The following is an excerpt from Michael Posner’s recent book, Conscience Incorporated: Pursue Profits While Protecting Human Rights, reprinted here with permission from NYU Press.
I picked up the phone, and it was Deval Patrick, Coca-Cola’s general counsel, asking if he could fly up from Atlanta to talk. He didn’t say why, but I knew. I was executive director of Human Rights First, an advocacy organization in New York City, and Patrick was in the midst of a drawn-out legal battle that was maybe the most threatening assault on Coke’s reputation in its hundred-year history: the campaign to “Stop Killer Coke.”
Nineteen days before Christmas 1996, at 8:30 a.m., Isidro Segundo Gil had walked through the front gates of a Coca-Cola bottling plant in Carepa, Colombia, and spotted two members of a far-right paramilitary group. For months, Gil, the lead negotiator for the food and beverage workers union Sinaltrainal, had feared that the plant’s owners were using the paramilitary group to intimidate workers and their organizing efforts. Gil approached the men to confirm his suspicions.
Shots were fired, and Gil dropped to the ground, dead, as his coworkers looked on. Not satisfied that their message had been adequately delivered, the vigilantes returned two days later. For the next two months, they threatened any worker who did not agree to resign from the union.
The event sparked demands around the world that Coca-Cola be held accountable. Although political violence was common in Colombia, and such cases rarely prosecuted, Coke’s involvement made this situation different. US college students organized boycotts, and the “Campaign to Stop Killer Coke” was born. This was no mere image problem. CocaCola soon faced numerous federal lawsuits, as US unions joined their overseas counterparts to sue the company under the Alien Tort Claims Act, which held domestic companies liable for actions abroad.
Patrick called me shortly after he was hired by Coke in 2001. The following week, he and two members of his team arrived at my midtown office lugging several litigation bags stuffed with briefs and memos. I’d first met Patrick in Washington when he was running the Civil Rights Division of the Justice Department in the early years of the Clinton administration, but by then, I had long admired his work, strong leadership, and practical approach to the often-contentious civil rights agenda. At the time, I had asked to see him because the US had recently ratified two key human rights treaties, and I wanted to talk about ways to apply them in our country. Despite my agenda’s relatively low priority for policy makers, he immediately offered his help.
Now it was my turn. Patrick immediately launched into his defense, arguing that the protests were grossly unfair. He explained that his company did not own or even operate the bottling plants in Colombia—Coke merely licensed its name and provided its famously secret syrup to local owners. It had no control over what happened there.
When he finished expressing his frustrations, I got my chance to speak. “Put your briefs aside, Deval,” I said. “Whose name is on the bottle?” He listened as I said that in my view, Coke’s problem was not legal; in fact, in all likelihood, the company would prevail in court. The origins of the Alien Tort Claims Act are unclear, but some people have speculated that it was intended to provide a remedy to those who were attacked by pirates on the high seas. Beginning in the early 1980s, though, litigants had used it to target foreign officials who ventured into the US after committing gross human rights violations, such as torture, in their home countries. More recently, activist lawyers had tried to stretch the law’s boundaries to target international corporate conduct, but with little success. The plaintiff’s argument seemed to me a long shot at best.
The key battleground, I told Patrick, was the court of public opinion, and the “Killer Coke” campaign and its attendant boycotts were killing the beverage giant there. “If your name is on the bottle,” I said, with some emphasis, “you own the problem.”
Patrick sighed with resignation. “What would you suggest we do?” he asked.
The Question at Hand
My answer sparked a productive conversation that was another version of the one I’ve had dozens of times, before and since. Companies and facts change, but the central question remains at least as relevant as ever: What do global businesses owe to the faraway workers and partners that make their products?
Some of the strongest brands in the world—Nike, Walmart, Apple, Tesla, Meta, Amazon, Levi Strauss, to name a few—have long had to confront their role in human rights abuses that put their reputations under harsh public scrutiny. This reflects the growing attention paid to the now almost fifty-year trend of multinational corporations profiting enormously from increased access to materials in remote locations and the drastically reduced costs of ever-cheaper sources of labor.
To be sure, companies are not the only ones to have benefited. Tens of millions of people around the world have been lifted out of poverty by globalization and the jobs it has created. Even more enjoy the cheaper clothes, electronics, and other products that are a direct result of our shrinking world.
But a bill is coming due for all of us. Dangerous conditions are more frequently exposed and broadly disseminated, revealing economic exploitation of—and outright violence against—those who make the products. And yet progress against such injustices remains slow. Many of the business leaders I speak with continue to look perplexed when the subject of human rights arises. It’s not what they trained for and not where they expected to have to focus their energies. Their job, they tell me, is to make and sell products and to generate profits. It is the role of governments to protect human rights.
I can speak to this delineation from firsthand experience. I helped craft the official US response to such challenges when I served as assistant secretary of state for democracy, human rights, and labor in the Obama administration, working with Secretary of State Hillary Clinton. I learned then that there are limits to what governments can do, even powerful ones like ours. When US companies operate elsewhere in the world, the local laws they are subject to are often weak or unenforced, and there is no effective international body holding anyone accountable. Instead, more and more, companies are being held to higher moral standards by an increasingly informed public.
