Intervention in Iraq has raised important issues of corporate responsibility, argues Gerry Hagelberg
The US-led invasion of Iraq and its aftermath will keep ethics wonks busy for years. There is plenty to chew over: the legality and legitimacy of the war; its mutating rationale (threat from alleged weapons of mass destruction, surgical extirpation of a malignant source of terrorism or liberation of the Iraqi people from tyranny); the selective morality of punishing one oppressive regime while rewarding others; the proportionateness of means and ends, and so on, down to the pretence of a coalition, cousin to a poker-player’s bluff that a pair of knaves backed by a couple of deuces amounts to a full house.
Students of corporate governance and social responsibility will recognize parallels in their field – conflicting interests of owners and agents, undisclosed managerial decisions and actions, executive rewards out of tune with shareholder returns, corporate charity coupled with corporate malfeasance, mix-and-match choice of norms, exaggerated claims, et cetera.
Beyond philosophical comparisons, however, the Anglo-American intervention in Iraq has thrown up direct questions of corporate conduct.
Some observers feel that companies, particularly UN Global Compact signatories, should protest breaches of international law and violations of human rights. A worthy sentiment, but is this a reasonable demand? Of course, a company is an ‘organ of society’, in the words of the Universal Declaration of Human Rights, but so are pigeon fanciers’ associations and every other sort of club.
It does not advance the cause of CSR to burden companies with requirements they cannot meet. All they can be held to is not ‘to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein’, as the Declaration says. This also means not aiding and abetting such destruction, though admittedly there are huge grey areas here. The real challenge for those concerned with CSR is to reduce these grey areas as far as possible.
One immediate issue is the role of big corporations in rebuilding Iraq. The last shot had not yet been fired when the scramble began for the spoils of war. The first major beneficiary is Bechtel, the private US construction group, awarded a $680million (€620m, £433m) contract by the US Agency for International Development after the briefest of contests, limited to what the Financial Times described as ‘large and well-connected US construction companies’. The deal gives Bechtel, whose board is graced by Republican luminaries, the inside track to billions in further contracts. Corporate profiteering? Heaven forfend. Call it public-private partnership.
Gerry Hagelberg is a commodity analyst.