upcoming changes
Tuesday 5 October, 1500–1800, Room 207, Level 1
Session Chair
John Sherman

Are the OECD Guidelines for Multinational Enterprises still relevant to today’s global economy? Do they provide adequate guidance to companies? Does their complaint process work? What are the proposals for their reform? This session will attempt to answer these and other questions.
 
The Guidelines were last revised in 2001, and cover a wide range of business conduct in such areas as disclosure, employment, environment, anti-corruption, consumer interest, science and technology, competition and taxation. They are now being scrutinised for changes in response to concerns that they are outdated and don’t reflect the concerns of the current global economy in a variety of areas, including human rights, supply chains, distance selling, climate change, and anti-corruption, among others. In addition, National Contact Points (NCPs) – appointed in each OECD country to resolve allegations that companies have violated the Guidelines – have been criticised as underutilised and ineffective.

An IBA Working Group has submitted comments both to the UK NCP and to the OECD to revise the Guidelines and improve the NCP process. Other groups, including business, labour, and civil society, have filed their own comments.

This session presents an invaluable opportunity for international lawyers to learn more about the OECD Guidelines and how any revisions might affect their clients.
For full details click here.
 
Cowboys from Calgary and Denver – natural resource companies’ corporate and social accountability
Joint session with the Mining Law Committee
Thursday 7 October, 1500–1800, Room 217 & 218, Level 2
Session Co-Chairs
Craig Phillips
Ignacio Randle Estudio Randle, Buenos Aires, Argentina; Vice-Chair, Mining Law Committee; Council Member, Energy, Environment, Natural Resources and Infrastructure Law Section (SEERIL)
 
The Special Representative to the UN Secretary General for Business and Human Rights characterised the initial operations of North American mining companies in the Andes Region of Latin America as being run ‘by cowboys who thought they’d never left Denver or Calgary’ who ’made a mess of things’ until they were forced to change their practices. The corporate and social accountability of natural resource companies has therefore been under increasing global scrutiny. Some companies have learned the hard way that securing a legal license to operate does not include the social license also necessary to operate. Canada, for example, is engaged in a vibrant and robust national debate on the accountability of Canadian mining companies for their operations in developing countries, whose content has business and legal significance for natural resource companies worldwide. Other extractive industries face similar challenges! , including calls for the creation of an ombudsman office to investigate and assess complaints for violations, the enactment of eligibility criteria for government political and financial support, and the imposition of sanctions, among others. This panel will address these and other related highly timely issues, using the Canadian debate as a starting point.
For full details click here.

In addition to the two sessions that the Committee is sponsoring, you might also be interested in two other sessions that address CSR-related issues.

Model mining development agreement and community concerns
Monday 4 October, 1000–1300, Room 202, Level 2
Joint session of the Mining Law Committee and African Regional Forum
For full details click here.
 
Environment responsibilities of resource companies under host country and home country laws – the growing demand for extraterritorial liability – case studies and options for reform
Wednesday 6 October, 1000–1800, Room 204, Level 2
Environment, Health and Safety Law Committee session
For full details click here.
 
IBN social responsibility special edition, August 2010

The Co-Chairs note that, for those of you who have not already seen the August edition of the International Bar News, we strongly encourage you to do so. It’s entitled 'Do the right thing – Social responsibility special edition'. In it, IBA President Fernando Peláez-Pier states that:
Business around the world can have positive and/or negative effects on human rights. The legal profession must assist our clients in being proactive – and not defensive – in taking the necessary steps to avoid the violation of particular rights and to avoid being complicit in human rights abuses. Lawyers have an obligation to assist their clients in supporting and respecting the protection of internationally proclaimed human rights.
The special edition is devoted to themes that are at the heart of the CSR Committee’s values, and reflects much of the Committee’s work. It includes a transcript of the live webcast interview in April of Professor John Ruggie, the Special Representative of the UN Secretary General on Business and Human Rights by John Sherman. It also encourages IBA members to look at an online video series produced for lawyers by the IBA and the UN Global Compact – the world’s largest corporate citizenship initiative – with the generous support of LexisNexis.

Lawyers as Leaders video series

The video series, entitled Lawyers as Leaders: The Essential Role of Legal Counsel in the Corporate Sustainability Agenda, consists of four modules, each dealing with one of the four core themes of the UN Global Compact – human rights, labour, the environment and anti-corruption. Each module contains interviews with top legal officers of multinational companies and interviews with worldwide experts on the subject matter. President Peláez-Pier strongly recommends that all IBA members watch the videos.

The first video module, on human rights and business, was released in June 2010 at the Global Compact summit meeting in New York. It contains interviews with and comments by Debra Valentine, Group Executive, Legal and External Affairs of Rio Tinto; Mark Nordstrom, Senior Labour & Employment Counsel of General Electric; Professor Ruggie; Georg Kell, the Executive Director of the Global Compact; John Sherman, Navanethem Pillay, UN High Commissioner for Human Rights; and Caroline Rees, Director of the Governance and Accountability Programme of the CSR Initiative at the Harvard Kennedy School of Government. The remaining videos will be released in coming months.

On the IBA side, the series was created and produced by CSR Committee member Rachel Nicolson of Allens Arthur Robinson in Melbourne, Australia and John Sherman. Ken Thompson, General Counsel of LexisNexis, who will become CSR Committee Co-Chair in 2011, will be recorded for the forthcoming anti-corruption video.

Corporate catastrophe and Corporate Social Responsibility

The IBA website contains an excellent discussion of the CSR and litigation implications of the tragic Deepwater Horizon explosion and oil spill. One of the core questions arising out of this disaster is how companies can be better prepared to predict and deal with such catastrophes. In a paper linked to the front page of the website entitled Whose risk is it? Viewing corporate catastrophe through a human rights lens, John Sherman argues that viewing the probability of a disaster through the eyes of potential victims external to the company will improve the company’s ability to predict, prevent, and respond to such ‘black swan’ risks!

OECD Guidelines revisions

The Committee has also been deeply involved in forthcoming revisions to the OECD Guidelines for Multinational Enterprises, and was requested by the UK Government and the OECD to file comments, which have been widely and favourably regarded as among the most detailed and thoughtful. The comments, filed earlier this year, were the work of a 21-member IBA Working Group chaired by John Sherman and consisting of members from eight IBA Committees, over half of whom were CSR Committee members: Kala Anandarajah, Alice de Jonge, Jan Eijsbouts, Jan Handzlik, Thomas Hickey, Tzvi Levinson, Rebecca Fe de Montreve-McMinn, Susan Poffley, Javier Robles, John Southalan, Suzanne Spears, Chief Fassy Adetoukunboh Yusuf and Wayne White.

