Business responsibility for human rights in China

In this chapter, we discuss how fluency in traditional culture, in particular gudnxi, can help foreign companies to fulfill their human rights responsibilities. Before doing so, however, it is worth reflecting on the broad array of human rights challenges in China and the moral basis for the expectation that companies should do something about them.

There are, generally speaking, two kinds of human rights responsibilities companies have in China. The first set, which is easier to pinpoint but nonetheless difficult to satisfy, emanates from China’s role as the world’s factory floor and includes worker conditions, labor rights, and the environmental impacts of manufacturing. A second, more diverse and complex set of issues arise from the heavy-handed rule of the Chinese Communist Party. Rights such as free speech, assembly, internet freedom, privacy violations, and citizen surveillance are but the most obvious examples of the human rights issues arising from China’s authoritarian political regime. These two sorts of issues can overlap, as, for example, in the case of the union-organizing rights of workers or the repression of Uighurs in the Xinjiang region.

Why should business have any responsibility for human rights? After all, executives of private companies manage assets owned by shareholders and thus, in many Western jurisdictions, legally owe fiduciary duties to competently manage those assets and return profits for shareholders. The extreme version of this duty was infamously enunciated by Milton Friedman who claimed that the “sole responsibility of business is to increase its profits”

(Friedman, 1970). In recent years, however, the idea that corporations have moral responsibilities other than maximizing profits has become an increasingly accepted notion. A watershed moment in this process was the unanimous adoption by the United Nations Human Rights Council in 2011 of the Guiding Principles on Business and Human Rights (widely known informally as the “UNGPs”). They provide, among other things, that businesses have the responsibility to “respect” human rights: “this means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved” (United Nations, 2011a, Principle 11). This responsibility requires that businesses “seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations . . . even if they have not contributed to those impacts” (United Nations, 2011b, Principle 13b). The UNGPs might be said to possess a certain moral authority by virtue of their reflecting, in some measure, an imperfect consensus of the “global community” about the human rights responsibilities of business. However, it is worth reflecting upon the philosophical foundations that underpin the moral responsibility to respect human rights, which is a particular instance of the moral duty of business to act in a socially responsible manner.

The moral argument for corporate social responsibility can be constructed from a number of philosophical premises. One widely influential approach is based on the idea of a “social contract.” Broadly speaking, the idea of a corporate social contract is based on the political social contract in the writings of John Locke, Jean-Jacques Rousseau, and Thomas Hobbes (D’Agostino, 2019). The “social contract” as applied to business is meant to describe the relationship of trust existing between corporations and society (Donaldson & Dunfee, 1999). The very existence of a corporation as a legal “person” is made possible by society. Society also enacts and enforces the legal norms and institutions that protect private property, the accumulation of capital, and profits. In return for what society makes possible for them, corporations are accountable to society. They have a reciprocal “contractual” moral duty to operate in a manner that benefits society, i.e., in a socially responsible manner. Global businesses are incorporated and enjoy legal

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In the business ethics literature, the seminal work applying social contract theory to the human rights responsibilities of multinational corporations is Donaldson (1989). For other influential approaches, see Wettstein (2009) and Hsieh (2015).

personhood within the jurisdictions and territories of their “home” states. They also operate abroad in multiple jurisdictions or “host” countries, such as China, where they might manufacture or sell their products. Multinational businesses thus enjoy various rights and privileges in both home and host countries. In return, they owe duties to act in a socially responsible manner in both the home and host countries in which they enjoy legal existence and operate (Donaldson, 1989).

A corporation’s moral responsibility for human rights is a particular instance of its duty to act in a socially responsible manner. Human rights are

rights of such importance that they impose correlative duties on actors beyond a nation’s borders. To call something a “human right” is to say that it imposes duties upon others across national borders to honor that right. Human rights are moral rights. Human rights exist regardless of whether a particular national government in actuality protects those rights.

(Santoro, 2009)

Of course, the existence of human rights that impose moral duties with international reach begs a number of crucial questions. Who owes what human rights duties? What duties does business owe with respect to human rights, as opposed to duties owed by other entities such as governments and non-governmental organizations? Just as the existence of corporate human rights duties required philosophical justification for moral persuasiveness, so too does the assignment of particular duties to any particular actors, including businesses (Santoro, 2000).

One way to draw the extent and limits of corporate responsibility for human rights is the idea that business should shoulder its “Fair Share” of the burden of protecting human rights violations and remedying such violations when they occur (Santoro, 2015). The “Fair Share” theory acknowledges that the human rights duties of companies operating in China and elsewhere can be costly in financial terms and strategic consequences, and, therefore, should not be expected to amount to the equivalent of a blank check.

