 Public Scrutiny and International Organizations: Global Corporate Regulation Adam Smith, in his economic treatise The Wealth of Nations, discusses the advantages to a society driven by self-interested individuals. As public scrutiny of corporate responsibility, following scandals such as Enron, increases, then it becomes in the best interests of corporations to project an image of responsibility. Image attracts consumers and hence profits. And profit, according to Milton Friedman, is the “fundamental responsibility of a corporation” . In addition to the public check on large international corporations, organizations, such as the United Nations, have contributed to a list of standards seeking to bring exposure to and to improve global corporate responsibility. Although few international laws exist, corporations have begun to take human rights, employment and the environment under their wing. The Coalition for Environmentally Responsible Economies (CERES) is one of the organizations that have created a set of standards. Companies that support CERES’s standards “formalize their dedication to environmental awareness and accountability” . Some of the organization’s principles include “sustainable use of natural resources, reduction and disposal of wastes, and energy conservation”. The installation of waste treatment facilities and more efficient power sources are among the steps taken by corporations to meet these standards. Organizations such as CERES bring attention to the importance of environmental responsibility and help prevent incidents such as the Love Canal (see poor examples). The United Nations Global Compact is another organization that seeks to highlight the importance of global corporate responsibility. The Global Compact deals not only with the environment, but also with the preservation of human rights and the prevention of labor abuses. With over seven hundred member companies from nearly fifty countries, the Global Compact has become one of the more credible sources of standards for global corporate responsibility. It began in July of 2000 as a project proposed by UN Secretary-General Kofi Annan to “advance responsible corporate citizenship so that business can be part of the solution to the challenges of globalization” . The Nine Principles are the integral part of the Global Compact. They include, among others, the standards that “Businesses should support and respect the protection of internationally proclaimed human rights within their sphere of influence…Businesses should uphold the elimination of all forms of forced and compulsory labor” and “Businesses should undertake initiatives to promote greater environmental responsibility” . The standards laid out in the Nine Principles cover human rights, labor standards and the environment. Organizations, such as the United Nations, contribute towards the improvement of global corporate responsibility, but lack the means by which to enforce their principles. Although national restrictions exist in many countries, including the United States, none of these laws have a global impact. In the absence of widespread international laws regulating corporate actions, it becomes the responsibility of the public to hold the corporations accountable. With their image in mind, under the scrutiny of the public eye, corporations will tend to watch their actions overseas. Whereas at the turn of the century poor employment practices, such as those executed by the United Fruit Company in South America, slipped the public’s attention, today similar abuses would not go unnoticed. Public scrutiny, with the addition of the Nine Principles and similar standards, takes the place of laws in regulating the actions of global corporations.
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