Skip navigation

Balancing commerce and rights

There are now textile labelling standards to help monitor labour conditions in Chinese factories making low-cost clothes for export.

Many Chinese companies have also adopted workplace corporate codes of conduct -- imperfect and hard to enforce as they are -- pertaining to child and forced labour, health and safety and the environment, for factories making goods sold abroad.

For Margaret Cornish, head of the Canada China Business Council, these developments are positive aspects of flourishing trade between the two countries. "The more they dealt with foreign firms, the more they absorbed various standards from Western ways of doing business."

This is also the approach of Canada's Export Development Corporation, which believes in engaging with "less than perfect" governments instead of freezing them out.

"Trade is a powerful means of effecting positive development on many fronts," says EDC executive vice-president Eric Siegel. "When properly sustained, trade creates a climate than can generate political stability and social development -- not just dollars and cents."

But, as a business, how do you navigate the turbulent ethical and human rights waters in a totalitarian state such as China?

On the cyberspace frontier, for example, critics say foreign high-tech equipment could be used to suppress freedom of speech over the Internet. The issue has been raised over Beijing's development of its so-called Golden Shield project, to create a nationwide network of digital surveillance.

The Ottawa-based National Research Centre, which sponsored a "security technology" trade mission to China in preparation for the 2008 Olympics, comes down squarely on the side of changing from within. "I don't believe in the long run the kind of approach of preaching from afar actually will make material changes in human rights in China," NRC president Michael Raymont says.

"We would expect these technologies for the purposes for which they were developed and in the spirit in which they're used in Canada," he said, adding that it's naïve to think that defensive technologies cannot also be re-engineered to be used in "nefarious" ways.

"We export Candu reactors, nuclear technology to the Chinese. We export airplanes, we export helicopters to the Chinese. Every single one of these things could be used -- if you take such a negative view of it -- in a negative way."

And he notes that there are no government controls or United Nations sanctions on exporting technology to China. It's a point also made by Nortel Networks, which has been creating and building sophisticated communications networks around the world for decades. China is a big customer.

Spokesperson Tina Warren says Nortel follows the rules and doesn't do business in "countries with a record of persistent human-rights violations where the United Nations or multinational agreements have implemented export controls or sanctions."

In a report released earlier this year, Amnesty International warned that foreign corporations may be indirectly contributing to human-rights violations or, at the very least, failing to give adequate consideration to the implications of their investments.

So how can a Canadian business square the potential value of a China connection with issues of human rights and ethical conduct?

The Washington-based Kenan Institute of Private Enterprise, which recently convened a working group on corporate social responsibility and China, recommended that companies doing business there press their counterparts to:

improve the rule of law;

promote worker rights and improve workplace conditions;

encourage more companies to be more socially responsible.

Mr. Siegel says the main ethical challenges are the environment, human rights, corruption and transparency. To deal with them, he says, a growing number of Canadian companies are embracing principles of corporate social responsibility, which includes not just legal standards but also values such as "honesty, respect, fairness and integrity."

Potential EDC-financed projects undergo a environmental review and an assessment of "social impacts" and the potential for corrupt practices.

Sometimes, there are creative ways of dealing with ethical quandaries.

Leonard Brooks, a University of Toronto professor of business ethics, cited one Canadian company that refused to pay a bribe in China but offered, instead, to contribute to a community park.

"The company rebuffed requests for payoffs to purchasing and local officials, but indicated that they would be prepared to contribute to the local community. In the end, this proved to be a very successful strategy both abroad and at home."

Recommend this article? 0 votes

Back to top