Multinational Companies, Human Rights, and Ethical Theory

Introduction

Human rights issues in the global supply chain are one of the major challenges that multinational companies face in their operations. While these firms try to support human rights through various initiatives, they also violate these rights through other practices that characterize their operations (Arnold, 2010, p. 371). The human rights paradigm has extended to incorporate emerging actors to the point where the debate on these rights is no longer limited to individual states. Multinational companies have been included in the human rights paradigm in the global supply chain because they are considered holders of human rights obligations. Regulations for human rights protection are particularly important to these firms because of their organizational structure, total influence, and mode of operation (Deva, 2004).

One of the major concerns for governments, scholars, and non-governmental organizations is how to influence the human rights behaviors of multinational companies. This concern is mainly fueled by the mixed results from previous initiatives that have been adopted, such as analysis, mobilization, and regulation. In recent years, new efforts have emerged that play a crucial role in channeling such influence into a form capable of wielding greater power over the decision-making processes of multinational companies.

Ethical Theory and the Human Rights Paradigm

According to many business practitioners and business ethicists, multinational companies need to respect and protect human rights. However, while these firms have a responsibility to respect human rights, there is less clarity and agreement regarding what that respect actually involves. This lack of agreement is attributed to problems that originate from both the nature of human rights and the nature of multinational companies. Moreover, human rights codes were developed with governments or states in mind, which makes their extension to these firms problematic. One of the most contested aspects of extending human rights obligations to transnational companies is whether these firms are responsible for only some, or all, of the rights that governments are required to respect.

The need to protect human rights is attributed to the possibility that multinational companies may violate these rights in their daily operations. However, the obligations emanating from individual human rights may not fully account for all the ethical obligations of a multinational company (Bishop, 2012, p. 120). Multinational companies have several ethical obligations with respect to human rights on grounds such as utilitarian and deontological considerations. They also have supererogatory responsibilities from a humanitarian point of view, such as a duty to philanthropy.

Multinational companies have human rights obligations for various reasons, including their impact on the lives of many people across the globe. These firms bear the responsibility to protect human rights because of their size, impact, and control over production processes that affect many people's lives. Additionally, transnational firms have the responsibility of protecting human rights because of the current stage of globalization. The dominance of free-market ideology and deregulation, combined with the competitive forces of global markets, limits governments' ability to ensure that the activities of these companies do not violate people's rights. Therefore, multinational companies need to establish appropriate measures to ensure the protection of human rights in all their activities.

Theoretical Approaches to Human Rights

As noted above, multinational companies have the responsibility of protecting and observing human rights throughout their operations. These firms can pursue this objective through several theoretical approaches. One theoretical ground available to multinational companies is the libertarian ethical theory. This is a non-consequentialist ethical theory in which the rightness or wrongness of an activity is determined by properties intrinsic to the activity itself rather than by its consequences. The libertarian approach emphasizes that people have the liberty to do whatever they wish as long as they respect other people's equivalent freedom. Under this approach, multinational firms may carry out their activities as long as they respect the freedoms of others.

Secondly, multinational companies can adopt a Kantian approach to their human rights obligations in order to protect and observe these rights. This approach is based on the view that an action can be good as long as the principle behind it reflects a genuine responsibility to the moral law (Lewis, n.d.). As a virtue-oriented deontological theory, the Kantian approach offers moral laws that are universally applicable regardless of culture or individual circumstance. It places considerable emphasis on rational thinking about morality as a justification for moral rules. One of the major examples used to illustrate this approach is the logical reasoning employed in mathematics to justify axioms that are held by everyone regardless of their circumstances or the consequences that follow. Therefore, the morality of an action depends on whether it could be universally applied to all rational agents.

Third, multinational firms can adopt a democratic ground for protecting human rights, under which intentions and activities are considered morally relevant in determining right and wrong. The fundamental principle of democratic theory is that public decisions should be made in consultation with those who are likely to enjoy or suffer from them (Franceschet, 2009, p. 51). This approach has been used primarily in political contexts as part of policy-making. The democratic perspective can be applied to human rights protection by multinational companies through analysis of the impact of their operations on affected populations.

Conclusion

Human rights issues in the global supply chain require multinational companies to adopt proper measures to protect and observe these rights. The utilitarian ethical theory is the most useful framework for understanding the role of a multinational company with respect to human rights issues in the global supply chain. The usefulness of this approach is demonstrated by the fact that its benefits are two-fold: it seeks to accomplish the greatest welfare for the greatest number. The approach not only promotes the greater good and happiness of the company but also seeks to ensure that the firm's processes do not harm the rights of the people it affects.

References

Arnold, D. G. (2010). Transnational corporations and the duty to respect basic human rights. Business Ethics Quarterly, 20(3), 371–399.

Bishop, J. D. (2012). The limits of corporate human rights obligations and the rights of for-profit corporations. Business Ethics Quarterly, 22(1), 119–144.

Brenkert, G. G. (n.d.). Marx's ethics of freedom. Marxists. Retrieved May 4, 2013, from http://www.marxists.org/reference/subject/philosophy/works/us/brenkert.htm

Deva, S. (2004). Acting extraterritorially to tame multinational corporations for human rights violations: Who should "bell the act"? Melbourne Journal of International Law, 5. Retrieved May 4, 2013, from http://www.law.unimelb.edu.au/files/dmfile/download1ad31.pdf

Franceschet, A. (2009). The ethics of global governance. Retrieved May 4, 2013, from

Lewis, B. (n.d.). The main ethical theories. Yarra Institute. Retrieved May 4, 2013, from http://www.yarrainstitute.org.au/Portals/0/docs/Publications/Lewis,%20Main%20Ethical%20Theories.pdf