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The argument is sometimes made that corporate social responsibility is a win-win situation by which it is implied that “doing good” or behaving in a socially responsible way will result in “doing well” or making profits. This question of whether ethics "pays” has been discussed,

To be sustainable, corporate social responsibility must be compatible with a healthy income statement and balance sheet. This is not to say that some business activities that violate human rights should not be undertaken regardless of their impact on profits. Indeed, in the case of China, some have argued that it is immoral for multinational corporations to do business there under any circumstances. Although it eventually returned, in the 1990s Lévi-Strauss, for example, initially planned to withdraw from China on the grounds that human rights violations were so serious and pervasive that it would violate their code of conduct to manufacture jeans there (Schoenberger, 1998).

Although a discussion of the full scope of what a Fair Share theory of human rights would require in every instance is beyond the scope of this discussion, in the case of China two bedrock principles apply. First, consistent with the UNGPs, companies are responsible for protecting the human rights of workers throughout their supply chain. We will explore this issue in our discussion of the Apple Foxconn case in the following sections. Second, when they can do so effectively, companies and their agents have a duty to speak up (but not, as we will argue, necessarily “out”) about general human rights conditions, a subject we take up in our discussion of the National Basketball Association.

The idea that Ethical Agility in the form of guanxi should be employed in furtherance of fulfilling human rights duties is consistent with the idea of companies doing their “fair share.” When businesses practice Ethical Agility in protecting human rights they accomplish two things: they increase their effectiveness and, at the same time, they can reduce the potential financial impacts of retaliation from the government. We well understand why this might not sit well with some human rights advocates who seek to pressure business to act in a responsible manner. Speaking out and publicly standing up for human rights often does not entail much in the way of cultural subtlety or compromise. Among the most enduring images of human rights activism are a solitary man standing in front of a tank in Tiananmen Square, Nelson Mandela in a Robben Island jail, or Colin Kaepernick kneeling during the US national anthem. The idea of quiet diplomacy through culturallysensitive communication would not seem to fit within this paradigm of human rights advocacy and progress. However, for businesses operating in and with China, the protection of human rights more often than not is more effectively accomplished in the detailed conversations about management and operating procedures that happen outside the glare of publicity. It is in such conversations that our Ethical Triad and Ethical Agility in the use of guünxi in particular become useful in promoting and protecting human rights.

A final word to be said about cultural fluency and human rights is that inevitably something is going to get lost in translation because of the uncertain and evolving status of rights generally, and human rights in particular. Some have argued that from traditional Chinese perspectives, rights are not a salient concept upon which individuals and organizations interact with one another (Ihara, 2004, pp. 11-30). Ann Kent, in her seminal work describing China’s perspectives on human rights, observed that higher priorities in China have been and seem to continue to be: social order; economic mobility and economic growth; a sense of being respected as a national power on the world stage; harmony within one’s social groups and hierarchies, and; staying out of trouble with the government (Kent, 1993). Though things may change in time—a recent dissertation argues that the right understanding of human dignity, which is held in common between Eastern and Western religious-philosophical contexts, can ground more productive rights-conversations in East Asia and especially China (Ang, 2019)—this rights-disconnect is here to stay, at least for the foreseeable future.

To appreciate how cultural fluency can still help achieve more positive human rights outcomes even in a country where rights are still generally seen as a foreign notion, the work of John Kamm and the San Francisco-based Dui Hua Foundation is exemplary. John Kamm is a businessman who has been traveling to China for five decades. In 2004, he was awarded a MacArthur Foundation “genius” award for his human rights work. Dui Hua has successfully intervened on behalf of hundreds of prisoners of conscience in China. Kamm regularly travels to China and meets with high-ranking government

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For those interested in a deeper dive on the question of the compatibility of East Asian philosophy and human rights, excellent places to start are Bauer and Bell (1999) and Angle (2002).

leaders, often raising extremely sensitive subjects with them. Kamin says “in discussing sensitive issues like political prisoners with Chinese officials, I have found that it is best to keep the meetings as low-key and informal as possible” (Kamm, Interview, 2020). Kamm also emphasizes that one of his major goals is to help China be better understood and respected in the West. “Most important,” says Kamm,

I try to convince my counterparts that releasing someone that the government sees as an enemy holds benefits for China, being as specific as possible. I approach the enterprise with respect and in a spirit of friendship and trust. I am results-oriented. I never criticize senior officials by name, and when the Chinese government does good, I find ways to recognize it.

Kamm’s approach of mixing guanxi with respectful criticism works. When a Chinese official was asked about Kamm, they replied, “He loves China. He shows respect. He is constructive and realistic” (Santoro, 2009).

 
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