The business of modern-day slavery

Events last week in the UK, where three women were rescued from what appears to be a 30 year-long situation of forced domestic labour situation, have focused a great deal of attention on "modern-day slavery". But it is hardly a one-off. Issues of forced labour, human trafficking and modern slavery are increasingly gaining public attention. Business, however, has been slow to engage in the conversation.

Perhaps this is no surprise given that no company wants to run the risk of being tainted with the spectre of slavery. But most of the big modern slavery stories involve business. From children forced to harvest cotton in Uzbekistan to labourers enslaved to fish in the waters of New Zealand, hardly a week goes by without a new story of extreme exploitation being splashed across the media. The appalling treatment of migrant construction workers in Qatar the build up to the 2022 FIFA World Cup has gained more exposure than most, likely because of the headline claim that construction for the World Cup will leave 4000 migrant workers dead. It is a heart-stopping statistic.

With all this noise around modern slavery, much of it at the hands of campaigners such as Anti-Slavery International, Free the Slaves, and Walk Free (who are responsible for the recently launched Global Slavery Index), governments at least are gradually starting to act. The UK Government is already in the process of drafting a modern slavery bill to make the complex legal situation around the issue more clear for prosecutors. The US has also launched initiatives to tackle human trafficking in the supply chains of companies and government contractors. Canada too now has a national action plan to combat human trafficking whilst Brazil has perhaps gone the furthest of any country in seeking to tackle the problem.

Such measures are to be applauded, but there's still a long way to go in effectively combating the worst forms of human exploitation. And one crucial player that so far hasn't brought much to the party is business. Compared with many other social and environmental issues, modern slavery has not seen much enthusiastic response from the business community. Although virtually all corporate codes of conduct prohibit any kind of forced labour, the issue is rarely given any particular attention. Most businesses simply assume that it doesn't affect them. However, the torrent of news stories across various countries and industries suggests otherwise. Companies just aren't looking hard enough to find their connection to modern slavery.

David Arkless, formerly President of Corporate and Government Affairs at the global temp agency Manpower, is probably the most visible and articulate member of the business community involved in anti-slavery efforts. He said last week that he was "frustrated by the lack of involvement of corporations in efforts to ensure that their supply chains are verified against the use of abused labour and that most of the big corporations of the world have not amended both their financial, expense and human resource policies.” You can understand his frustration. Most business leaders are simply burying their heads in the sand.

This is a major stumbling block because most forms of modern slavery either involve business or affect it in some way. After all, forced labour is a particular way of doing business - a morally regnant one for sure, but a business practice all the same. Even illegal industries such as prostitution and drug cultivation, both of which have had numerous documented cases of trafficking and forced labour, rely on business principles and come into contact with legitimate businesses at some stage. The bottom line is that we have to understand modern slavery as a business if we are to make any real sense of it and take appropriate steps to prevent it.

The research base exploring the business of modern slavery is especially thin. So I was pleased last week to help launch a new report funded by the Joseph Rowntree Foundation on the business models and supply chains found in forced labour in the UK. It was a fascinating project to be involved in, and along with my co-authors, I'm hoping that it really helps to shine a light on the economics of modern slavery in developed country contexts.

One of our main findings is that although forced labour is often described as a hidden crime, it is not as difficult to unearth as many in the UK, including businesses and government, seem to believe. As my co-author Genevieve LeBaron and I say in a recent article for The Guardian: "The problem is not so much that we cannot find forced labour; it is that either we choose not to look where it is most likely to occur or we simply misclassify those being exploited as criminals rather than victims. A new approach to detecting and enforcing forced labour is necessary. To pinpoint its occurrence we need to start by examining the forces of supply and demand."

Much still needs to be done to really understand how these economic forces lead to such extreme forms of exploitation. But the good news is that we're making good progress. The challenge will be getting legislators and business leaders alike to take our findings seriously.

AC


Photo by Junaidrao. Reproduced under Creative Commons licence

Rob Ford should stay

Toronto, that once sleepy capital of Canadian business, ‘New York run by the swiss’, a city widely seen as boring and ugly (esp. compared to its once-competitor Montréal) – has made global news: A crack smoking mayor! Match that, London, New York or Berlin! All the mainstream media here (and globally) are pretty unanimous in their call for Rob Ford’s resignation, or at least for him taking a break.

