Intervention in Iraq has raised important issues of corporate responsibility, argues Gerry Hagelberg
The US-led invasion of Iraq and its aftermath will keep ethics wonks
busy for years. There is plenty to chew over: the legality and
legitimacy of the war; its mutating rationale (threat from alleged
weapons of mass destruction, surgical extirpation of a malignant source
of terrorism or liberation of the Iraqi people from tyranny); the
selective morality of punishing one oppressive regime while rewarding
others; the proportionateness of means and ends, and so on, down to the
pretence of a coalition, cousin to a poker-player’s bluff that a pair
of knaves backed by a couple of deuces amounts to a full house.
Students of corporate governance and social responsibility will
recognize parallels in their field – conflicting interests of owners
and agents, undisclosed managerial decisions and actions, executive
rewards out of tune with shareholder returns, corporate charity coupled
with corporate malfeasance, mix-and-match choice of norms, exaggerated
claims, et cetera.
Beyond philosophical comparisons,
however, the Anglo-American intervention in Iraq has thrown up direct
questions of corporate conduct.
Some observers feel that
companies, particularly UN Global Compact signatories, should protest
breaches of international law and violations of human rights. A worthy
sentiment, but is this a reasonable demand? Of course, a company is an
‘organ of society’, in the words of the Universal Declaration of Human
Rights, but so are pigeon fanciers’ associations and every other sort
of club.
It does not advance the cause of CSR to burden
companies with requirements they cannot meet. All they can be held to
is not ‘to engage in any activity or to perform any act aimed at the
destruction of any of the rights and freedoms set forth herein’, as the
Declaration says. This also means not aiding and abetting such
destruction, though admittedly there are huge grey areas here. The real
challenge for those concerned with CSR is to reduce these grey areas as
far as possible.
One immediate issue is the role of big
corporations in rebuilding Iraq. The last shot had not yet been fired
when the scramble began for the spoils of war. The first major
beneficiary is Bechtel, the private US construction group, awarded a
$680million (€620m, £433m) contract by the US Agency for International
Development after the briefest of contests, limited to what the
Financial Times described as ‘large and well-connected US construction
companies’. The deal gives Bechtel, whose board is graced by Republican
luminaries, the inside track to billions in further contracts.
Corporate profiteering? Heaven forfend. Call it public-private
partnership.
Gerry Hagelberg is a commodity analyst.
