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Speech by the Rt Hon Douglas Alexander, Secretary of State for E-Commerce and Competitiveness

Article by Rt Hon Douglas Alexander MP

September 15, 2006

Thank you Mark for the opportunity to speak to you today. Let me start by paying tribute to the Foreign Policy Centre for organising today’s event.

It is good to be amongst friends old and new.

Now of course the context in which we as a party meet here in Brighton was fundamentally altered by the events of September 11th in New York.

And while that day changed a great deal, it reinforced in my mind, I have to say, that the world is smaller that it has ever been It’s 6 billion citizens in many senses are closer to each other that ever before in history. Of course we were aware of this when many of us sought to make contact with family or friends in New York, but beyond that, each of us is increasingly connected to people we will never meet from places we will never visit. Many of our clothes and shoes will have been made by people thousands of miles away. The fuel in our cars, the microprocessors in our computers, the coffee in our cup. So many of the products we buy in the High Street have journeyed half way around the world. Yet at the very point in our history at which books like Thomas Friedman’s ‘The Lexus’ and ‘The Olive Tree’ seek to celebrate this process of globalisation, it’s legitimacy is increasingly questioned.

Remember back to Gothenburg or the G8 Summit in Genoa. The plan for Africa was lost in media coverage of the protest. A city was devastated, a protestor died and hundreds of Police Officers and protesters injured. Yet as well as the violent protest that caught the headlines, there were many more people there protesting, united in their hostility to globalisation.

Articulating these concerns, Kofi Anan has asked the question that I believe informs today’s discussion “How can we ensure that globalisation becomes a positive force for all the world’s people instead of leaving billions of them behind in squalor?”

I have no doubt that that question challenges not only companies but government as well.

We must deliver an international rules based framework for fare trade, which provides poor countries with a pathway out of poverty. But there are also big challenges to business. It is not acceptable for a company to make highly priced clothes for highly paid consumers in the developed world by ruining the health of women and children in the sweatshops of the developing work.

It is not acceptable for a company to make beautiful furniture for the homes of rich families in the west but leave a devastated forest landscape in Brazil.

Businesses have come to understand the very considerable corporate risk involved in such actions.

Shell encountered enormous public concern over its activities in Nigeria regarding the Ogoni people and the death of Ken Sarawiaa as well as over the Brent Spar. Nike and Gap both suffered as a direct result of conditions that were exposed in the factories run by some of their sub contractors.

And the actions of such multinationals are important not only for their own bottom line, but the world in which we live. Of the 100 largest economies in the world today, 51 are corporations. The top two hundred corporations have sales equivalent to one quarter of the world’s total economic activity.

And while few will deny the challenge of building a common view as to how corporations can make a positive contribution at local, national and international level, the debate tends to bring out what Simon Zadek’s book calls “Evangelical Optimism” or “Narrow Cynicism”.

To try and find a way through such divergent views, we need first to be clear as what we mean by corporate citizenship. While there is no single definition, I believe a company pursuing this approach does three things:
– It recognises that its activities have a wider impact on the society in which it operates
– In response, it actively manages the economic, social, environmental and human rights impact of its activities across the world.
– And it seeks to achieve these benefits by working closely with other groups and organisations.

In turn this approach to working can bring clear benefits to the businesses concerned:
– by reducing risk
– by enhancing brand value
– by opening doors and creating good will
– and by improving its staff efficiency and morale

This approach is underpinned by various international conventions and codes, some of these – such as the UN’s Universal Declaration on Human Rights, are of general relevance to business activity.

Others, such as the OECD’s guidelines on multinational enterprises – are more specific and are important in setting standards against which, companies operating abroad, can assess their performance.

Here a range of departments, from the Foreign and Commonwealth Office to the Department for International Development, my own Department, the DTI, and the Department for Work and Pensions and DEFRA all make a contribution to this discussion.

Of course there will ultimately be limits to how much we can expect from corporate citizenship in addressing issues such as enduring inequalities in health, education, and income. Yet those limitations should not encourage us to turn away from the agenda of corporate citizenship. I believe it should also inspire us to ensure that alongside the choices exercised by private enterprises we also make public choices through our government about the kind of market, society and world in which we wish to live.

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