Corporate Social Responsibility at the State Department

Before that I also served as a senior aide in the U.S. Congress for 8 years. While my experience might suggest I’m coming at the issue of corporate social responsibility from a different perspective, the development and commercially-focused issues I have covered lend themselves well to the labor, social, environmental and ethical issues we will be discussing over the course of these next two days.

I don’t have to tell this audience gathered here today how much corporate social responsibility has grown over the last few years. It seems that more and more companies recognize that doing good is good business. Sustainable practices that mitigate long-term risks like environmental degradation, social unrest, and customer boycotts, promote profits.

We recognize and support these activities at the State Department, especially in my part of it, the Bureau of Democracy, Human Rights and Labor. Our role is to advise on and coordinate U.S. policy on human rights, democracy, international labor rights, and religious freedom. The Bureau also administers the Human Rights and Democracy Fund programs. In fiscal year 2005, the Fund administered over $48 million in programs to support democracy and human rights – including worker rights – around the globe.

We have several offices in our Bureau--Multilateral Affairs, Human Rights and Democracy, and International Religious Freedom, and an office of Country Reports and Asylum Affairs, I dare say all of you in this room are familiar with the work of our bureau. We produce the State Department’s most discussed publication, the annual Country Reports on Human Rights Practices. As some of you may already have noted, the rollout for that report occurred yesterday.

Barry Lowenkron, the Assistant Secretary who heads our bureau, and not insignificantly, my boss, participated in the press conference along with Secretary Rice and Under Secretary for Democracy and Global Affairs Paula Dobriansky. Paula, not insignificantly, is Barry’s boss. Both Paula and Barry mentioned prominently our recent and ongoing initiative concerning Internet freedom in China, Vietnam and other places where countries interfere with free use of the Internet. Barry drew on his recent trip to China and Vietnam, where in both countries he engaged the host government officials concerning use of the Internet and a number of other human rights issues.

Rounding out the list of our offices is the Office of International Labor Affairs that I supervise directly. The Labor office participates both in democracy building and advancing worker rights by promoting the growth of free, independent and democratic unions abroad and by generating respect for internationally recognized worker rights globally, including by supporting various forms of corporate social responsibility.

For the past several years, our Bureau has worked with other Bureaus in the State Department on corporate social responsibility. Let me say at the outset that our definition of corporate responsibility is broad, covering support for human and worker rights, but also promoting the rule of law, transparency, good governance, fighting corruption, responsible environmental practices, community development, and public-private partnerships.

At State we have taken a three-pronged approach to corporate social responsibility that facilitates dialogue among stakeholders, recognizes achievements by corporations, and provides funding for programs. This comprehensive approach allows us to work with governments, the private sector, civil society and NGOs domestically and abroad – multilaterally and bilaterally.

I should note that my bureau’s support for corporate social responsibility is not purely rhetorical. Many of the organizations and companies represented in this room have partnered with us on projects. Our anti-sweatshop initiative has contributed nearly 18 million dollars to various types of projects in this area.

Through this program we have funded multi-stakeholder approaches to improving labor conditions for the past six years. We have encouraged cooperation between a variety of actors – the private sector, NGOs, unions, government, factory managers and workers – to develop innovative labor rights improvement programs within manufacturing supply chains. In other words, we have provided seed money to NGOs to try new approaches.

So, we have worked with the Fair Labor Association, with the International Labor Rights Fund, the International Labor Organization, with Factories Clearinghouse and others to improve conditions factories in Central America, to link orders and production to factory conditions and workers’ rights in Cambodia, and to defend workers rights in various factories in China. I should mention that we have also worked with brands, such as the Gap, Levis, Disney, Coca Cola and many others.

Our Labor Office also participates in the negotiation of free trade agreements between the U.S. and its trading partners. As some of you may know, each of these free trade agreements includes a labor chapter. The US and its partners undertake to enforce their respective labor laws and to take steps to ensure that they protect internationally recognized worker rights, such as the right to free association and collective bargaining. Countries also promise to work to eliminate forced labor and the worst forms of child labor, and to follow certain minimum standards concerning wages, working hours and safety and health in the work place. Once an agreement is signed and ratified, the US often gives its partners assistance to help them meet the commitments they have undertaken in these trade agreements.

