Kansainväliset sopimukset Kalvot 1a Kansainvälisten markkinoiden normiympäristö Yhteiskuntavastuu (CSR) ja yritysetiikka Matti Rudanko

Responsibilities of Companies 1 OECD: duties of states industrialized states (Finland 1969) economic growth and employment stability of the financing system environment, development cooperation WTO: duties of states most favored nation (mfn) principle discrimination ban national treatment protection clause against market disruptions settlement of disputes special treaties Kansainväliset sopimukset kalvot 1a

Responsibilities of Companies 2 WTO special treaties (free trade) TRIMS: trade related investment measures TRIPS: international protection of industrial property rights TBT: technical barriers to trade (e.g. standards) GATS: trade in services UNCTAD (duties of states) developing and transition economy countries the customs preferences system GSP raw materials and technology; environment Kansainväliset sopimukset kalvot 1a

Responsibilities of Companies 3 Rio (-92) and Kioto (-98) conferences on environment and trade UN climate, biodiversity the rights of states to their territories (with no damage to others) openness of trade; discrimination and disguised barriers share of economic growth to all and sustainable development Other environment treaties CITES 1973: endangered species Montreal protocol (in force 1988): ozone Basle treaty: dangerous waste includes Finland Kansainväliset sopimukset kalvot 1a

Legal Obligations of Companies OECD, UNCTAD, environmental treaties have an impact on the environmental legislation of the member states OECD: e.g. criminalization of bribery in international trade international competition and marketing law (EU) harmonization of national rules: national supervision supranational authorities (EU rules of competition) Kansainväliset sopimukset kalvot 1a

Law and Morals In a developing legal system the rules are modified by morals notice e.g. the proposed MAI and TTIP treaties the role of morals the (moral) purpose of a business undertaking is to be profitable (instrumental – inherent value)? relation to other moral values? morals as a (pecuniary) image value Kansainväliset sopimukset kalvot 1a

law as a tool of business management Law and Morals 2 knowledge of the legal development and different legal orders offers a touch with moral development (and vice versa) this role is especially important in international trade contractual relations and tax planning marketing, finance labor relations and environment management etc. law as a tool of business management Kansainväliset sopimukset kalvot 1a

Lawyering as Justice E.g. rules on the just arrangement of business relationships crystallizes ethics and other ”value dimensions” equity, equality, aspects of income distribution (i.a. remuneration of labor and capital) no controversy with efficiency, at least with that of Pareto type (no one’s welfare is not reduced), but there is mutual dependency between them) cf. Kaldor-Hicks efficiency with a hypothetic compensation Kansainväliset sopimukset kalvot 1a

Profitability as a Moral Value an instrumental value for realizing other values national economy: economic growth, employment profit as an incentive: e.g. technical progress (cf. the socialist ideology) “byproduct” a good business idea prevents alienation (owners, workers) e.g. shopping as an experience (clients) Kansainväliset sopimukset kalvot 1a

The Changing Role of Firms ”marketization” (privatization) multinationals are taking over more and more global activities from states environment social values (e.g. equality, distribution of income, values of labor life, human rights) the contents requirements of the decision-making in companies the values of companies Kansainväliset sopimukset kalvot 1a

Case 1 A multinational uses wood from a tropical rain forest as raw material that is processed elsewhere the government of the country of origin of the raw material supports the firm because it brings money as a price of the stuff (and other payments, even “unofficial” ones) and improves employment the government is alleged to violate the human rights of a minority lumbering of rain forest has caused evacuation of the population Kansainväliset sopimukset kalvot 1a

Case 2 The foreign business partner of firm A may use child labor because of what civic organizations have demanded a boycott of the business partner the firm has activities in “rogue country” X that is on a black list of civic organizations as well and is at risk to fall into boycott by the “international community” Kansainväliset sopimukset kalvot 1a

Case 3 The international marketing of consumer goods effected by a company is considered offensive in countries in which different views of equality prevail the company investing in environment management has promised a share of the profit from the campaign for the benefit of endangered species Kansainväliset sopimukset kalvot 1a

Case 4 The funds marketed by a common fund invest i.a. in tobacco and arms industry a pension insurance company considers buying fund units in question because it is well-grounded from the point of view of rational investment activity Kansainväliset sopimukset kalvot 1a

Impact on the employment and wealth of the target country Argumentation, case 1 Impact on the employment and wealth of the target country cf. Rawls: a process is just if it improves the position of the weakest (increased income differences do not matter) Impact on the environment law: Rio (bio-diversity), Kioto,CITES cf. MAI project the social structure of the target country governmental system human rights Kansainväliset sopimukset kalvot 1a

Argumentation, Case 1, cont. The international distribution of income (raw material / value added by processing economic efficiency) transaction costs environmental costs of logistic solutions Kansainväliset sopimukset kalvot 1a

A Solution Scheme Kansainväliset sopimukset kalvot 1a + profit + other business economic value added - legal sanctions: probability of realization (e.g. the effectiveness of control) x estimated monetary value (x time factor) etc. - quantifying a moral reaction is difficult - assessing the social aspect (i.a. human rights) is likely to be impossible Kansainväliset sopimukset kalvot 1a

Argumentation, case 2 The social significance of employment the possibility of social influencing by corporate culture The image as as profit seeker by social dumping (case 1) the probability of a state boycott could be in favor of a withdrawal as early as possible (case 2) a boycott would probably weaken most the situation of the weakest the possible interference by competition authorities with the boycott (case 1)? Kansainväliset sopimukset kalvot 1a

Argumentation, case 3 The legal norms on marketing have to be checked The result of the campaign the possibility of social influencing by advertising moral judgment: the reaction by whom image questions equality “cultural imperialism” The legal norms on marketing have to be checked national / supranational (EU) self-regulation of the trade: the basic international rules of advertising the influence of the reactions on the result Kansainväliset sopimukset kalvot 1a

“the dilemma of the bishop” (Ahlfors) Argumentation, case 4 Business economic criteria the social responsibility of a pension insurance company No legal barriers questions of image “the dilemma of the bishop” (Ahlfors) Kansainväliset sopimukset kalvot 1a

Moral judgment in world trade 1 Ethics of obligations (means) - ethics of consequences e.g. the boycott and its consequences business ethical criteria (L. Koskinen, Mikä on oikein [What is Right] 1995): evaluation by the following criteria honesty environment personnel policy social responsibility business idea Kansainväliset sopimukset kalvot 1a

Moral judgment in world trade 2 An evaluation scale +3 innovations, on top of the moral development Exemplary activity, active improvements +2 Investments to comply with the spirit of the law +1 Complying with the letter of the law, avoiding legal sanctions -1 Repeated admonitions from authorities Sentences e.g. of environmental offences -2 Kansainväliset sopimukset kalvot 1a