WHAT CAN BE DONE?

An alternative to Corporate Social Responsibility (CSR)

In cases where US companies do commit egregious acts overseas, what can or should be done? Can companies be held accountable by the public sector even in the absence of activist-imposed CSR standards? Consider the following example.

In December 2000, the Washington Post published a series of articles alleging widespread patient abuse in Third World countries on the part of American pharmaceutical companies. By conducting their trials overseas, the pharmaceutical companies were able to circumvent normal FDA review of their drug trials. In one particularly disturbing case, a 10-year old Nigerian girl suffering from meningitis was kept on an experimental drug that was being tested long after her symptoms had begun to worsen, even though alternative treatments were readily available. The girl died after three days, but some suspect that her death could have been prevented had she been switched over to a conventional treatment.

The Cato Institute's Daniel T. Griswold sees this case as one where it is necessary to take into account differences in attitudes in the developed and undeveloped countries. "It may be in the interest [of somebody in the undeveloped country] to participate in some sort of trial where it wouldn't be for somebody in a more developed country," says Griswold, who further notes that under those conditions it would be interfering with that individual's freedom for a group in a developed country to forbid the trial.

Griswold also points out, however, that conducting such a trial might not be in the best interest of a company in terms of public relations back home. "It is an alternative for the home country governments to impose standards on the behavior of corporations based in that country, and put limits on their behavior in other countries. . . You can argue about the legality of that, the morality of that, but at the end of the day it’s a constraint our political system has put on companies that are based here," he says.

But the philosopher David Schmidtz would place some of the burden on corporations. Says Schmidtz, "I think what multinational companies do in foreign companies should be done with more publicity, for better or worse. Companies should resolve to run businesses they can be proud of, and they ought to make sure that, when challenged by activists, they will have nothing to hide."

(Source: Corporate Social Responsibility and Globalization: A Reassessment by Randall Frost)