The OECD Guidelines for Multinational Enterprises can be found here.
The OECD Consultation can be found here.
The full IBA WG response can be found here.

Friday, September 17, 2010

The University and the Panopticon: Naturalizing "New" Governance Forms for Behavior Control Beyond Law

How do institutions with governance authority respond to  behaviors considered a problem, or a threat to the stable social order or social goals to be encouraged among its populations?  Traditionally, the responses of governance bodies would rely heavily on the conventional tools of government:  command and sanction.  In the form of law or regulation, coupled with enforcement and judicial procedure, these techniques have served the state and its subsidiary units with the principal methods for commanding subject populations and managing their behaviors.  But the last part of the 20th century saw the rise of new methods of governance--methods that bypassed law as inefficient and clumsy in favor of more subtle but comprehensive techniques.  These techniques are meant to operate on the bodies of the objects of governance, to weave a complex net of expectations, perspectives, and exposures,  and to naturalize cultures and expectations of exposure of even the most intimate activity.  The methodologies of these forms of governance were once methods of enforcing direct command through law.  

Today method provides the basis for substantive regulation without the need to declare the substance of the regulation itself.  In the form of  information  harvesting, publication and management--grounded on its utility for the development of judgment and the application of consequences--governance has come to be understood as a technique of management rather than of law.  It becomes most successful when it disappears into the background of cultural assumptions and expectations of the managed population.  As culture rather than as regulation, the state can also appear more benign, and the iron fist of control covered in the velvet of management that is self effected.   Observation, publication and judgment now serve as more effective instruments of governance than commands published in a register and administered haphazardly by an overwhelmed administrative and enforcement apparatus of the state.   And thus the panopticon has come to serve the state and related governance units, to extend the efficient control of subject populations in an efficient and more successful way.   For what can be more successful than a system of management and control in which the population to be controlled serve as their own wardens.   I have elsewhere tried to find order in this new approach to governance.  See, Larry Catá Backer,  Global Panopticism: States, Corporations and the Governance Effects of Monitoring Regimes. Indiana Journal of Global Legal Studies  15(1):101-148 (2008).   

But this is all theory, and fairly opaque to those heavily invested in governance at the operational level.  An example might be useful to illustrate both the utility of this approach and its increasing importance as the preferred form of managing behavior.  A really useful example might focus on a subsidiary governance unit--a university, confronting a problem that requires behavior modification, cultural readjustment and control.  What follows is a short description of the way in which the modern panoptic approach to governance has become an important tool in the management of behavior among large masses of constituents and what that may suggest for governance by governments.  

The alcohol consumption habits of university students has become an issue of alarm to local, regional and national elites.  Alcohol consumption and abuse, especially, but not limited to those prohibited by law from its consumption has begun to absorb ever larger resources and universities, local, regional, state and national governments are confronted with behaviors that is judged detrimental to the welfare of the state (and the individual well being of those persons contributing to the crisis by  their behavior).  The traditional methods of control have proven ineffective--regulation by university officials, local governments, state and federal authorities have proven easy enough to evade .  Moreover, it is not clear that the larger culture shares precisely the same values and approaches to appropriate conduct that is the object of public and university regulators.  What is clear, however, is that the objections to the consequences of that behavior in terms of property damage, injury to individuals, the loss of future productive social elements, combined with a willingness of society to vest responsibility for these problems on universities, local, regional, state and federal governments (aided to some extent by the information media) has produced substantial pressure to force changes in behavior and manage the habits of a large target population.  Increasingly, universities have sought to center themselves within webs of panoptic techniques as a means of managing individuals and naturalizing a process of behavior control and modification that appears "natural" and "conventional".

The National Institute on Alcohol Abuse and Alcoholism (NIAA) College Task Force reports have begun to point to the framework within which behavior can be governed, modified and internalized among a subject population.  See, e.g., NIAAA College Task Force Report, Proposed 3 in 1 Framework, or the Four Tiers Program. Many of these seek to integrate multi-government programs of education, control of the environment, targetted enforcement, prgrams of intervention, counseling and related support, institutionalization of objectives based outreach efforts and coordination with other programs targeting related behaviors (drug use or other activities deemed to have an antisocial component).

The Four Tier framework "The 4 Tiers organize some of the most commonly used prevention and intervention tactics according to the level of research that supports them."  Four Tiers, id.

Tier 1: Evidence of Effectiveness Among College Students

Strong research evidence (two or more favorable studies available) supports the strategies that follow. All strategies target individual problem, at-risk, or alcohol-dependent drinkers. Their efficacy as part of a campus-wide strategy has not been tested.
Strategy: Combining cognitive-behavioral skills with norms clarification and motivational enhancement interventions. Cognitive-behavioral skills training strives to change an individual's dysfunctional beliefs and thinking about the use of alcohol through activities such as altering expectancies about alcohol's effects, documenting daily alcohol consumption, and learning to manage stress. . . .
Norms or values clarification examines students' perceptions about the acceptability of abusive drinking behavior on campus and uses data to refute beliefs about the tolerance for this behavior as well as beliefs about the number of students who drink excessively and the amounts of alcohol they consume.
As its name implies, motivational enhancement is designed to stimulate students' intrinsic desire or motivation to change their behavior. Motivational enhancement strategies are based on the theory that individuals alone are responsible for changing their drinking behavior and complying with that decision (Miller et al., 1992). . . . 
Strategy: Offering brief motivational enhancement interventions. Students who receive brief (usually 45-minute), personalized motivational enhancement sessions, whether delivered individually or in small groups, reduce alcohol consumption. This strategy can also reduce negative consequences such as excessive drinking, driving after drinking, riding with an intoxicated driver, citations for traffic violations, and injuries. . . 
Strategy: Challenging alcohol expectancies. This strategy works by using a combination of information and experiential learning to alter students' expectations about the effects of alcohol so they understand that drinking does not necessarily produce many of the effects they anticipate such as sociability and sexual attractiveness. . . .