A good recent example is the Central American Free Trade Agreement undertaken between the United States and Costa Rica, the Dominican Republic, El Salvador, Honduras, Guatemala, and Nicaragua. Working with other parts of the US government, we will be trying to strengthen compliance with international labor standards in these countries. We will be developing proposals aimed at educating all the stakeholders concerning their rights and responsibilities. The International Labor Organization will certainly be involved and as we will be competing some parts of this effort some of you in this room may be involved as well. We are still in the formulation stage on this, but we will endeavour to stay in touch with those interested as this evolves.

As I mentioned earlier, another important issue is freedom and the Internet. You may have seen the news recently about Internet companies and censorship practices in China. Indeed, the Internet is a potent force for freedom around the world, but challenges to its independence by repressive regimes threaten its transformational power. In order to ensure a robust U.S. foreign policy response to these challenges, Secretary of State Condoleezza Rice established the Global Internet Freedom Task Force (GIFT) on February 14, 2006. Under Secretary for Democracy and Global Affairs Paula Dobriansky, who DRL reports to, and Under Secretary for Economic, Business, and Agricultural Affairs Josette Sheeran Shiner will jointly chair the Task Force. State will follow a multi-layered approach as the issues are complicated and the challenges considerable. Much of the recent focus has been on China, where we have seen widespread censorship, intimidation of online writers, and attempts to suppress the free flow of information. Unfortunately, numerous other countries also engage in similar practices, and the work of the task force will therefore continue to be global in focus. DRL is playing an active role in the Task Force, and is organizing a meeting of concerned NGOs to discuss the issues involved tomorrow. By constructing a dialogue with the companies, NGOs, concerned academics and others, we hope to craft an approach that all sides can endorse, and that will protect the equities of our businesses while at the same time preserving essential freedoms and limiting the types of government abuses we have seen in China and elsewhere.

For the past several years, we have been engaged in the Voluntary Principles on Security and Human Rights – a collaborative initiative, begun by the U.S. and U.K., and later joined by the Netherlands and Norway, to address security and human rights issues as they arise in the extractive sector. Companies such as Shell, ChevronTexaco, Amarada Hess, Exxon Mobil, BP, Shell, Occidental, ConocoPhillips and others, working with NGOs such as Business for Social Responsibility, the International Business Leaders Forum, Amnesty International, Human Rights Watch, and Human Rights First, negotiated and adopted the Voluntary Principles in 2001 and have formed the basis for ongoing dialogue since then.

As another example of State Department engagement in promoting CSR, since 1999 the Secretary of State has recognized American firms for exemplary business practices, innovation and good corporate citizenship in their overseas operations, through the Secretary of State’s Award for Corporate Excellence program. This award formally acknowledges the important role played by U.S. businesses in reinforcing our commitment to good governance and democratic principles, human rights, raising living standards, worker rights, environmental protection and ethical business practices. These awards have in recent years gone to companies such as Caterpillar and Motorola. Caterpillar worked closely with the local community to minimize the environmental impact of its plants, and then helped to educate its work force, sponsoring community-based adult education classes. Motorola Brazil won the award by actively helping to develop community-based policing to reduce violence in the cities and town that housed company operations.

The Voluntary Principles, the Award for Corporate Excellence and the PESP should serve as a model for the kind of collaborative effort that governments, NGOs and private industry can successfully undertake, to effectively advance their goals. The State Department is open to new, innovative ways that together we can work in partnership to promote our shared objectives: increasing respect for worker rights and contributing to a secure, stable investment climate for business. We at the Department of State welcome your feedback on how we might make our efforts to promote corporate social responsibility more effective, and I encourage you to contact me or my staff with your suggestions.

It’s been a pleasure to be here with you today and I wish you success over the course of the next two days at this Forum. We share a common goal – improving the lives of workers and maintaining productivity and competitiveness and helping to shape environments in countries across the globe that foster freedom – for it is freedom that unleashes the creative energy of men and women and propels societies toward the success that sustains growth and undergirds stability. To do so, we need to work together.

Thank you again.