Glocal Canvas

While reacting to the allegation of the Indian government of the involvement of Pakistani elements in recent terrorist attacks in Mumbai, the President of Pakistan Mr Asif Ali Zardari said that “stateless actors” rather than the Pakistan government might have been involved in these acts. This is an honest admission of the reality – the reality that terrorist organisations (TOs) might exist independent of states and have an identity different from states. Although TOs operate from the territorial boundaries of a state, they are stateless entities in that they do operate at a transnational level without being inhibited by artificial boundaries of states. TOs are stateless also because they generally do not have affinity to states: neither are they registered as a legal entity not do they pay taxes to governments. In addition, even if certain TOs have “state linkages”, such links are not permanent and their actions could not always be controlled by, or driven to suit the national interest of, such states.

Here one issue that we should consider is: how do TOs as non-state actors compare with other non-state actors? As I wrote (in a piece entitled “From 3/12 to 9/11”) more than four years ago, we should juxtapose TOs with MNCs because these two non-state actors represent an increasing threat to the realisation of human rights worldwide. This is so because not only the conventional human rights framework is predominantly state-centric but also because on occasions states itself start acting in connivance with MNCs and/or terrorists to suit their myopic interests.

Of course, there are many differences between TOs and MNCs. Nevertheless, they do share some common characteristics. An understanding of these commonalities between TOs and MNCs might be useful to gain insights into the kinds of regulatory challenges that these two non-state actors pose to both national and international regimes. Consider, for example, the following:

1) Both MNCs and TOs are driven by a dominant, often also sole, motive and they are not generally tuned to balance other considerations with that motive. With a few possible exceptions, MNCs and terrorists are primarily motivated by ‘just profit’ (not just profit) and ‘violence for a cause’ (irrespective of whether the given cause is right, just, moral, legitimate or not), respectively.

2) As mentioned above, both MNCs and TOs hardly feel inhibited by geographical boundaries; they operate at a transnational level and could move from one state to another with ease.

3) Like MNCs, TOs also have a structure and line of command seen between the parent corporation and subsidiaries of a corporate group.

4) Both TOs and MNCs can change their names and appearances in order to bypass the legal process. They could also disappear (including by merger or acquisition) and then take rebirth, if necessary.

5) TOs and MNCs employ latest/innovative technology to their advantage. Various technologies, in fact, enable them to operate globally.

6) Both these non-state actors operate with the active or tacit support of states. In fact, on occasions states might use them to fulfill their foreign policy or national goals.

7) Last but not least, TOs as well as MNCs could leave victims of human rights abuses without an effective remedy because often alleged violators are outside the territory/jurisdiction of the victims’ state.

So, how should we regulate TOs and MNCs? Experience to date has shown that neither states nor state-focal institutions alone can effectively regulate the activities of non-state actors such as TOs and MNCs, for the simple reason that these are stateless entities. Moreover, states do not always respond to instances of violations of human rights by TOs and MNCs in the same way – for instance, it usually matters who were the victims of such violations. Therefore, the sooner the international community realises the limitations of a state-centric regulatory model, the better it would be for the realisation of human rights in the times to come.

Now a days it is quite common to talk about concepts such as "stakeholders" and "corporate social responsibility (CSR)". However, the criticism that these concepts has received historically is often misinformed. For example, in the famous Berle-Dodd debate, Professor Berle suggested that CSR might make the corporate management absolute. As we know, this proved baseless, for the contention was unsound. Similarly uninformed were the arguments of Milton Friedman that corporations would in effect be imposing "tax" on stockholders if they pursued CSR policies, or that CSR was a Marxist/socialist tool to undermine free market economy and capitalism.

The recent Monitor column of Jake van der Kamp in South China Morning Post ("Airport returns just flights of fancy for taxpayers?", 27 June 2008) is a telling example of this continued misinformed critique of stakeholders and/or CSR. By referring to the "Dear Stakeholders" opening address of the Chairman of the Hong Kong Airport Authority in the Annual Report of the Authority, the author suggested as if the Chairman was "responsible to the customers, the emplyees and the suppliers, but not to you [shareholders]". However, stakeholders do include shareholders. As per a seminal definition offered by Freeman, a stakeholders is who "can affect or is affected by the achievements of the organisation's objectives". So, the responsibility to stakeholders does not exclude responsibility to shareholders.

