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CR Standards in a post-Brexit World

We always assume that the brave new world must be based on global citizenship and plurality. The way forward is simple and clear – our common humanity and goals will guide us. Instead, we have just been assaulted by Brexit.

What does this mean for corporate citizenship across borders? The choices made by the community and the political decisions of today infiltrate all aspects of our lives. This is where the broader, divisive political map dives straight into a very personal landscape. The interdependence of public authority and "private" corporate activity is a case in point.

During the Iraq war, private companies were engaged in a range of activities from training, logistic support procurement, delivering equipment and services to undertaking some very "government-like" activities including advice on organisational or operational issues and intelligence-gathering. Not only were there over 20,000 military contractors in Iraq, but the Abu Ghraib prison scandal revealed that even sensitive tasks such as military interrogations were privatised. Moreover, according to a military report, over one-third of the interrogators at Abu Ghraib lacked formal military training as interrogators. As one of these interrogators revealed, "cooks and truck drivers" were hired because the company providing interrogation services was "under so much pressure to fill slots quickly". It is not surprising then that many reported incidents of abuse at Abu Ghraib were tied to these contractors.

Examples of contracting-out of government activities is not a new phenomenon. In the 1930s, during the New Deal programme, US President Franklin D. Roosevelt described many such programmes as "a corporation clothed with the power of government but possessed of the flexibility and initiative of private enterprises". Remember that the British East India Company was in essence a joint-stock company that operated with sovereign-like powers during its existence from 1600 to 1858. It often minted its own currency, maintained its own army and exercised legal jurisdiction within the regions where it did business. As the corporation is seen as a private institution, it provides a kind of immunity as to how it is made accountable. What aggravates this situation is the increased infiltration of corporate power into areas traditionally considered "public", without the relevant accountability mechanisms.

The message from Brexit is that we do not really need plural sites of authority. The nation state is big and self-sustaining. Whether the referendum marks the reinforcement of the nation state is as much the question as the notion of rule of law. Law presupposes the centrality of the state in the activity of governing and is thus dependent on the demarcation between the governing and the governed. Post-Brexit, the notion of rule of law can be said to be more focused on the political foundations of the state and not wider governance networks. Co-incident with the rise of privatisation and contracting out is a notable trend towards new blends of public and private power. As demands on the regulatory machinery become greater with the participation of non-state actors – for example, supra-national authorities like UN agencies, NGOs and companies – the capacity of the state to respond to these demands have decreased over the years. How Brexit impacts this wide understanding, if at all, is yet to be seen.

Governance today can no longer be the sole purview of the state – it is a network of authorities and actors – companies, states, NGOs and so on can be seen as working towards a common and shared understanding of vision and values.
In the area of CR (corporate responsibility), there are global codes and standards that continue to guide us – the Global Reporting Initiative, the Global Compact, the Sustainable Development Goals are examples of reporting frameworks and aspirational codes. Such standards almost always transcend recognised political boundaries and demand for acceptance on the basis of common usage and market practice.

The story of CR is an evolving one. At heart, CR involves not so much reconceptualising the corporation as recognising its changing form and purpose. The corporate institution needs to be seen as being part of the community in which it operates. Through CR standard setting, a common rule of conduct becomes the norm. The interesting aspect is that such standards often do not emanate directly from the state. The Roundtable on Sustainable Palm Oil, Marine Stewardship Council, Forest Stewardship Council are examples of standards of guidance that are increasingly accepted with little or no state backing. The trend will continue and impact our understanding of the public-private interdependence.

 -first published in The Sun Daily and edited for this site-

Jay DesanComment