We live in a globally integrated economy where national governments are often unwilling or unable to control corporations. How then can governments, trade unions or environmental groups protect people and environments from exploitation or abuse? What mechanisms might prevent the proverbial “race to the bottom”?
Strong institutional mechanisms for restricting corporate power rarely cross national borders. So activists working on global issues have increasingly turned to “shaming movements” – broad public campaigns that seek to punish unethical corporations by urging people to reject tainted products or profits.
Shaming campaigns generally take the form of consumer boycotts. Individual consumers are asked to avoid specific products or brands. Divestment campaigns, which call on individuals and institutions to sell or dump their shares in a particular company or industry, are another method.
Shaming movements have a long history. In the late 18th century, British abolitionists refused to drink tea sweetened with sugar grown on slave plantations. During India’s independence struggle in the 1930s, Mohandas Gandhi urged his countrymen to boycott commercially-produced salt rather than pay British taxes.
Half a decade later activists boycotted Nestle chocolate. They were protesting the company’s reckless promotion of infant formula to the world’s poorest women. And the anti-apartheid movement of the 1980s showed that divestment campaigns could focus global attention on international issues, pushing powerful companies and even governments to change their behaviour.
The rise of globalisation, coupled with increased corporate power, has seen ever more calls for consumer boycotts and divestment campaigns. But do they work? The answer is neither a simple yes nor an outright no.
Consumer boycotts and divestment campaigns have certainly been successful in attracting attention to global issues. In some cases they have forced profit-seeking companies to adopt new norms. But the challenge for activists today is what to do once the shaming has succeeded. Will companies actually adhere to these new norms, or will they simply return to business as usual?
Fickle consumers and voluntary agreements
Over the past 30 years most global brands have shifted to global supply chains. This involves outsourcing production to different suppliers around the world. There have been repeated scandals about working conditions and environmental degradation among those suppliers – scandals often highlighted by transnational “shaming campaigns”.
The threat of “shaming” has prompted many brands to voluntarily adopt corporate codes of conduct, promising to respect national labour laws and basic safety codes. Global brands began to hire factory monitors to assess working conditions at supplier factories and certify that goods are ethically produced.
But do these voluntary corporate monitoring schemes really change the treatment of workers or the environment? Increasingly, the answer appears to be “no”. Even corporations which boast about a strong commitment to social responsibility can easily overlook suppliers’ violations. This sometimes happens with the complicity of factory monitors.
When a scandal occurs, the threat of a consumer boycott may prompt global brands to act. But once the world’s eyes turn away, the commitment to ethical production tends to fade.
Bangladesh’s 2013 Rana Plaza collapse, which killed over 1000 workers, is a tragic reminder. Despite clear evidence that “codes of conduct” and even national building codes were being violated, brands continued to rely on suppliers who regularly endangered their workers. The disaster and accompanying scandal prompted loud promises from companies around the world. Consumers were assured that Bangladeshi factory conditions would be transformed.
But many of those post-disaster pledges remain unfulfilled. Workers in Bangladesh’s garment industry remain vulnerable and unprotected.
This raises real questions about voluntary monitoring schemes, prompting many activists to explore new mechanisms that might subject multinational brands to legal controls or regulatory mechanisms.
Divestment: challenging global rules
Successful divestment campaigns have a different dynamic from consumer boycotts. Instead of urging individual consumers not to buy particular brands or products, these campaigns mobilise local communities to put pressure on institutional investors.
Universities, municipalities or pension funds are urged to reject profits from specific locations linked to amoral activities, or from controversial industries such as tobacco, fossil fuels or private prison companies.
Divestment campaigns make collective, institutional demands. In doing so, they prompt community discussions about whether specific business practices – and profiting from them – can be ever be considered acceptable. They mobilise global support for new norms, reshaping collective understandings.
The anti-apartheid divestment campaign offered a remarkably successful example. Students, church groups and trade unions called on local institutions to sell any shares tied to apartheid-linked companies.
Communities around the world were forced to debate the morality of profiting from investments that involved businesses operating under apartheid, accepting the system’s legalised racism.
Corporate boards spent hours debating the moral and financial value of their South African ties. Corporate directors faced questions about apartheid from their children over the dinner table. As public pressure mounted, banks and multinational companies cut once-profitable ties, and pushed national governments to impose mild sanctions on South Africa. And in South Africa itself, business leaders who feared international isolation began to support a transition to democracy.
The power of divestment campaigns is that they stigmatise both immoral behaviours and those who would profit from them. It’s a strategy that often infuriates business leaders, as it can push policymakers to rewrite the rules of ordinary capitalism.
The anti-apartheid campaign, as well as the pro-Palestinian Boycott Divestment and Sanctions (BDS) movement and today’s surprisingly effective fossil fuel divestment movement show the power of this approach.
Shaming is only the first step
To be truly successful, “shaming movements” must move beyond mobilising public opinion to reach a point where national governments or international agencies are forced to adopt and enforce new norms, both within national boundaries and beyond.
This means that transnational activists must ensure that new mechanisms are designed to protect communities and environments.
Shaming may be a first step in challenging global corporate practices, but it is only a first step.
Increasingly, we need to think harder about what comes next. How do we create global institutions to protect all of us from what the great political economist Karl Polanyi might have called the ravages of “savage capitalism”? How do we prevent the drive for private profit from destroying the communities and the environment on which we all rely?