Perhaps, Mr Kamp might not have made such an erroneous assertion had he read carefully the very first paragraph of the chairman's statement, wherein it was mentioned that out of the profit amount of HK$2.3 billion, "HK$2 billion will be returned to our shareholders".

It is also not appropriate to suggest that only shareholders contribute to the success of a company. Let us take the case of Airport Authority itself. Is the Hong Kong airport one of the best merely because of its shareholders (the HKSAR government)? I doubt if this is the case, because saying so greatly discounts the role that other stakeholders such as employees, suppliers, contractors and travellers play in making the airport what it is.

This is not an advice from an employment consultant or a human resources manager, but the message on a banner placed in one of the canteens of a factory in the town of Zhongshan (Guangdong, China). As reported by Justin Jin in a news item published in the South China Morning Post on 30 July 2007, thousands of workers work 18 hours a day to scrub jeans to give them a “vintage” look.

What reasonability do we – as consumers – have towards such workers who produce goods in inhumane conditions? If there is a case for responsibility, what is the extent and ambit of such responsibility? I think that every person has a responsibility (of varying level) to contribute to the project of human rights realisation. It is not merely the business of states and/or corporations to ensure that human rights, say, of workers are not abridged simply because they have lesser bargaining power. If by exercising buying preferences in a particular way, one could make a positive difference, then one should try to do so. Talking a walk on this road would not, however, be very easy or straightforward. For example, boycotting a product produced in inhumane conditions might render many workers in developing unemployed, or there could be cost-related issues. So, there are trade offs to be made, but still consumers – both individually and collectively – have a moral responsibility to factor in human rights and environmental considerations while buying products.

One most important precondition for such consumer activism is a free flow of information, something that would have to strengthened.

Dr Mohamed Haneef, an Indian doctor working in Brisbane, was recently charged under the Australian laws for “recklessly” providing support to a terrorist organisation. The gravemen of the charge is that he left his SIM card with unused credit with his cousins in England who have been charged for smashing a jeep into the Glasgow airport. For details and background facts, one might refer to the Wikipedia entry or The Australian.

After remaining in police custody for almost two weeks without any charge, a magistrate released Haneef on bail because the prosecution could not provide credible evidence of a direct link between Haneef and a terrorist organisation. The case took an interesting twist when hours after his release on bail, the Australian Immigration Minister Kevin Andrews cancelled Haneef’s visa on the ground of failing the “character test” under the Migration Act.

The whole saga raises, at least, two sets of questions. First, are states – in their over-zeal to win the war against terrorism – invoking anti-terrorist laws (some of which are inhumane in nature) somewhat recklessly and for purposes other than the intended ones? More importantly, is this approach going to prove counterproductive in containing terrorism?

Second, was the cancellation of visa by the Minister an instance of colourable exercise of power in that the Minister tried to do something what the government could not do directly, that is, keeping Haneef behind bars? Moreover, does it amount to interference with the judicial process?

My short response to all the above questions is, yes. For a slightly longer response, see my piece posted at On Line Opinion.

One of the key issues concerning the realisation of human rights, in my view, is: could corporations (and other private sector organisations) be made to join hands with states and civil society organs in accomplishing this project? I explored elsewhere this issue with reference to the constitutional provisions in India. It seem that there is a growing realisation that unless corporations take on board the constitutional mandate of human rights protection, the ever-expanding scope of fundamental rights in India would not go far.

One context in which this issue has become more apparent is the affirmative action provisions under the Indian Constitution. For sometime now, discussions are taking place if these affirmative action provisions should be extended, by amending the Constitution and/or by enacting a law, to apply to the private sector. On 24 may 2007, while addressing the annual general meeting of the Confederation of Indian Industry (CII), the Indian Prime Minister Dr Manmohan Singh launched a Ten-Point Social Charter for a more inclusive growth. The Point Three of the Charter deals with the role of private sector vis-à-vis affirmative action: “… industry must be pro-active in offering employment to the less privileged, at all levels of the job ladder. The representation companies give to Scheduled Castes, Scheduled Tribes, other Backward Classes, Minorities and Women, in their workforce and staff must increase.”