Tier 2: Evidence of Success With General Populations That Could Be Applied to College Environments

The Task Force recommends that college presidents, campus alcohol program planners, and student and community leaders explore the strategies listed below because they have been successful with similar populations, although they have not yet been comprehensively evaluated with college students. . . . 
Strategy: Increased enforcement of minimum drinking age laws (Toomey and Wagenaar, 2002; Wagenaar and Toomey, 2002). The minimum legal drinking age (MLDA) law is the most well-studied alcohol control policy. Compared to other programs aimed at youth in general, increasing the legal age for purchase and consumption of alcohol has been the most successful effort to date in reducing underage drinking and alcohol-related problems.. . . .
Strategy: Implementation, increased publicity, and enforcement of other laws to reduce alcohol-impaired driving. Injury and deaths caused by alcohol-impaired driving and related injuries and deaths can be reduced by lowering legal blood alcohol limits to .08 percent for adult drivers. . . .
Strategy: Restrictions on alcohol retail outlet density (Scribner et al., 1995; Gruenewald et al., 1993). Studies of the number of alcohol licenses or outlets per population size have found a relationship between the density of alcohol outlets, consumption, and related problems such as violence, other crime, and health problems. . . .
Strategy: Increased prices and excise taxes on alcoholic beverages. A substantial body of research has shown that higher alcoholic beverage prices or taxes are associated with lower levels of alcohol consumption and alcohol-related problems. . . .
Strategy: Responsible beverage service policies in social and commercial settings (Saltz and Stangetta, 1997; Holder et al., 1997b). Studies suggest that bartenders, waiters, and others in the hospitality industry would welcome written policies about responsible service of alcohol and training in how to implement them appropriately. Policies could include serving alcohol in standard sizes, limiting sales of pitchers, cutting off service of alcohol to intoxicated patrons, promoting alcohol-free drinks and food, and eliminating last-call announcements.. . . . 
Strategy: The formation of a campus and community coalition involving all major stakeholders may be critical to implement these strategies effectively. A number of comprehensive community efforts have been designed to reduce alcohol and other substance use and related negative consequences among underaged youth, including college students, and among adults. . . .

Tier 3: Evidence of Logical and Theoretical Promise, But Require More Comprehensive Evaluation

The Task Force recognizes that a number of popular strategies and policy suggestions make sense intuitively or have strong theoretical support. Many also raise researchable questions that may be crucial in reducing the consequences of college student drinking.. . . 
Strategy: Adopting campus-based policies and practices that appear to be capable of reducing high-risk alcohol use. The following activities are particularly appealing because straightforward and relatively brief evaluations should indicate whether they would be successful in reducing high-risk drinking on a particular campus.
  • Reinstating Friday classes and exams to reduce Thursday night partying; possibly scheduling Saturday morning classes.
     
  • Implementing alcohol-free, expanded late-night student activities.
     
  • Eliminating keg parties on campus where underage drinking is prevalent.
     
  • Establishing alcohol-free dormitories.
     
  • Employing older, salaried resident assistants or hiring adults to fulfill that role.
     
  • Further controlling or eliminating alcohol at sports events and prohibiting tailgating parties that model heavy alcohol use.
     
  • Refusing sponsorship gifts from the alcohol industry to avoid any perception that underage drinking is acceptable.
     
  • Banning alcohol on campus, including at faculty and alumni events.
Strategy: Increasing enforcement at campus-based events that promote excessive drinking (DeJong and Langenbahn, 1996; Gulland, 1994). Campus police can conduct random spot checks at events and parties on campus to ensure that alcohol service is monitored and that age identification is checked.. . . 
Strategy: Increasing publicity about and enforcement of underage drinking laws on campus and eliminating "mixed messages.". . . . Lax enforcement of State laws and local regulations on campus may send a "mixed message" to students about compliance with legally imposed drinking restrictions. Creative approaches are needed to test the feasibility of this strategy. . . .
Strategy: Consistently enforcing disciplinary actions associated with policy violations (DeJong and Langford, 2002). Inconsistent enforcement of alcohol-related rules may suggest to students that "rules are made to be broken.". . . . 
Strategy: Conducting marketing campaigns to correct student misperceptions about alcohol use . . . . . On the basis of the premise that students overestimate the amount of drinking that occurs among their peers and then fashion their own behavior to meet this perceived norm, many schools are now actively conducting "social norming" campaigns to correct many of these misperceptions. . . .
Strategy: Provision of "safe rides" programs (DeJong, 1995). Safe rides attempt to prevent drinking and driving by providing either free or low-cost transportation such as taxis or van shuttles from popular student venues or events to residence halls and other safe destinations.. ..
Strategy: Regulation of happy hours and sales . . . .  Happy hours and price promotions—such as two drinks for the price of one or women drink for free—are associated with higher consumption among both light and heavy drinkers. . . .
Strategy: Informing new students and their parents about alcohol policies and penalties before arrival and during orientation periods. There is some anecdotal evidence that experiences during the first 6 weeks of enrollment affect subsequent success during the freshman year. Because many students begin drinking heavily during this time, they may be unable to adapt appropriately to campus life. 

Tier 4: Evidence of Ineffectiveness

The Task Force recognizes that it is difficult or impossible to "prove" that a specific intervention approach is universally ineffective. . . . 
Strategy: Informational, knowledge-based, or values clarification interventions about alcohol and the problems related to its excessive use, when used alone . . . . This strategy is based on the assumption that college students excessively use alcohol because they lack knowledge or awareness of health risks and that an increase in knowledge would lead to a decrease in use.. . . .
Strategy: Providing blood alcohol content feedback to students. This strategy uses breath analysis tests to provide students accurate information on their BAC.. . .  Four Tiers Program, supra.
Pennsylvania State University recently announced a set of comprehensive multi-jurisdictional  and coordinated  strategies  to achieve desired governance objectives with respect to alcohol consumption.  University and local government officials have publicly outlined "a long list of strategies for addressing the issue including  making dorms alcohol free. . .  , notifying parents of students who receive any type of alcohol violation--rather than just serious or repeated violations, as in the past--and having a greater police presence in town.  Other efforts include encouraging faculty to make greater use of Friday class periods, getting rid of the week between finals and commencements and developing a method for requiring anyone taken out of a football game for alcoholism related problems to pass a breathalyzer to get into future games."  Anne Danahy, "University Leaders Get Updates on Booze Efforts, Endowment," Centre Daily Times, Sept. 18, 2010, at A-5.  Earlier in the month,Penn State had announced the implementation, on a trail basis, of a Brief Alcohol Screening and Intervention of College Students (BASICS) program.  See, Matt Scorzafave, PSU Implements BASICS Program, Daily Collegian, Sept. 3, 2010.  "BASICS is a one-on-one alcohol counseling program some Penn State students will be referred to when they get into legal trouble on- or off-campus. The program will focus on individual students' needs in order to change or improve their drinking habits in a personalized setting."  Id.  As explained in the public website describing the program,
The BASICS program consists of two one-hour sessions with a UHS staff member. During the first session, you will meet individually with a staff member and complete an on-line questionnaire. You will also be screened for alcohol abuse, depression, and anxiety. At the second session, you will discuss your questionnaire and personalized feedback with the staff member. You will receive a personalized feedback report that includes a comparison of your drinking to other Penn State students. You will explore ways to reduce future health, social, and legal risks. Additional sessions beyond the first two may be required for some students. Penn State Division of Student Affairs, University Health Services,  Brief Alcohol Screening and Intervention for College Students (BASICS).
This BASICS project is "based on a program created by Dr. Alan Marlatt (Director, Addictive Behaviors Research Center and Professor of Psychology at the University of Washington).  The BASICS program is one of the most effective alcohol education interventions with college students.  The Substance Abuse and Mental Health Services Administration (SAMSA) has recognized BASICS as an evidence-based model program."  Penn State Division of Student Affairs, University Health Services,  Brief Alcohol Screening and Intervention for College Students (BASICS).