That in itself is a reason for suspicion. In my business ethics course this week I had a vivid exchange with my students. We were discussing discrimination and how it is unethical to apply criteria such as race, gender, sexual orientation, recreational habits etc. to job qualifications and hiring. On that note, calls for Ford’s resignation are not very convincing. After all, on many accounts, he has done a good job as Toronto’s major. The city’s finances are healthy; public services are running smoothly, key infrastructure projects, such as the construction of new subway lines have finally taken off; and the major successfully tamed the beast of an otherwise dysfunctional federal/provincial/municipal layered bureaucracy to get even more public infrastructure projects off the ground. This alone, in a city whose infrastructure is stuck somewhere in the 1970s, is reasonable ground to consider him a success on his job.

Of course, there were other things in the past, where arguably Ford violated the terms of his job. Toronto Star investigative reporter Daniel Dale – a former student of us - digged out a number of occasions where the mayor took advantage of his role for personal issues. But nothing really stuck.

As much as some have made an ethical case here against the mayor, I do not think these arguments really touch the heart of the controversy.

Two things spring to mind to any reflective observer. First, much of the vitriol directed at Ford in my view is just based on the persistent WASPy (as in White Anglo Saxon Protestant) subculture of North America. Ford likes to use recreational drugs, has all the wrong, politically incorrect friends and, yes, is probably an alcoholic. Mind you, at least it was not about sex. But in some ways his fate resembles the one of Bill Clinton or Elliot Spitzer: Ford does not live up to the public morality and style, which is deemed politically correct in Canada. It is worth noting that although possession of crack is illegal in Canada, the lack of concrete proof (in terms of physical substance) means that prosecution is unlikely. But the fact that Ford admits to it in public and simply continues with his job just infuriates all those who either have succumbed to this pubic consensus of stuffy morality or otherwise suppress it and live it out in private. After all, Canada’s alcohol consumption is twice the global average and him talking about his ‘drunken stupors’ as a regular occurrence probably just represents an average recreational practice in this country.

Little surprise of course, that much of the hunt on Ford – representing the right wing Progressive Conservative Party – is coming from the ‘liberal’ press here. It not only shows how small ‘c’ conservative even Canada’s liberal elites are but also reveals that all those who hated Ford as a mayor to begin with now take whatever moral resource as their disposal to finally finish him off.

This points to a second observation. Rob Ford epitomizes the aches and tensions of a country which has been the most relaxed and forward looking in terms of immigration. His constituency are the ‘905ers’ based on the area code of Toronto’s suburbia. That is also where he is from. These are mostly people with a first generation immigrant background coming from south and east asia. The other lot,  who hate him and are currently fanning the flames of ousting Rob Ford are the ‘416ers’, those who live in the core downtown of Toronto. None of them voted for Ford and they never felt represented by a fat, white, uneducated, loud bloke from the suburbs.

Ford’s approval ratings have soared in the aftermath of him admitting his drug use. This is no surprise. He represents people who struggle to make ends meet; who are sick and tired of commuting to work in a city with the longest commuting time by far; who get little kick out of taxes being spent on things that do not relate to their everyday struggles; and who know from their own experience that fighting your way out of, say, Bangladesh to Brampton (a 905 suburb) – yes – takes determination, hard work and not too much concern for what their then constituency back home thought of them. Rob Ford, the small time entrepreneur, in his stubbornness just represents them.

So what does this amount to? On day one of his election I thought Rob Ford was a disaster. Mostly because I believe in Toronto’s potential as a great global city that deserves a mayor of a different stature and outlook. But at the same time I also believe that a mayor has to represent the city that voted him in. And boy, Rob Ford fits that bill. So rather than trying to get this ugly representation of what Toronto actually looks like out of sight, the real smart reaction to this scandal would be to say that Rob Ford – with all his preposterous faults – is the one that the people of Toronto chose to represent them. So lets allow him to continue to represent us. And if we don’t like what we see - until we can vote him out - maybe we find the courage to address the underlying issues. Rather than killing the poor guy who currently just displays them.

DM

Photo by Eric Parker, reproduced under the Creative Commons license.

Corporate social responsibility in a global context - a new free download

The new edition of our textbook on CSR, Corporate Social Responsibility: Readings and Cases in a Global Context, written with our colleague Laura Spence, hit the shelves a few weeks ago - just in time for the new academic year. And we're pleased to see that it's flying off those shelves pretty fast too. In its first month alone, the book sold almost a 1000 copies, which is pretty good going - and a big uptick on like-for-like sales from last time around.

