Organisations: Walk your Talk!
25/04/2022
The invasion of Ukraine prompted Western companies to withdraw from Russia. There are several reasons why Apple and other companies immediately stopped operations there, while McDonald’s and Coca-Cola wanted to stay longer. Either they have limited exposure to Russia (because the Russian economy is relatively small), they are concerned about the safety of their workforce, or they benefit from reputation gains if they leave the country quickly. As a matter of fact, a majority of Americans support the companies that are taking action rather than just making a statement.
Aggressive invasion versus human rights
Some CEOs are defending the decision to pull out, arguing that the war and the continued threat to peace and stability are not in line with their values. But then we don’t understand why companies are withdrawing from Russia because it attacks another country, but not withdrawing from countries where human rights have been violated for decades. Are human rights also fundamental values? Isn’t the aggressive invasion of Ukraine a symbol of a lack of understanding of what those values are? We must dare to ask the question about the place of companies that want to do business in a socially responsible way in countries where human rights are violated.
Before the Ukrainian war, many companies had no problem doing business in Russia, where Vladimir Putin had critics such as Anna Politkovskaya and Alexander Litvinenko murdered. It was no problem for the Belgium Prime Minister Jan Jambon (New Flemish Alliance, N-VA) to go on a trade mission to the United Arab Emirates (UAE) last year, where British student Matthew Hedges was sentenced to life in prison because his investigation led to something the local elite cannot tolerate, where democracy is non-existent and medieval torture practices are practised. Cisco Systems supplies China with technology used to identify political dissidents. When companies suggest that Russia’s invasion of Ukraine goes against their values, does the detention and elimination of critical citizens fit in with those values?
The myth of the free market
It has long been suggested that a dictatorship that tolerates no critics today can become a peaceful democracy tomorrow through the wealth creation of the free market. Why should we worry about human rights when it is only a matter of time before we see the democratic legacy of the free-market mechanism flourish? Didn’t Francis Fukuyama in his essay “The End of History and the Last Man” declare that nations that embrace capitalism and the free market evolve into peaceful liberal democracies because the prosperous middle class would pursue freedom and political power? This may be an interesting idea, but Beijing and Moscow weren’t impressed (and neither was the UAE).
Thirty years after The End of History and the Last Man, Russia and China continue to strive for an authoritarian/totalitarian system. They try to combine capitalism with state intervention and place an increasing emphasis on nationalism. Whether Russia and China are prepared to become free, peaceful democracies through the wealth creation of the free market remains a big question. In fact, in recent years, rather than undergoing evolutionary liberalisation, the Leninist party-state in China has reverted to a form of neo-Stalinist rule over an increasing group of wealthy but silenced citizens.
At the United Nations, both countries continually resisted Western attempts to put pressure on governments that dealt repressively with their populations. Thus, according to Robert Kaplan, an “informal league of (state capitalist-oriented) dictators, supported and protected by Moscow and Beijing,” emerged.
Many companies withdrew from Russia, but are still active in Belarus, which is fuelling the war and persecuting independent journalists. Free trade, it has been suggested, creates peace. But does that also apply if dictatorships are involved in that free trade or when countries systematically rob and oppress other people?
Suppression
We do not understand how companies make a case for corporate social responsibility, but do not withdraw from countries where citizens critical of the regime are killed or who support repressive governments with anti-democratic ideas. They only make it stronger, strengthen the war chest, and help suppress democratising movements by giving the nomenclature the means to professionalise oppression.
Let the decision of companies to take a stand in the Russian-Ukrainian conflict act as a wake-up call to relaunch the debate on corporate social responsibility and ethical finance, free from opportunism and emopolitics.
This is an adapted version of an opinion article that was published on the website of De Tijd, written by Harry Hummels – Professor of Ethics, Organisations and Society at Maastricht University – together with Jan Rosier – Professor of Management at University College Dublin/Trinity College – Benjamin De Mesel – Professor of Moral Philosophy at KU Leuven (Higher Institute of Philosophy) – and Ides Nicaise – Professor at KU Leuven (HIVA, Research Institute for Work and Society).
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Harry Hummels
Professor of Ethics, Organisations and Society
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