The regulatory approaches to the governance objectives related to patterns of alcohol use by students provides an excellent window onto the way on which contemporary governance is effectuated.  These  efforts  suggest a very different approach to the management of behavior by public bodies than the traditional conventional approach grounded in law and rule fo law principles.  it suggests the privileging of method over form and of the therapeutic over the command structures of traditional governance.  These strategies move beyond the traditional law systems to one grounded in the naturalization of behavior on the bodies of the objects of regulation.   Let's see how programs that focus governance through these methods help shape the panoptic approach to managing behavior as a substitute to legislating standards.

1.  The focus of these methods is on the disciplining of the bodies of the objects of regulation.  Breathalyzer tests, examinations by physicians, observations by faculty, passersby, neighbors and the like form the  basis of control.  The focus is not on drinking so much as the consumer of drink.  Consumption opens the body to examination and thus examined, to consequences derived from that probing.  

2.  These regulatory systems are grounded in surveillance.  Surveillance provides a seamless and constant method for deriving information that can be used at leisure to make judgments and impose consequences.  Surveillance systems that are automatic, consequential and framed around the patterns of behavior of objects and their interactions with controlled institutions or institutions that cooperate. 
3.  Surveillance provides a means for extraterritorial applications of governance power.  Universities now routinely project power well beyond the property under their control.  Not just dormitories, but entertainment venues outside of campus now form part of the virtual governance space within which the university may impose and enforce behavior norms.  Extraterritoriality is increasingly used by states as well--from the use of public funds for investment in foreign states to control economic activity outside the national territory through private market interventions to the application of national law to the activities of actors abroad with connections int he regulating state.    Students now carry their status on their bodies as well as the regulatory matrix generated by the university.  University governance thus is transformed from a static device grounded in territory and control of space to a dynamic element that moves on the bodies of its subjects.  

4.  Extraterritoriality  provides a basis for the expansion of the breadth of traditional sanctions frameworks as multiple systems interact simultaneously on the bodies of their objects irrespective of territorial location.  First larger group`s of people are subject to sanctions.  For example, the hosts of liquor parties, servers at drinking establishments and others similarly situated may find themselves responsible for the consequences of drinking by students grounded both in local regulation and the trigger of student violation of university policy.  Second, sanctions may be increased in severity.  Third, a larger range of activities may trigger sanctions.

5.  Surveillance requires a set of mechanisms for the production of information that leverages governance power by exporting its use to the very objects of regulation.  As a consequence, these systems are focused on creating reward structures for private enforcement through whistle blowing.  Informants provide a important element of enforcement and also serve to better internalize the values  that trigger informing.   That reward structure can include protection from reprisal for informing on others. More important, reward structures that serve to reinforce the extent of privatization of enforcement may be grounded on forgiveness of a primary obligation--for example, informants or those who bring in violators for treatment to medical facility may receive forgiveness of their own violation (drinking) when they aid in enforcing regulation against others or aid in the prevention of injury by violators. 

6.  Privatization is not merely a function of whistle blowing and penalty bargaining.  Much of it may require support of privatized institutional approaches to behavioral modification.  Support of programs like Alcoholics Anonymous, campus ministries and projects by other campus groups that are meant to reinforce  approved behaviors may serve as key elements of a panoptic regulatory network. 

7.  But behavior modification requires multiple approaches to the control fo the body.  A critical additional approach  to behavior modification targets communication--the environment in which the object of regulation (the student) receives and evaluates information.  The instrumental use of communication is now understood as a critical component to behavior modifying regulatory campaigns.  Social marketing has become established as a key element of governance.  "Social marketing was "born" as a discipline in the 1970s, when Philip Kotler and Gerald Zaltman realized that the same marketing principles that were being used to sell products to consumers could be used to "sell" ideas, attitudes and behaviors." Nedra Kline Weinreich, What is Social Marketing, Weinreich Communications. 

8.  Surveillance can be understood as having both an active and passive  character.  The passive character--gathering and harvesting information--suggests an automatic and mechanical process.  But information does not sit inert--it is used to form judgments and inform consequences.  It has value in its distribution to actors outside as well as inside the university community where it is generated.  Even the process of determining what sort of information is to be collected, the manner of collection, and the meaning of that information, can substantially inform behavior.  The power of credit rating agencies to regulate behavior by their determination of what is to be rated is well known.  But transparency is also a powerful weapon.  Governments have long used transparency instrumentally--the publication in local newspapers of the names and pictures of offenders has long been used as a method of enforcement and control.  "Name and shame" tactics are at the heart of current transnational efforts at soft law regulation.   For the university, instrumental transparency can include reports to parents or guardians of violation, and information sharing with other regulatory institutions can have a powerful disciplining effect.  

9.  Transparency, information gathering, dissemination, social marketing, and privatization provide a foundation for more extensive programs of behavior modification targeting the bodies of offenders.  These reorientation and soft law behavior modification regimes  usually employ the language and techniques of the "factual" disciplines--science, psychology--as well as the invocation of moral systems.  Offenses can trigger mandatory interventions by psychological and social service providers attached to the university or local governments.  Disease models with social implications may be deployed to demonize the targeted behavior.  Conflation with other targeted behavior may be emphasized (alcohol and sexual assault for example).   And the bodies of offenders will be imprinted with impurity, through a discourse of deviance--alcohol consumption behaviors as medically, socially and morally deviant behaviors.

10.  Yet all of these techniques cannot be effective unless the objects of regulation become its principal enforcers. A university might therefore seek actively to recruit and reward target group elites to enforce its behavior modification governance framework.   Student leaders, the leadership of fraternity organizations, athletic team leaders and the like can be recruited and rewarded through the offer of participation in governance and the opening of employment and influence networks.  Their only obligation is to serve as an instrument of enforcement and social conditioning.  This is not merely privatization but an internalization through local elites.  The model is also well developed in public law, that of local elites in developing states recruited to serve the interests of developed states through the absorption of their values and their incorporation into the power networks of the developed state.  These local elites undertake the most intensive part of thew work of behavior modification, as subalterns on behalf of the dominant power. Faculty can be recruited as well.  Universities can consider changes in the faculty reward/obligations framework to induce changes in faculty interactions with students as part of the expectations of the profession.  Faculty can come to believe that an essential role of faculty includes observation, interaction and intervention in the lives of students who appear to violate alcohol conduct norms.  Surveillance, whistle blowing, transparency serve as enhancers of this role, as well as a means of evaluating faculty willingness to serve in this role. 