The second edition is quite a change from the first. It's still based around readings of classic and recent articles on CSR, but we've updated more than half of these, written three brand new cases, and overall it has a much more textbook-like feel to it. Along with Routledge, the publishers. we've worked hard at refreshing the design and contents to make the text much more user friendly, more lively and engaging, and with a great new companion website to help students and instructors make the most of the book. This includes a whole bunch of annotated links to CSR in practice which help readers see where theory in the book turns into practice as well as links to career resources for budding CSR professionals. Of course, there are also all the usual instructor resources like powerpoint slides and teaching notes, as well as a cool new "Case Club" which has suggested cases for each of the chapters in the book. It really is as close to the complete package for a CSR course kit as we could get it.

To mark the launch of the book, we are making available, completely free, a download of the first chapter, "Corporate social responsibility: in a global context", over at the Social Science Research Network. This is the exact same version as you'll find in the book, downloadable as a pdf. You don't need to sign in, register, or anything. Just go to the right page and click "Download This Paper". It's that simple.

The chapter is a good basic CSR 101 for anyone trying to get their head's around the subject. Among other things, it includes discussion on the nature and definition of CSR, and its emergence in different national contexts (including developing and transitional economies) and even different organizational contexts (such as small and large firms, and public, private and nonprofit organizations). As with the previous edition, although we discuss a whole bunch of different definitions of CSR, we don't introduce a new one. Instead we try and capture what is common across CSR definitions in order to determine the main unique features of the phenomenon. We call these the six core characteristics of CSR, which are shown in the Figure below.

Six core characteristics of CSR

Reproduced from Crane, A., Matten, D., and Spence, L.J. (2013), "Corporate social responsibility: in a global context." In Crane, A., Matten, D. and Spence, L.J. (eds), Corporate social responsibility: readings and cases in a global context, Abingdon: Routledge (p. 9).

As we are often heard remarking, CSR is a field of "conceptual anarchy". Hopefully by reading the introduction, and who knows, maybe reading more of the book in class, at the library, or just for your own enjoyment and education, we can hopefully help you navigate through some of the confusion to reach a clearer, if no less complex, understanding of a sometimes elusive idea.

See also: Our top 10 tips for teaching CSR

Top 10 tips for teaching CSR and business ethics

It's time again for the start of the new school year in universities across much of the globe. For us, this typically means updating course outlines, refreshing our teaching materials and getting ready to hopefully engage and excite a new cohort of students looking to learn about corporate responsibility.

There are many ways to teach courses on CSR or business ethics. Some approaches suit particular professors or groups of students better. But over the years, we've discovered that, as far as teaching in business schools is concerned, there are some fairly common do's and don'ts that can make teaching in this field more effective.  Not everyone will agree with all of these, but here's our list of the 10 best ways to ensure a positive learning experience in ethics and CSR.

1. Be clear and realistic about what you can achieve.
All good courses start with a clear set of learning objectives. This is particularly important in corporate responsibility courses because there are so many different types of outcome that an instructor might be aiming for. Do you want to make your students more ethical managers? Do you want to improve their decision making? Do you want them to be able to practice CSR, or to have a more critical perspective on it? Think about not only what is most important to you, but, most importantly, what you think your students hope t learn. But beware of expecting too much - you're never going to change your students' values in a couple of months of teaching.

2. Use current events to engage students.
Teaching ethics and CSR isn't easy, but one thing we do have an advantage in is that there is hardly a day that goes by without our subject being in the news. This is a golden opportunity to demonstrate to students that what they are learning in the classroom has immediate relevance in the real world, especially when those individual events are part of broader trends, such as globalization, shifts in power, public mistrust of business, etc. Don't waste the opportunity!  

3. Start with a problem or issue, not with a theory
In our experience, business school students respond best when they recognize there's a problem to be fixed and then you give them some theories or concepts to help them do so. So start with a problem - whether a case study, a news story, or your own experience - and then use this to hook them on why theory matters - not the other way round! Starting with the theory and then showing how it applies runs the risk of losing the students' interest too early. It might work for some, but it's a risky strategy.

4. Students’ own experience is valuable class material – don’t waste it!
We are constantly surprised by the rich variety of  experience and opinion that our students have had in corporate responsibility, even without ever having a formal CR position. This is a real treasure chest for teachable moments, when you can flip what you're teaching in the classroom to help students make sense of their own past or current experience. And the rest of the class can learn so much from this too. It brings everything into such clear focus about the here and now rather than some abstract case in a textbook.

