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Globalisation and human rights

We see a fundamental link between acting responsibly and generating profits

We believe that the globalised economy, with more liberal trade, freer movement of capital, and opportunities for companies to transfer skills, technologies and best practice can, over time, bring many benefits in prosperity, improved living standards and more social equity.

We also recognise that for some countries the going is tough.  The pace of change and the speed of capital and goods moving around an increasingly ‘borderless world’ have given rise to concerns.

There have been angry protests about globalisation at meetings of the G8 countries, the world’s most developed nations, and questions are asked about the ‘power’ of multinational companies and whether governments can really manage national economies.

Human rights are a key area of concern, including much debate about the role of business.

Human rights

As trade barriers fall and multinational companies operate in more countries around the world, what is their role in countries where governments’ human rights records have been criticised?

Is it ‘collusion’ simply to do business there?  If a business pulls out of a country, does it add to pressure for change, or simply remove fair employment opportunities and an example of good practice?  Should businesses attempt to influence governments on human rights?

We believe that multinational companies can lead by example and use their influence where they can, such as in employment standards, business practice, environmental management and community support.

But if a government is thought to be failing in its duties to its citizens, we do not believe that business can, or should, take on the role of international diplomacy or direct countries on how they should be governed.  However large and successful they are, companies do not have the ability nor the mandate to step into areas of authority or decision making that are rightly for governments or communities.

The capacity of business to lobby on human rights is generally limited to human rights in the workplace, although business has legitimate cause to express concern if human rights violations hamper its ability to operate effectively and responsibly.

We recognise that we have a role in addressing human rights issues that are within our sphere of influence in the countries where we operate.  We expect our companies to respect the universally recognised fundamental human rights of all their employees and we support the United Nations Global Compact’s guiding principles on human rights.

Find out more about how we manage human rights issues in Our approach to human rights.

Are companies “more powerful than governments”?

We do not believe that global companies have, or seek, the power that is sometimes attributed to them. 

As globalisation changes the competitive business environment, one trend has been more mergers, making some multinationals much larger.  But the main goal of mergers is not ‘power’.  In a globally competitive economy, companies are continuously pursuing efficiency, to create value that ultimately benefits many stakeholders. 

Companies can also be affected by the pace of change and several once-dominant businesses have suffered severely from intensified global competition.

But in the face of concerns about the perceived ‘power’ of multinational companies, we recognise that it is increasingly important for companies to demonstrate that they are operating responsibly.

Profits and living standards

We see a fundamental link between acting responsibly and generating sustainable profits.  We believe that companies should be prepared to ‘think long’, recognising that their investments are part of a country’s development goals.  Groups such as ours expect to transfer world class technology, management know-how and international best practice in areas such as quality, environment, health and safety protection, employment and corporate governance.

Globalisation offers more investment opportunities for business, and also opportunities to many countries to develop their economy by acquiring companies’ capital and expertise.

Investment and wealth creation underpin rising living standards.  Company profits give fair returns to investors, and also fund social goals through taxes and other corporate contributions.  Companies in turn benefit from rising living standards through increased spending by consumers.

When a company invests in a host country, a far larger share of its gross earnings remain there - as wages, taxes and payments for services and materials - than flow out in dividends to foreign shareholders.

The tobacco industry contributes to the economies of over 100 countries.  It provides employment for more than 100 million people and major revenues for governments.  Our own business enables governments worldwide to gather more than £30 billion a year in taxes, while our companies and associate companies employ over 90,000 people.

Respecting cultural diversity

In business and in issues of development, the environment, labour standards or appropriate regulation, we believe that local self-determination is vital.  National governments and citizens are best placed to define national priorities and the actions that will work in their societies.

Global regulations and standards that seem reasonable in more advanced economies may risk alienating emerging nations and undermining their competitiveness.

While we support universally recognised fundamental human rights and high standards of ethical behaviour, we are concerned that a clumsy pursuit of global standards can become a form of moral and cultural imperialism, based on assumptions that ‘west is best’.

We believe that multilateral organisations, governments, NGOs and multinational companies should respect local integrity and seek to work in a spirit of constructive partnership to address the complex issues at stake, taking care not to impose ‘global solutions’ that inappropriately force the values and priorities of any one country on another.

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