Business Respect - CSR Dispatches No#52 - 23 Mar 2003

An email newsletter with news and discussion focusing on corporate social responsibility globally, looking at the companies in the news and the emerging issues. Linked to the website at http://www.businessrespect.net and produced every two weeks.

This web page provides news stories and articles from the newsletters. Newsletters also include links to features on the internet, Mallen's blog, and other resources.

In this issue, we review the issues around the social responsibilities of the American retail phenomenon Wal-Mart.

Welcome

So war is upon us, and as things currently stand the huge power of the US military is making short work of the opposition in Iraq. At the same time, Americans have been shocked to learn of the perception of them that exists in the rest of the world.

On the one hand, there is America the values-driven, democratic society that is trusted by merit to act as the world's policeman - and the issue behind the current dispute is the tyranny of Saddam Hussein. This is the US perspective. On the other, there is America the powerful bully, demolishing international governance standards in order to ruthlessly impose its view upon the rest of the world. George Bush was recently shocked by research that showed this latter version to be the opinion held even by many of the US's allies.

There is an interesting parallel with the subject of this issue's article - Wal-Mart. The world's biggest company, and the epitome of the American dream. Folk hero Sam Walton created a company based on being close to the customer, and focused relentlessly on efficiency to this end. As a result, something immensely powerful has been created - beyond the wildest imaginings of its founder's original hopes.

And now Wal-Mart finds that, in addition to being one of America's most obvious success stories, it has become one of the world's favourite villains. How has this happened? And can a company sacrifice on the altar of permanently low prices and retain its social responsibility?

One of the challenges is that for many of Wal-Mart's customers, low prices are a big feature of the expression of its social responsibility. We thought it would be interesting to try this out on some of the readers here. So, in time honoured tradition, there is a new website vote to this effect. It goes something like this: The most important social responsibility a company like Wal-Mart can observe is: (1) Keeping its prices low, (2) Treating its employees well, (3) Minding its impact on its local communities. Bearing in mind there is no 'all of the above' option, we will be fascinated to see how this one goes!

In the mean time, we hope that the world may become a safer and more stable place for us all very quickly.

News

UK: Business chairmen oppose proposed changes on governance

Eighty two percent of FTSE100 chairmen polled have expressed their opposition to aspects of the Higgs review on corporate governance, according to the Confederation of British Industry.

UK: Business steps up to Corporate Responsibility Index

Business in the Communiy has launched the results of its first Corporate Responsibility Index, with 122 companies participating in the exercise which ranks companies into quintiles reflecting their performance on social responsibility.

India: Pollution control charter for business

The Indian Environment and Forests Minister, TR Baalu, has launched a charter on corporate responsibility for environmental protection that will see agreed rules with industry on emissions and management practice.

Unocal adopts company-wide principles

Unocal Corporation has announced the adoption of new corporate principles covering fundamental rights, such as freedom from discrimination in employment, the elimination of child labour and freedom of association and collective bargaining.

South Africa: Workers win asbestos payout

Black miners have won unprecedented compensation from mining company Gencor, with the company agreeing to set up a trust fund worth 378m rand, with a further 40m to be added subject to further costs from legal action, to enable workers to make claims for health care and support. A further settlement is expected between the workers and Cape plc.

Shell chairman: Essential to take action on climate change now

Philip Watts, the chairman of Shell, has argued that society needs to respond to the threat from climate change immediately - and business can help to bridge differences on the issue.

Saks announces policy against purchasing from Myanmar

Saks Incorporated has announced a policy against sourcing products from Myanmar, according to the Free Burma Coalition. The company, which is the owner of ten major retail chains and 350 stores, told the NGO in a letter that it would avoid goods - "private label and otherwise" - from the country that has seen ongoing issues around human rights abuses.

Warren Buffett: Trust will stay low as CEO pay gets higher

Warren Buffett, the billionaire investor, has said that trust in companies will remain low so long as chief executive pay continues to rise regardless of the performance of their companies.

Big Food Group backs down on 12m compensation from Guyana

With the echoes from Nestle's claim against Ethiopia barely ended, the Big Food Group, owners of the Iceland chain, have backed down having aroused the wrath of debt campaigners by pursuing a claim of more than 12m in compensation against the impoverished state of Guyana.

Australia: Corporate philanthropy struggles in the face of public vilification

Australian businesses contribute over $1.5bn a year to the community only to endure the cynicism - and even vilification - of the public, according to the Business Council of Australia.

Bayer wins drug suit on Baycol

A jury in South Texas has found Baycol innovent of marketing and design defects in its cholesterol drug, Baycol, which it pulled from the market last year.

Halliburton agrees to review operations in Iran

Halliburton, the company linked with US Vice-President Dick Cheney and poised to pick up significant Iraq-war contracts, has agreed to review its operations in Iran having been told by the US Securities and Exchange Commission that it will not be given permission to drop a shareholder proposal on the subject.

Bhopal victims will appeal court setback

Vicitms of the Bhopal gas disaster have said that they will appeal a New York court ruling that dismissed a class action seeking damages.

Philip Morris hit with $10bn penalty over 'light' cigarettes

Philip Morris has been found liable for failing to effectively communicate risks attached with "light" cigarettes in a US court and fined over $10bn. The company was said to have known that 'light' and low-tar cigarettes could be actually more dangerous than the standard alternatives due to increased ventilation which would allow more smoke to be inhaled.

Article

Wal-Mart - From folk hero to corporate monster

Author: Mallen Baker, dated 23 Mar 2003

Few companies attract as much emotion as Wal-Mart. In a short time it has become the biggest and the most successful of its kind, striding across the world as a feared giant, the symbol of all that epitomises the uncaring corporation.

Previous edition - No 51 | Following edition - No 53

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