5. Don't preach.
In our opinion it is important to avoid imposing a single theoretical position or set of values on students, regardless of what your own perspective on corporate responsibility might be. There are few unequivocal right or wrong answers in this field. So the goal should be to help students understand the breadth of perspectives on the issues at hand and enable them to find their own position not to impose one on them. The professor's job should be more like that of a coach than a preacher.

6. Don’t confuse ‘there are no right and wrong answers’ with ‘there are no better and worse answers’.
The first statement is largely true. The second one is not. One of our most important jobs is to enable students to make better decisions, and to come up with better answers than just simple moral relativism : "my opinion is just as valid as anyone else's". A valid opinion, or a good answer, is one supported by fact, reason, evidence and logic. This may not mean that the answer is right from any universal moral perspective, but is should mean that it gets an A when you're doing your grading - even if you don't agree with the answer!

7. Use (but do not abuse) the business case 
Rightly or wrongly, the business case is the most powerful tool for any corporate responsibility advocate in the workplace. If you can show how a CR initiative will create business opportunities or reduce risks, it has a much better chance of getting approved. So teaching the business case is a crucial part of any course. But there is more to responsibility than only the business case. A good course needs to consider other social and ethical arguments for corporate responsibility beyond the business case so that students do not get trapped inside a purely self-interested mindset.

8. Be mindful of the limits posed by particular forms of business and business system. Not all companies are publicly-held corporations, and not all systems of governance work like the US where the shareholder is king. When teaching corporate responsibility it is essential to help students recognize this, especially if they are using a US textbook. Small firms, privately held companies, co-ops, mutuals, B Corps, social enterprises, etc - these all operate by different rules that give rise to different limits and opportunities for social responsibility. Likewise, the governance of large companies in continental Europe, Asia and and Latin America is quite different from in the Anglo-American system. Corporate responsibility is best understood as a practice than happens within particular constraints - and students need to know exactly what those constraints are in different parts of the world and in different parts of the economy.

9. Provide a good structure for learning. 
This is true for any course, but its easy to forget how important good structure is for good learning when there are so many juicy issues to get your teeth into in our field. An effective course will use a clear relevant organizing framework (such as themes, stakeholders, theories), not just a list of issues. Think about a course as series of building blocks - what's the foundation and what are you aiming at reaching at the pinnacle?

10. Remember to link with other business subjects and courses
Corporate responsibility is not an island. It needs to be linked and embedded with the other subjects that students are taking. Hopefully some of this will be happening in those other courses, but our job as a corporate responsibility professor is also to make those links clear for our students so that they don;t see ethics and social responsibility as add-ons separate from "real" business. So bring in elements of strategy, or marketing, supply chain management, accounting, finance - whatever it is that makes sense in the context of what you are teaching. A joined-up curriculum leads to joined-up thinkers - and one way or another we need a whole lot more of them out there.

Photo ©Schulich School of Business

The “IT-Industrial Complex”

A while ago we commented on whistleblowing in the context of Edward Snowdon’s revelation of the current practices of the NSA. The entire story though is much bigger and has been ongoing for a while now. Just Monday this week, Glenn Greenwald’s partner got detained at London’s Heathrow Airport in a rather unusual manner. Greenwald, as most of us will know, is the journalist who was contacted by Snowdon and has been publishing the crucial pieces of Snowdon’s material in The Guardian.

While in essence the ongoing revelations have the political sphere as the key target, it now more and more emerges that the role of private businesses is far bigger than so far known. From the perspective of scholars interested in business ethics then this case, as it unfolds, raises some rather daunting questions, which – besides being troubling from a normal citizen’s point of view – offer some challenging questions for further research.

1. A new industry

Ever since the Washington Post published Top Secret America we are aware of the fast growing security industry which was created by the US Government in the aftermath of the terror attacks of 2001. What was not that clear is however how far the reach of this industry has gone.

The fact that phone companies provide their records to the NSA, that in principle all our email traffic is public and stored somewhere - just to name a few aspects - takes the entire debate to a new level. It now emerged that in fact most wireless phone providers, many internet service providers (including Google and Facebook) share data with the NSA, as do many classic IT hard- and software producer such as Apple and Microsoft.