Patrick, to his credit, was not the sort to throw up his hands at the challenge facing Coke at the turn of the millennium. He had been an outstanding civil rights lawyer in the Justice Department, and as general counsel at Texaco, he had helped repair the oil giant’s horrendous record on race. (Prior to his hiring, the company had settled a racial discrimination suit for $170 million, the largest-ever such settlement at that time). So he understood that he could not rely on the local bottler’s version of events or its account of its efforts to keep workers safe. “You have to go to Colombia and see what’s going on with your own eyes,” I said, explaining that only after meeting all stakeholders could he distill the truth.
It did not surprise me when he readily accepted my offer to introduce him to rights activists in Colombia, nor that he immediately began to plan a fact-finding mission. And it likewise didn’t surprise me when his bosses pulled the plug on the trip. Not until change was made at the top and in the corporate culture did Coke finally begin to take responsibility for the assassination of Isidro Gil and his coworkers.
Unfortunately, the challenges Patrick faced—not least the resistance of his colleagues to own the problem—remain today. Corporate leaders continue to grapple with their human rights issues in stages. First, they acknowledge the problem—but usually only after an extended period of denial. Next, they set about solving it, although too often that means looking like they are solving it, either by mounting a public-relations campaign or pressuring a less powerful partner to take the heat. Such attempts, of course, yield superficial results, accomplishing corporate goals in the short run but no lasting changes. Real progress comes only with a third, more difficult and more ambitious stage: ownership. Only when businesses take stock of their conduct can they begin to address the issues in a meaningful way. Honestly, few companies still ever get this far, because it requires a serious investment of time, labor, and money—not to mention fundamental changes in the way business is done.
Moving companies and industries toward this third stage is what my work is about, and I approach it wearing two hats: of a human rights advocate and a pro-business adviser. There is a good reason why, in 2013, I established a human rights center inside a business school when others thought it belonged in a law school or public policy program. Yes, I want companies to promote human rights, but I also want them to succeed commercially as they do so.
That said, any meaningful change will require a departure from the well-worn mantras of Milton Friedman, the economist whose short term profit prioritizing has been gospel to generations of investors and executives. This single-minded focus has shaped the modern global economy. (Friedman won a Nobel Prize in 1976.) His emphasis on maximizing shareholder returns has certainly made a lot of investors, companies, and chief executive officers (CEOs) wealthier. But the cost, to both the environment and human beings at the wrong end of lengthy supply chains, has also become strikingly apparent.
There is reason for optimism. A new generation of investors, with more women in its ranks, is demanding that companies do better with respect to environmental and social issues. Studies show that women in particular—and Millennials and Gen Z generally—are more than twice as likely as older white men to factor these things into their investment decision-making. Their views matter because women already control half of individual wealth in the US and younger investors more broadly will inherit more than $30 trillion over the next four decades.
A paradigm shift, then, seems likely. That’s especially so given three trends suggesting that now is the time for companies to lead on human rights not only because it is the right thing to do but because it is in their long-term interest to do so:
1 The biggest companies are wealthier and more powerful than many governments. In the globalized marketplace, economic power has shifted from nations to the private sector. More than half of the richest entities in the world are corporations.2 Revenues of companies like Apple ExxonMobil, and Walmart are higher than the gross domestic products (GDPs) of advanced countries like Sweden, Belgium, and Thailand. Facebook, meanwhile, has more users than the population of China, and thus more influence, in certain respects, than the Chinese government. But as multinational entities leverage cheaper labor pools to great success, often in countries with governments unwilling or unable to protect their own people, most continue to absolve themselves of any duty to care for those workers.
2 People have lost faith in government’s ability to fix problems. I still believe that governments need to play a crucial role in safeguarding the dignity, freedom, and well-being of workers. They can shape societal norms that reinforce ethical corporate practices and hold companies accountable. But confidence in government has declined precipitously in recent years, to an extremely low point, according to the 2023 trust barometer published by the public relations giant Edelman. The analysts write, “Business is now the sole institution seen as competent and ethical. . . [It] is under pressure to step into the void left by government.” The pressure, for example, on companies like Coca-Cola, Delta, and Dell to join the voting rights fight shows that the public expects major companies to step in where governments are falling short.
3 Technology has made us all more aware of human rights abuses. Scenes of girls toiling in unsafe garment factories in Bangladesh and boys descending into makeshift rare-metal mines in the Democratic Republic of the Congo (DRC) have pricked the Western political conscience. The prevalence of smartphones in even the poorest parts of the world—and the growing number of media savvy activists intent on exposing injustices—has left human rights abusers, including those linked, directly or indirectly, to global companies, few places to hide.
And yet, in my experience, only a handful of today’s corporate leaders understand that they need to change their business models to address the challenges of the current moment. Sure, many more companies have created offices of corporate social responsibility (CSR), but too often those offices are little more than window dressing, enhancing the brand’s reputation by making impressive contributions to worthy causes that have little actual impact on how their own business operates. A logo on a building or in the credits of a worthy television series does not represent the kind of ownership of a problem that helps the garment worker in Bangladesh or the cobalt miner in the DRC or the cotton worker in China.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