11.  These efforts are usually undertaken in tandem with traditional regulatory methods.  For universities and local government officials, that may mean a heightened resort to private law--for example nuisance laws, public urination and public disturbance law and an enhanced ability for individuals to use tort law.  

12.  These efforts at coordination serve as an opening to more intense communication between university and governmental efforts to modify the behavior of students.   That communication--structural coupling--that touches not merely on communication between governance systems, but efforts to coordinate and align points of contact, have significant governance potential within panoptioc governance frameworks.  University-government communication can produce efforts to harmonize and coordinate programs as well as joint venturing, the extent of which is meant to produce a seamless system of surveillance, intervention and conventional regulatory system that together  intensifies efforts to internalize conformity. Police coordination, extensions of jurisdiction between university and local community and similar measures crams harmonization down to the operational level.  But the panoptic elements is more clearly understood in the enforcement element of this cooperation.  Coordination produces an incentive towards anticipatory enforcement rather than an increase of traditional violation based enforcement.  It is likely that university-community police cooperation can produce programs  that permit intervention before a violation occurs--based on information gathered through surveillance and recorded patterns of prior conduct.  There is some social marketing about this approach, though even conventional governance has not produced consensus on the utility of this move.  See Minority Report.  Thus an open textured system of information harvesting and dissemination permits judgment that can support police action before the fact and thus reinforces the normative objectives of governance--avoidance of alcohol abuse.  

Thus, as the university in the United States confronts and seeks to solve the problem of alcohol consumption among its student population, it provides a window on the approaches to panoptic governance at lies at the heart of contemporary efforts to more effectively manage the behavior of individuals.  This "new" governance avoids reliance on the traditional forms of government--law, rule of law, command, and punish.  Instead it adopts the managerial forms of the therapeutic, deploys the techniques of self improvement and the power of information to not merely change behavior but to internalize those changes in a population that becomes the principal agents of its enforcement. These techniques have become particularly interesting to governments.  As systems of law and rule of law constrain government authority to act on its citizens, new techniques, more subtle and complex, may serve as an alternative means of achieving governance goals.    The perceived anti-social aspects of alcohol consumption may provide insights for th management of anti-social behaviors around the use of recreational drugs.  Certainly, the White House Office of National Drug Control Policy might provide support for local efforts by universities as a means of running governance experiments to develop more sophisticated panoptic systems for its own use on a national level.  See especially the ONDCP, 2010 National Strategy ("Endorsing a balance of prevention, treatment, and law enforcement, the Strategy calls for a 15-percent reduction in the rate of youth drug use over 5 years and similar reductions in chronic drug use and drug-related consequences such as drug deaths and drugged driving." 2010 National Strategy Executive Summary). The full strategy can be accessed here.

Tuesday, September 14, 2010

Japanese Approaches to Corporate Social Responsibility (企業の社会的責任) and Global Human Rights--Between the Law-State and Corporate Culture

Currently, much important work is being undertaken at the international level that seeks to structure the parameters of behavior of economic enterprises in their relation to human rights.  Among the most important is the work of John Ruggie as the Special Representative of the United Nations Secretary General for Business and Human Rights, undertaken pursuant to a mandate of the U.N. Human Rights Council. On the framework, see, e.g., Larry Catá Backer, On the Evolution of the United Nations’ 'Protect-Respect-Remedy' Project: The State, the Corporation and Human Rights in a Global Governance Context (June 3, 2010). Santa Clara Journal of International Law, Vol. 9, No.1, 2010.
 
One of the most  potent insights of the current project to provide a comprehensive framework for approaching issues of corporate behavior and human rights is the recognition that corporate (and other business) actors are subject to multiple systems of behavior rules.  The two most important are those generated through public  bodies, principally states, and those generated through private actors, principally corporations and participants in markets.  The first is evidenced through law, regulation and the traditional and conventional expression of state authority.  The second is evidenced by the customary rules of behavior and expectations of those principal stakeholders in the business that operate within them and the markets within which they operate.   Both, together, evidence the promise and limits and multi-sources efforts to regulate corporate behavior by resort to conventionally available governance instruments, and the promise of governance techniques grounded in cultural translation.
 
Japan provides an interesting context for the application of these insights. The Japanese law-state provides little effective legal foundations for the structural imposition of corporate social responsibility behaviors in general, or the cultivation of sensitivity to the human rights consequences of corporate behavior more specifically.  The recently concluded study of the Japanese legal environment in this regard, conducted in the context of the SRSG's corporate law  tools project, amply evidences the limited value of the law-state to corporate behavior touching on business and human rights.  The corporate law tools project involved "corporate law firms . . . working with UN Special Representative John Ruggie to identify, in a series of 42 surveys, whether and how national corporate law principles and practices currently foster corporate cultures respectful of human rights.  The full list of participants and jurisdictions to be covered was announced in March 2009 (see announcement [PDF])."  U.N. Secretary General's Special Representative for Business and Human Rights, Corporate Law.

In the case of Japan, the Law firm of Cotty Vivant Marchisio & Lauzeral suggested the contours of the legal parameters framing corporate or business behavior in Japan. 
1. SETTING THE LEGAL LANDSCAPE
Japanese corporate law is mainly governed by the Company Act, which became effective in 2006. Human rights are mostly protected by specific provisions of the Japanese Constitution, as well as by many other domestic laws. Human rights enforcement is also fostered by Japan’s ratification of international human rights instruments as well as promotion of human rights through private initiatives, like the Keidanren’s Charter of Corporate Behavior.

2. REGULATORY FRAMEWORK
The Japanese jurisdiction belongs to a civil law tradition, and corporate law, like any other in Japan, is regulated at the national level. The main corporate/securities regulators are the Financial Services Agency (control of financial stability, liquidity of financial markets and corporate auditing), the Bank of Japan (monetary issues) and the Tokyo Stock Exchange (power of supervision of transactions on the market).