When these revelations were made it was conspicuous to see the rather muted reaction of these companies. For long we thought that Google, certainly in their varied approaches to Chinese censorship struggled for an ethical approach here; with regard to their own government though very little of these, in essence similar, concerns obviously played a role. The main defense of these companies overly seems to be the need of compliance. While that argument might carry some way, it is not understandable how for instance Apple, who as a ‘footloose’ company manages to deal with ‘compliance’ to tax legislation in very creative ways just caves in with regard to the privacy of their ‘users’ when the NSA asks for access to their accounts.

So what we see here is not only the emergence of a new industrial sector, which combines rather diverse set of companies (see the list of companies in Top Secret America); it is also not clear anymore where the lines between private business and public administration/government lie. After all Snowdon himself was employed by a private company many of us would primarily remember as a strategy consulting firm (Booz Allen Hamilton). While the blurring of lines between sectors is nothing new, the level and dimensions of the 'securocracy' currently dismantling in front of our eyes in the context of the NSA takes it clearly to a new level.

2. The business model and its ethical implications

Ethical issues in the IT industry have garnered attention for a while in business ethics. Given the numerous court cases, for instance Google and Facebook had to weather recently in the US and Europe it is clear though, that with the growth of the internet and the degree, to which the internet is morphing into a social space, many more questions will arise.

Given that we now know that Google, Facebook, Apple and others are not only basically supplying the government with information but have been monitoring, searching, and organizing our data all long it raises some new questions. In particular it raises the question about the very essence of their business model from an ethical perspective.

Lets stick to the Facebook example. We are told that basically the company will make its money through advertising. Looking at the pathetically annoying adds on our Facebook feeds, for instance, the question really is whether this is the whole story? $800bn for some potentially ingenious advertising platform?

As Facebook ‘users’ we know that we are not their customers. We are their suppliers. What they ultimately want to ‘sell’ is information. This, rather than advertising, is ultimately the business case. This similarly applies to Google, Yahoo, Apple and other who store and ‘use’ many of the data we create through our various internet usages. Most of it is ‘free’ so far, yet still these companies are worth billions of dollars.

This raises some questions, which admittedly can easily be confounded with conspiracy theories. The most important of which is that under the post 9/11 legislation the ‘harvesting’ of our data which for long had been prohibited, is now in full swing. These companies are not primarily in the business of social media, web search or email hosting – they are sources of data about the most intimate details of our lives. While this was always clear to those who bothered to read the small print of the ‘Terms and Conditions’ of these companies, it emerges more and more that this is not just material of value for marketing purposes.

Just today we read in The Guardian that in fact many IT companies such as Facebook, Google, Yahoo, and Microsoft made millions out of providing the NSA with our data. The euphemistic term for this is to see it as a reimbursement for ‘compliance costs’ – but from the perspective of those companies’ CFOs, what else is this other than ‘revenue’? This is certainly the first hard proof that there are clear financial ties between the US government and these companies. But could this also be another hint at what the real business model of these companies is about?

3. The Political role of business

That corporations are political actors in societal governance beyond their direct economic role is by now well established. Looking at the IT-industrial complex though adds some aspects. First, and very much on the surface, it strikes one to see the close ties between senior executives in the industry and the current US government. Eric Schmidt (Google CEO) had and still has key roles in the Obama administration to the degree Google has been called the 'Halliburton of the Obama Administration'; Sheryl Sandberg (Facebook CFO) worked for years in Washington, most notably with Larry Summers.

These are just two examples. Looking at the ferocious reaction to whistleblowers recently, one cannot overlook the commonality of interests between the US ‘government’ and the IT industry. Obama winning a second election was seen by many as a proof that maybe – despite of new campaign financing laws for corporations – business influence on politics is limited and that money alone cant buy campaigns and determine election outcomes. But maybe Obama’s re-election is just THE showcase of what ‘Citizens United’ has done: it got the very president elected whose campaign was crucially supported by Silicon Valley, but whose government now appears to be all long deeply engaged and intermingled with this new industrial network.

As business ethics scholars we see here a new opportunity for research. It is foremost about understanding the structure and value creation models of this industry. But it is also about evaluating the implications of these changes for our democracy, for how society is governed and what the rights and status of citizens in this context morphs into. In short, it is a research field rife with ethical question and issues.

Artwork by Susanne Waldau-te Brake, reproduced under the Creative Commons License