There has been a growing global backlash—especially in countries like the US and the UK—from people who feel they’ve been negatively affected by business practices. Yet we also have people in poor countries clamoring for access to factory jobs. In order to prevent a “race to the bottom” where wages and working conditions drop through the floor globally, the United Nations and many human rights advocates have re-framed these issues as human rights challenges.
Within that arena—as I recently discussed with Todd Landman—stakeholder dialogue is central to bringing business, governments, workers and community members around the table to negotiate better conditions and practices. Stakeholders can range from workers, stockholders, business partners and consumers to people who live in communities affected by business activity. Each one of those people has an interest in what the company does, but those interests aren’t always aligned. Poor people often end up being most negatively affected and least able to negotiate for better treatment.
New research on stakeholder dialogue reveals the urgency and the challenge of figuring out how to more effectively broker company engagement with workers and communities. For example, what types of companies are most likely to be involved in “stakeholder dialogues” over how to prevent abuse at work and how to improve the impact of business on the community? Analyzing the 6,000 companies in the Business & Human Rights Resource Centre database, my students and I have found that stakeholder dialogues are principally happening among extractive companies (e.g., mining) and are far less common among companies involved in light industry (like garment manufacturers or cellphone makers). These patterns are consistent across the world, regardless of region. There is a much bigger sunk cost for companies that drill an oil well or extract copper or mine gold—they have to get minerals out of the ground and they have to negotiate with workers and community members to do so, or they lose money quickly as the mine sits idle. By contrast, light manufacturers have little incentive to negotiate with workers or community members. It’s too much trouble. They can simply pack up a factory (literally putting it in a shipping container and moving through deep water ports from Mexico to Vietnam within a few weeks), and they can find a new community where people are willing to work for low wages. The business and human rights framework is vital to changing the nature of the incentives for companies in the light manufacturing sector, and this is where we need to focus more research.