3. INCORPORATION AND LISTING
Despite the existence of the concepts of “limited liability” and “separate legal personality”, especially in the Joint Stock Corporations (the most frequent form of company in Japan), such corporations are not required to recognize any duty to society, except for the respect of legality in their activities. Yet, they are allowed to consider such duties, which are essential criteria in the companies’ assessment by the two Japanese responsible investment indexes. The participation of corporations to these indexes is mostly non voluntary, as most listed companies are screening based primarily on public information on websites and annual reports. However, a company may submit additional information which will be incorporated in the decision making process.

4. DIRECTORS’ DUTIES
Directors’ duties are mainly owed to the corporation itself, although directors may be, to a certain extent, liable to third parties. Their legal duties clearly provide that directors shall avoid legal risk and damage to the company’s reputation. Failing to uphold such duties may have consequences regarding civil or even criminal liability. Directors are not specifically required to consider the impact of the company’s (or its subsidiaries’) activity on non-shareholders, whether it is inside or outside the Japanese jurisdiction. However, directors may be required to consider such impact as a result of their duties to avoid legal risk and damage to the company, of certain health and safety laws, or certain environmental laws, and when the corporation is in insolvency proceedings.
 
5. REPORTING
Reporting and disclosure requirements of Japanese companies do not include any obligation to disclose the impacts of their operation (or of the action of subsidiaries, suppliers, and other business partners) on non-shareholders, whether occurring inside or outside the jurisdiction (especially human rights impacts), as long as such impacts are not significant for the company. Should such be the case however, it would become mandatory to disclose such information for the public interest or the protection of investors. In addition, many Japanese corporations boast voluntary publication of Corporate Social Responsibility reports.
 
6. STAKEHOLDER ENGAGEMENT
There is no particular restriction on circulating shareholders proposals dealing with impacts on non-shareholders and the possibility for non-shareholders to address companies’ general meetings is subject to the articles of incorporation. Many Japanese institutional investors consider the impact of the company on human rights in their investment strategies.
 
7. OTHER ISSUES OF CORPORATE GOVERNANCE
Keidanren), as well as individual charters adopted voluntarily by many Japanese corporations, has a key impact on promoting good corporate governance practices In addition, based on the general prohibition of discrimination because of race, creed, sex, social status or family origin in the Japanese Constitution, there can be no discrimination between members of the board for any gender, racial or ethnic reason.  Cotty Vivant Marchisio & Lauzeral, Corporate Law Tools Project--Japan (Sept. 2009) (Executive Summary).
The Japanese example is not much different in scope or effect from those of other states examined.  For a report on the results of the corporate law tools project, see "Overarching Trends and Observations" [PDF] - Based on the participating firms’ surveys of over 40 individual jurisdictions, this report was published by the Special Representative in July 2010.  See also Prof. Ruggie's commentary on the report, "Review Links Corporate and Securities Law and Human Rights", 27 Jul 2010.

Yet this is not necessarily a bad thing.  For the Japanese law-state has not impeded corporate efforts to embrace either corporate social responsibility frameworks in general or sensitivity to the human rights affecting aspects of their operations more specifically. 
The initiative of Nippon Keidanren, the Japanese Business Federation, which adopted the Charter of Corporate Behavior in 1991, is the most important example of “industry-driven” Corporate Social Responsibility policies in Japan . . . . The last version of this Charter dates back to May 18, 2004 and asserts that companies should “take social responsibility flexibly and voluntarily”. Agreeing that corporations need to “enhance their social significance and value”, the Keidanren has written ten principles in its Charter, some of them being directly related to human rights. Although this Charter is a voluntary initiative of the Nippon Keidanren15 and is not legally binding, the Charter has had significant results in terms of influencing company behavior. Cotty Vivant Marchisio & Lauzeral, Corporate Law Tools Project--Japan (Sept. 2009) (Paragraph 22.1).
Indeed, what clearly emerges in a willingness of Japanese corporations to fill in the gaps in the area of corporate behavior through their own efforts.  This is the essence of the Nippon Keidanren's Charter of Corporate Behavior.
 
Yet it would be a mistake to suggest that these initiatives proceed  principally from the law-state, or from the framing efforts of public authorities of law.  Rather, the source of these efforts.  My research assistant Shing Kit Wong (Penn State School of International Affairs, expected '12) has begun to explore  the socio-cultural bases of corporate governance touching on issues understood as corporate social responsibility and the human rights impacts of corporate behavior, "Japanese Thought on Corporate Social Responsibility."     His preliminary report suggests the context within which these issues are being developed and the perspective from which they emerge.
 
_________
 
Japanese thought on Corporate Social Responsibility
Shing Kit Wong
Master of International Affairs Candidate
Introduction

The history of corporate social responsibility (企業の社会的責任) in Japan can be traced back to the Edo period, which main idea was honesty in operation, and contribution to the society. It also structuralized the morality and harmony among merchant, customer and the society. Corporate social responsibility was brought to attention in 1970s due to a large amount of corporate scandals, such as corruptions and environmental pollutions, as a “byproduct” of the rapid economic growth in the 1960s. The public lost confidence in corporations. As a result, corporate social responsibility was widely promoted in order to retrieve public confidence to corporations. Thus, corporate social responsibility in Japan is strongly related to corporate philanthropy (社会貢献) and sustainable development (持続的発展. In the Corporate Social Responsibility (CSR) Advisory Committee interim report by the Japanese Ministry of Economy, Trade and Industry in 2004, it summarized six basis points of corporate social responsibility:
1. CSR is fulfilled through interaction with stakeholders.
2. CSR is not only remained in the outside communication of corporate, but also include the organizational system inside the corporate.
3. Observance of the law is the foundation of all business activity. Including environmental protection, respect human right, social contribution, etc.
4. CSR includes national and regional sense of value, culture, economy, and social matter.
5. Since the content of CSR is extensive and closely related to business, the effort of voluntary and tact is very important.
6. The most important effort to receive trust is to disclose the information including comment from stakeholders and explain the responsibility to stakeholders.
From these six basis points, Japanese corporate social responsibility can be viewed in three main areas: environmental protection (sustainable development) and corporate philanthropy, responsibility toward customer, and human right.