CII has also released a Report on Affirmative Action and has formulated a voluntary Code of Conduct to be followed by member companies. The Report outlines several laudable concrete steps that CII seeks to take. However, at the same time the Report puts on record the opposition to “any legislation that would compromise the sanctity of its non-negotiable freedom of choice in employment”. CII is also gathering data in relation to the employment of Scheduled Castes (SCs) and Scheduled Tribes (STs). Many leading companies have already started institutionalising the policy of affirmative action and include this in their annual reports.

Although I expect the road to privatisation of affirmative action in India to be bumpy, it is likely that no roll back would be possible as long as we live in the era of corporate raj.

After operating in China’s Forbidden City – a World Heritage site (and a great tourist site) – for seven years, Starbucks has decided to close its shop rather than doing business under a different brand name. From the very beginning Starbucks had faced protests from local people/authorities/visitors on the ground of “trampling” the Chinese culture. In response, Starbucks tried to be sensitive to these concerns and removed “its eye-catching white-black-and-green logo from the Forbidden City outlet”. However, this did not completely satisfy everyone. Now probably even Starbuck thought that enough is enough; after all, MNCs knows very well “what is in a name”.

MNCs often face the business dilemma similar to one that Starbucks faced in the instant case. More often that not, MNCs have to adjust their business operations in view of local social, economic, cultural or political variables. From the corporate social responsibility (CSR) perspective, the critical issue is: when do such adjustments become legally and/or morally indefensible? In other words, should Starbucks have agreed to operate inside the Forbidden City under a Chinese brand name? What was the social responsibility of Starbucks under the given circumstances? It seems that as the management of the Forbidden City was within its right to lay down rules for operating commercial ventures, Starbucks also has a right to refuse to operate under conditions which might compromise its brand name or identity. Starbucks did not behave in socially irresponsible (or unresponsive) manner by refusing to do business under a different name; in fact, the opposite might be true.

Of course, the situation might be different if Starbucks sells not coffee etc., but is the only company to sell certain life saving drugs within the Forbidden City. Then perhaps an argument could be made that such a company should continue to supply drugs without insisting on its brand name as long as it could use its name in shops outside the Forbidden City.

A recent pronouncement, in India, relating to the validity of a Nikah (a Muslim marriage) solemnised online once again attests to the pervasive power of Internet. As reported by The Times of India, the Darul Uloom, Deoband pronounced that “a marriage solemnised in the bodily absence of a party with the help of the Internet, is acceptable if the proceedings take place in presence of two witnesses.” Maulana Khalid Safiullah Rehmani, the Chairman of Islamic Council of India, explained the rationale behind this ruling as follows: “In such a marriage, Internet is assigned the role of a vakil who is authorised to formally receive Ijaab aur Qubool (offer and acceptance) made by both parties.”

People familiar with the law of contract might see that the reasoning of Maulana sits well with the observation of Thesiger L J in Household Fire Insurance Co. v Grant (1879) 4 Ex.D. 216, wherein he saw “no better mode than that of treating the post office as the agent” of both contracting parties. Since marriage is a contract under Muslim law and Internet is now widely accepted as a medium of entering into contracts, the Internet Nikah pronouncement might look as a logical conclusion. Nevertheless, one should keep in mind how this ruling modifies what is regarded by many as a highly conservative personal law which discriminates against women.

It is clear, however, that this interpretation does not dispense with the requirement of two witnesses which are required to be present for a valid Nikah under the Sunni law. This then raises the question where should these “two” witnesses be present assuming that the bride and groom are based in two different cities (or even continents)? It is worth considering if one witness each at both the locations should satisfy the requirement. This would also probably help in resolving the potential disputes that might arise in online marriages.

Finally, it is worth investigating if this legitimisation of Internet Nikahs is going to work for or against the Muslim women generally.