|
It may be difficult to form a consensus on broad issues such as human rights or environmental concerns, but the future of sustainable economic development in Asia depends on moving these issues forward.
That was the conclusion among panelists representing the private and nonprofit sectors during a discussion at the Asia Business Conference 2002, held February 2 at Harvard Business School.
While noting that a discussion of values and ethics was particularly well timed in light of Enron's collapse, Richard Smith, president of Eli Lilly Asia, suggested that Enron's case is the exceptiongenerally speaking, corporate America doesn't deserve its bad rap. "The social consequences of globalization often fall on the shoulders of corporations, not governments," he said. Doing business in Asia, Smith continued, requires skill, sensitivity, and persistence; success is dependent on relationships built on honesty and a sense of mutual responsibility.
Offering the perspective of small business, Taipei-based architect E.C. Liu presented a humorous slide show of the sites in Shanghai and Beijing where he received traffic tickets. The confusing signals and signage made his point: Gray areas in China's laws abound, whether regulations concern traffic or corporations.
We need to create binding ethical standards for corporations that feature a hybrid of elements from government and financial institutions. |
Arvind Ganesan, Human Rights Watch |
"Some of it is intentional, and some of it is sloppiness," said Liu. "Some of it is just illogical."
The American dreamin China?
From another perspective, said Liu, the development of roads and the increasing number of drivers demonstrates how much has changed in urban China since he arrived nine years ago. "Before, people were receiving government coupons for cooking oil. Now, everyone is preparing for the American dream of a home and a car," he said.
True, but economic growth creates other concerns, suggested Arvind Ganesan, director of the Business and Human Rights Program at Human Rights Watch. "Today, we're finding gaps in accountability as the global marketplace develops."
As an example, he cited the construction of a power plant in Dabhol, India by a subsidiary of Enron. Despite the World Bank's assessment that the plant was economically infeasible, the project proceeded. As resistance grew, Ganesan said, local policereimbursed by Enronbeat and detained protesters. An investigation of the project and its fallout continues as congressional hearings examine Enron's possible influence on U.S. energy policies.
Enron's handling of the Dabhol project was a bellwether, said Ganesan, revealing some of the same flawslack of transparency and willful dismissal of valid criticismthat led to its fall.
Calling on corporations and international institutions like the World Bank to assume greater social responsibility, Ganesan said, "We need to create binding ethical standards for corporations that feature a hybrid of elements from government and financial institutions. Human rights are in the interest of the public goodthe moral hazard is too great to allow voluntary enforcement."
"Clearly, there are values more important than shareholder value," agreed moderator Margaret Blair, a visiting professor of law at Georgetown University. "It's a difficult balancing act for corporations to handle."
Innovation needs protection
Eli Lilly meets that challenge, Smith said, by participating in public health strategies such as a program for Chinese women focused on post-menopausal health issues. The company supports subsidized drug programs in developing countries, he added, which opened the door to a pointed question from the audience: Is universal access to the drugs that cure life-threatening illnesses a basic human right?
"We believe that innovation blooms where international patent rights are protected," Smith answered. After a drug is introduced in the United Statesa lengthy, capital-intensive processit takes another forty-seven months for it to enter the Chinese market. By that point, he said, the drug is near the end of its patent life, implying that pharmaceutical companies have little time to recoup their investment in research and development.
"I see the availability of drugs as a right-to-life issue," said Ganesan. "U.S. trade agreements have stringent rules regarding international patent rights. I don't hold the blanket view that they're a bad thing."
Returning to the question of international standards for human rights and environmental issues, Blair wondered how such principles would be enforced, particularly when Enron's story demonstrates how difficult it is to put more concrete accounting standards in place.
"It's a challenge that requires enormously creative minds," she told the audience. "I hope you'll help us work on these issues."