Background

Japanese corporate responsibility mainly focused on the principle of national interest (国益主義), in which the national goal is strongly emphasized in the strength of the military, before World War II. After the war, the goal was not suitable upon the defeat of the war. The primary aims of government were in the social welfare and rebuild of the country, and corporate responsibility had tied up with economy reconstruction. Since the beginning of 1950s, the Japanese economy grew rapidly. However, corporate scandals such as corruptions and pollutions in the society also became the byproduct of the economic growth. The public lost confidence toward corporations, and stated that corporations were naturally inherited evil (企業性悪説). In order to enhance the images of corporations and regain the public confidence, corporate social responsibility had its first boom in the 1970s. Corporations which destroyed the environment were strongly criticized, and the benefit received from business activities should return to the society. In the 1980s, the society and life of the citizens were benefited in the economical aspect, but the quality of the citizens’ life was not an improvement because of long working hours, resulted in various social issues. Toward the end of 1980s, the period of economic bubble, corporate had extra funding for activities such as art festivals and cultural festivals fore contributing to the society. Yet, some had criticized that such corporate philanthropy was only a cover up of the real social issues. During the depression in the 1990s, corporations had an operating philosophy of symbiosis with the society ( 社会との共生), which corporate philanthropy toward the society was one of the existing purposes. Corporations with such operating philosophy and the society sought a long term perspective in recovering the economy and living standard of the citizen. In the 2000s, global environmental issue became a popular topic, and also became a significant concern in corporate social responsibility.

Environmental protection (sustainable development) and corporate philanthropy

Japanese economy started growing rapidly after the Occupational period in the 1950s. The majority of the investments were in electric power, coal, iron, steel, and chemical fertilizers. The economy not only recovered the lost resulted by the war but also surpassed the growth rates of the pre-war period. Between 1953 and 1965, Japanese GDP expanded more than 9% per year. In 1965, the nominal GDP in Japan was estimated at over $91 billion, and over 170 billion by the end of the decade. However, massive pollution was also produced during the economy growth period. Furthermore, the oil crisis in 1973 affected the industrial production and caused severe price inflation. Most corporations were severely criticized, and had a negative reputation in the society. It was realized that the morality of corporate was gone and that corporations were purely greedy and evil. In order to enhance the image of corporations and restore a harmonized society, corporations promoted numerous environmental protection projects and reimbursed to the society in the 1980 during the second growth of the economy. 

The traditional philosophy in business is to from a harmonized society, in which emphasize the relations between merchant and customer, Japan and the world, and human being and nature. In 1987, Our Common Future was published from the United Nations World Commission on Environment and Development. Its targets were multilateralism and the search for a sustainable development, a pattern of resource usage that intends to meet human needs while preserving the environment, so that these needs can be met not only in the present, but also for future generations. In another word, it is a development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This ideology had been engraved in the corporate social responsibility ever since.

The management principles of Mitsui Group, one of the largest conglomerates in Japan and traded companies in the world, are mainly revolved around environmental protection and corporate philanthropy. The corporate mission philosophy is contributing to the Earth, where it is filled with people’s dreams of the future (大切な地球と、そこに住む人びとの夢溢れる未来作りに貢献します) . In order to achieve this magnificent mission, Mitsui intended to increase the total value of the enterprise in economic, environmental, and management through profession and social action to achieve sustainability and a harmonized economic environment. Under this principle, Mitsui is working on a global scale, dealing with the problems of global warming, risk management systems including environmental conservation and pollution prevention, and promoting environmental friendly technology and environmental responsibility. Mitsui has deployed a variety of environment-related businesses in the world to administrate their Principles of Environmental Policy to the environmental industry including renewable energy projects, emission projects, recycling business, modal railway business, forestation, etc. For instance, Mitsui is actively involved in solar power generation, wind power generation, and biomass power generation projects. While carbon dioxide emissions are said to cause global warming, Mitsui participates in production and sales of carbon-neutral bio-energy. Through environmental protection, the greenhouse gases and industrial waste had been reduced. In addition, such activities created new markets in the society. All the establishment of companies, plant construction, and assistance to recycling partners provided a securing local employment and strengthened the economy. The corporate social responsibility principle of Mitsui Group highly reflects the traditional philosophy in business in Japan.
 
Responsibility toward customer
 
Japanese corporate social responsibility toward customer focuses on providing excellent service and product to the consumer. There are five major elements consisted in the product providing to the consumer: high quality, function, safety, environmental friendly, and cost. Japanese corporate believes that the central part of customer’s satisfaction is the performance of product and service in which consumer needs are met. This includes the functions and safety of the products and its reliability. The function of the product is a property of acting on how the product and service satisfy the consumer. It would focus on the consumer’s needs and the limitation of their usage of product and service. For instance, products would be manufactured with the consideration of the usage of people with disabilities. In addition, the usage of the product and service must avoid potential harm to the consumer and damaging of the product, as well as the harmony of the society. The product and service has to be environmentally friendly in order to reduce the impact on biological and ecological destruction for the future generations. The price of the product and service also has to be reasonable to the consumer. It is necessary supply product and service with the consideration of those factors in order to enhance business value and sustainable society. In order to fulfill such factors, the products are strictly tested to achieve the ISO 9241-11, which deals with the extent to a product that can be used by specified users to achieve specified goals with effectiveness, efficiency and satisfaction in a specified
context of usage. The products would then be examined by non-profit organization such as ISO.

Furthermore, the relationship between consumers and corporate also fall under the ideology from the Consumers International. The CI advocated eight consumers’ rights and five consumer’s responsibilities.
 
The eight consumer’s rights are as follow:
1. The Right to Satisfaction of Basic Needs; which emphasize the right to get the necessary product and service to ensure survival
2. The Right to Safety; which emphasize the protection from product and service that is dangerous to life and health 3. The Right to be Informed; which emphasize the right to receive honest
information and advertisement necessary for decision making
4. The Right to Choose; which emphasize the right to choose the precise product and service from quality assurance to the satisfaction offered at competitive prices
5. The Right to be Heard; which emphasize the right to represent consumer interests in the development of product and service
6. The Right to Redress; which emphasize the right to appeal for poor service, mistakes and receive compensation
7. The Right to Consumer Education; which emphasize the right to obtain knowledge and skills required to select product and service
8. The Right to a Healthy Environment; which emphasize the right to live and work in an environment without fear and danger for the current and future generations
Following is the five consumer’s responsibilities:
1. Critical Awareness: consumers have the responsibility of becoming a sensitive awareness and quality for the price of goods and services
2. Action and Involvement: consumers have the responsibility to act and
to obtain a fair deal
3. Social Responsibility: realize the responsibility of the consumption behavior and the influence of others, especially the effect to the weak
4. Ecological Responsibility: consumers have the responsibility for understanding the environmental impact of their consumption behavior
5. Solidarity: consumers have the responsibility to defend the interests of consumers
The essence on such responsibility of providing excellent service and high quality product to customer might have been corrupted in this competitive market. In 2009 to 2010, Toyota Motor recalled approximately nine million vehicles for the pedal entrapment/floor mat problem and accelerator pedal problem worldwide, and the majority of the recall being in the United States. Such crisis resulted in an approximately 2 billion loss in sales worldwide for Toyota Motor Corporation. The president of the Toyota Motor, Mr. Aiko Toyoda, had pointed out this phenomenon in the competitive market, and affected the quality of the product at the testimony in Washington D.C. in February 2010. Mr. Toyoda stated that the corporation’s priority has traditionally been: First—Safety, Second—Quality and Third—Volume, and that those priorities became confused in this competitive market. The corporations pursued growth over developing speed of the organization, but yet, resulted in the safety issues of the vehicles. In addressing to the crisis, Mr. Toyoda shared the philosophy of Toyota’s quality control and the seriousness Toyota Motor Corporation took on quality and safety of its vehicles. He also explained that at the corporation, the key to making quality products is to develop quality people, and that each employee should thinks about what should be done in making improvements continuously, and thus, making even better vehicles. Under the philosophy of continuous improvements(改善), Toyota Motor Corporation aims to continue offering even better products for society. Mr. Toyoda had personally placed the highest priority on improving quality over quantity, and that under his leadership, he had reaffirmed Toyota’s values in such principle. In order to achieve safety and high quality products, members of the management team would actually drive the vehicles, and that they would check for themselves where the problem lies. He believed that only by examining the problems on site can ensure the management team to make decisions from the customer perspective. At the end of Mr. Toyoda’s statement, he committed to the customers with his reputation:
“My name is on every car. You have my personal commitment that Toyota will work vigorously and unceasingly to restore the trust of our customers.”
Although the malignant competition in the market resulted in such crisis, Mr. Toyoda, representing the Toyota Motor Corporation, reaffirmed the philosophy of the corporate social responsibility toward customer of placing safety and quality the highest on the list of priorities. Such philosophy revolves around the principle corporate social responsibility toward customer, as well as the philosophy of social contribution.

