1. Welcome Corruption, Child labor and International Business  Dr. Satyendra Singh Director, Centre for Emerging Markets Professor, Marketing and International Business Editor, International Journal of Business and Emerging Markets University of Winnipeg CANADA

2. Outline  The ethical issues  The premise  The moral philosophies  Corruption and Child labor  How to deal with these issues  Macro, micro and personal levels  Q & A 2

3. The Ethical Issues  Corruption  Child labor  Human rights  Environment  Hiring practices  Globalization  … 3

4. The Basic Premise  Corruption  Child labor  Symptoms vs. problem (Einstein)  Morally wrong  Unethical  Philosophically (Poverty, Lack of education,…) f 4

5. The Moral Philosophies…  Ethics  moral principles or values  Ethical Fundamentalism  Search outside source ethical rules, but  Cannot decide right/wrong themselves  Eg. drining alcohol  Utalitarianism  Maximum good to society, but  What is good  E.g. Governments – left vs right 5

6. The Moral Philosophies  Kantian Ethics – duty, deontological  Rule – consistency & reversibility  What is rule if exception becomes rule!  Rawls’s Social Justice Theory  Fairness, peace and harmony  Social contract – a bit ideal -- Bhutan  Ethical Relativism – feelings, no rule  Individual moral standard – debatable 6

7. Corruption  Pay to get work done  Caused by usually poverty, greed…  Salary lasts for 3 weeks only…?  Survival vs. meeting basic needs  For  Tax, commission, compensation  Against  morally wrong and illegal  Compromise personal beliefs  Promotes and creates dependence on it  Benefits recipients; deceives stakeholders 7

8. Kinds of Corruption  Corrupt Individual  Individual primary beneficiary at the cost of organization  Corrupt organization – even country!  Selection  Socialization 8

9. Child Labor (300m)  Poverty—survival  urbanization  If outlaw (Harkin Bill) short- and long-term  ↓ Family income  ↓labor supply  ↑ Adult wage  children go to school  ↑ skills  ↑ productive  ↑ wages  ↑ family welfare if demand persists  But, ↑ wages  ↓ # of jobs  Effective only if children go to school 9

10. How to deal with these issues  Corruption  Child labor  Acceptable child work Vs. objectionable child labor 10

11. Trends Against Corruption and Child Labor  Transparency International  Foreign Corrupt Practices Act (US)  Corruption of Foreign Public officials (Canada)  OECD Anti-bribery Initiatives  Harkin Bill – Trade Ban  ILO Convention on Minimum Age138  UN Global Compact (UNGC 2007)  HR(2), Labor (4), Environment (3), Anticorruption (1) 11

12. UN Global Compact…  1.Support, respect and protect HR  2.No HR abuses in businesses  3.Freedom of association and right to collective bargaining  4. No forced/compulsory labor  5. No child labor  6.No discrimination in employment 12

13. UN Global Compact  7.Support precautionary approach to environment challenges  8.Promote environmental responsibility  9.Development and diffusion of environmentally friendly technologies  10.Work against all forms of corruption 13

14. UN Global Compact -- 5 14 Abolition of child labor –ILO conventions  Minimum Age Convention No. 138 –Minimum age for admission to employment or work Developed countries Developing countries Light Work 13 Years Light Work 12 Years Regular Work 15 YearsRegular Work 14 Years Hazardous Work 18 YearsHazardous Work 18 Years –Children have distinct rights Child labour is damaging to a child’s physical, social, mental, psychological and spiritual development Deprives them of childhood, dignity; separates from families ILO Convention 182 worst form of child labor – no ratification

15. UN Global Compact -- 10 15 Work against all forms of corruption –Corruption the abuse of entrusted power for private gain –Extortion When asking or demand is accompanied by threats that endanger the personal integrity or the life of the person –Bribery, Transparency International gift, loan, fee, reward… from a person to do something dishonest, illegal or a breach of trust –Steps to fight corruption Internal: Anti-corruption policies within organizations External: Report corruption in the annual Communication Collective: Join forces with industry peers, stakeholders…

16. At Macro Level  Education – compulsory- national strategy  E.g., India, Ghana, Kenya  Ethics - required course – must  Awareness – landmines – Pr. Diana  Experiential, application-oriented education  E.g., build capability  Governments enforce moral guidelines  Government policies for fair trade  E.g., GM Food, Subsidies, Cocoa price… 16

17. At Micro Level  Strategic — MNCs (Mobil/GM/Wal- Mart/Toyota) have power -- >$200B-300B  School and day care for children  UN Global Compact implementation  Contribution to country’s development  Mode of entry  IJV vs. Wholly-owned subsidiary  Ethics Officer  Pay fair taxes, reduce transfer pricing 17

18. At Personal Level…  Personal moral compass  Organizational Culture  Whistle-blower legislation  (Un)realistic performance goals  Volunteer for social cause  E.g., Scotia Bank  Winnipeg Public Library Board  Win-win situation 18

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22. Conclusion  MNCs have power, and thus can  ↑ Education  ↓ Poverty  ↓ Corruption  ↓ Child labor  Trade ban only may not work  Treat problems, not symptoms  Fair trade is needed, so is political will 22

23. References  Bachman, S.L. (2000), “The political economy of child labor and its impacts on international business,” Business Economics, July: 30-41  Pinto, J., Leana C.R. and Pil F.K. (2008), “Corrupt organization or organizations of corrupt individuals?” Academy of Management Review, 33(3): 685-709.  UNGC (2007), http://www.unglobalcompact.org/AboutTheGC/Global_Compact_Logo/GC _Logo_Policy.html http://www.unglobalcompact.org/AboutTheGC/Global_Compact_Logo/GC _Logo_Policy.html  Singh (2010), UNGC slides www.uwinnipeg.ca/~ssingh5/Em/em-human-rights.ppt 23

24. Questions?

25. Thank you  for gracing the talk