Second decade of this new millennium mega trend is ‘responsible business’. The consumer movement and human rights activists have become increasingly empowered, and they actively publicize news of unethical conduct of companies. These in turn have tremendous political ramifications in India. Operations of many multinational and Indian corporations have been put under scrutiny by these groups. They demand the companies to have appropriate Code of Ethics (CoE); to end the use opportunistic and discriminatory business practices; or to establish fair wage policies for the local employees, or to have the clear cut public relation norms so far as paid news and derogative advertisements are concerned, etc.
Active implementation of ethical conduct in business is a relatively new phenomenon, although its roots can be traced in history; business ethics is as old as business itself. It is very much in the interest of long-term business with the backdrops of stakeholders’ dependence; this development has been instrumental in introducing ethical business conduct as an integral part of international human rights movement. Among others, the seven conventions of the International Labour Organization (ILO); the United Nations Universal Declaration of Human Rights (UDHR) 1948, the ensuing International Covenant for Civil and Political Rights (ICCPR), and the International Covenant for Economic and Social Rights (ICESR), both are in force from 1976. These have given structural legislative support to the development of guidelines for ethical business conduct, especially for multinational corporations. Although the interest in business ethics has increased in the recent years, the commitment shown by the Indian Parliament in the New Companies Bill to social responsibility is not yet very common to other country, even though the term “good corporate citizen” is becoming an integral part of the global trade rhetoric.
An open, extensive, and effective CoE facilitates communication between people and thus promotes democracy. The positive effect of CoE on the other hand will protect the interest of business vis-a-vis society at large.
It is a positive sign that, despite the absence of pressure from external entities or any other groups, this attempt have paved the way for Companies to have ethical codes of conduct. It’s an effort to build the nation with transparent and accountable mechanism. But the real Litmus test for the degree of their ethical commitment is, whether or not they allow an independent, outside specialist or non-governmental organization to monitor their compliance in their production plants and their vendors’ plants for the existing conditions. At the moment neither one of the companies in this study allows it. However, to translate the CoE into reality, the issue is critically important and is therefore worth a proper handholding towards conduct ‘facilitating workshops’ with the cross section of industry across the country. It is my privilege to extend acknowledgments to the respective participating organisations for associating with us in this national endeavour. We are also indebted to the National Human Rights Commission (NHRC) for supporting this initiative.
The report was prepared by the Institute for Corporate Sustainability Management Trust