Human Right
Human right in the Japanese society is highly respected. In the Constitution of Japan Article 97, it states:
“The fundamental human rights by this Constitution guaranteed to the people of Japan are fruits of the age-old struggle of man to be free; they have survived the many exacting tests for durability and are conferred upon this and future generations in trust, to be held for all time inviolate.”
The Labor Law in Japan is constructed under the principle of this article. The Labor Standard Act, Trade Union Law, and the Labor Relations Adjustment Act are the three main Labor Laws (労働三法) in Japan. The purposes of the Trade Union Law and Labor Relations Adjustment Act are to improve the status of workers by promoting fairness in negotiations with employers. They are also to prevent labor disputation with employers, and thus, maintaining industrial peace. On the other hand, the Labor Standard Act ensures a safe and healthy working environment, fair wages, annual paid vacation, maternal leave, accident compensation, and prevents long working hours, child labor, discrimination of all kind, and force labor. In Mitsubishi Corporate, the corporate social responsibility toward human and labor right is very much referring to the principle of the Labor Laws. Being one of the Mitsubishi Corporate branches, the philosophy of Mitsubishi Paper Mills Limited is creating a working environment with the respecting the humanity of employees, and safety being the highest priority in workplace in order to demonstrate the full potential of each employee. Such philosophy is empowered by the guideline of respecting human right, preventing discrimination of all kind, ensuring a health and safe working environment, and compliance to the Labor Laws. Mitsubishi Paper Mills promoted employment for the disabled and the elderly, and in the consideration of work-life balance, the company introduced a time management technology to prevent long working hour and overworked.
 
However in this competitive market, whether the principle of the corporate social responsibility toward human right could be practice is questionable. Due to the contribution from the corporate toward the society, the issues of human right were always overlooked. In order to maximize profit, benefit of the labor always becomes the first to reduce, and that government official would sometimes be ignorant about the human right issues. Instead, diligence and loyalty toward the corporate and society became a social norm, and that employees were “willing to” work longer hours. Furthermore, for transnational corporate, whether the principle of corporate social responsibility toward human right applies on foreign soil is also remain questionable. In the summer of 2010, Chinese workers in the Honda Motor manufacturing plants throughout China went on strike because of unfair wages. The Chinese labors insisted on “same work, same pay” with the Japanese labors, yet the wage of a Japanese technical specialist (50000 yuen) in Chinese manufacturing plant was 50 times more than a female Chinese worker (1000 yuen). The incident ended with a raise of wages for the Chinese labor, but the wage difference between Chinese labor and other labor in South Asia is still large. Although there are many unanalyzed elements in the incident, corporate social responsibility in human right tend to be measured by different rulers.
 
Conclusion
 
The history of corporate social responsibility in Japan can be traced back in the Edo period, which main idea was honesty in operation, and contribution to the society. Corporate social responsibility became essential due to the negative image of corporations during the rapidly economy growth in the after the Occupational period. Japanese corporate social responsibility always revolve around Environmental protection, sustainable development and corporate philanthropy since the Japanese traditional philosophy in business is to from a harmonized society with the emphasis in the relations between merchant and customer, Japan and the world, and human being and nature. Japanese corporate social responsibility toward customer focuses heavily on providing excellent service and product to the consumer, and such produce has to be high quality and safe to the consumer. Japanese corporations respect human right, in which harmony is created between labor and employer in order to achieve economical efficiency. However, in the competitive market, labor’s human rights were sometimes overlooked, and that social norm was created to override such abuse. On the other hand, Japanese transnational corporations tend to have different measures of human right for labor outside of Japan.

References:

萩原愛一「企業の社会的責任」2005.3.24

岡野麻里「日本企業の社会貢献活動による途上国支援の可能性と限界」2006.3

佐藤大樹「総合商社の環境CSR」

嶋野将太「企業の消費者に対する社会的責任」

古内 翔「CSRと労働・人権問題」

猪口 孝「現代国際政治と日本―パールハーバー50 年の日本外交」P.122-26

経済産業省『企業の社会的責任(CSR)に関する懇談会中間報告書』2004.4.28
 

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Mr.Wong's analysis suggests a set of preliminary insights add an important layer of understanding to the principally law based analysis that is the traditional focus of corporate social responsibility and the human rights impacts of corporate behavior.  Wong suggests both an approach to the issue (social harmony) and its expression throughout the social order--from family, to group, to corporate entity, to society, to state--that substantially impacts both the approach to judging the actions of key stakeholders and determining the place (within the social and legal environments) in which such activity might best to located.    
 
More importantly, Mr. Wong reminds us of the impact of place within a transnational analysis of corporate behavior.   Corporate behavior can be as much a function of the place where it is to be effected as it is grounded in a set of uniform norms.  It appears easy enough for corporations to apply corporate social responsibility and human rights impact analysis differently to home state and host state stakeholders.  A state-law system may be indifferent to that result, but the aggregate behavior may substantially reduce the value of human rights based behavior norms differentially applied.