Do the Right Thing: Exploring Corporate Social Responsibility with Owen Pell

Welcome to the latest edition of AIPR’s Podcasts in Prevention. Our last interview tackled Early Warning Systems with University of Otago lecturer Dr. Charles Butcher. Today’s podcast features an interview conducted by Samuel Gillespie with Owen Pell, a partner at White and Case LLP in New York City and an AIPR Board Member. Pell’s areas of practice include complex commercial litigation, securities litigation, litigation involving foreign sovereigns and their state-owned entities, and litigation involving issues of public international law. Mr. Pell has also handled important cases in the area of corporate social responsibility, including by representing Citigroup in class actions relating to the bank’s activities in South Africa during the former apartheid regime, and JP Morgan Chase in class actions relating to a predecessor bank’s alleged connections to African slavery in the United States.

For those people who don’t know what corporate social responsibility means, can you just briefly outline the concept and tell me what it means to you?

Corporate social responsibility can mean a lot of things—it’s a spectrum of activities. It can mean everything from a corporation simply giving money to charity and otherwise doing good works, to a corporation attempting to change society for the better in a direct way including the way that may actually relate to its business.

How did you become interested in corporate social responsibility?

I became interested in it because I’ve worked on cases involving corporations that have done business in parts of the world where bad things have happened, and have been sued for being in proximity to those bad things. So corporations that have been accused of not doing enough to stop bad things from happening, like genocide or mass atrocities, or corporations that were accused of aiding or abetting those kinds of activities because they chose to do business in certain countries at certain times.

In the scope of genocide prevention, can you cite any examples of how corporations sponsor efforts to prevent genocide? I know for example you are serving on the board of AIPR, but is there anything that your corporation or other large corporations do in that respect?

Well, I think that the best examples that are out there of companies taking steps to somehow prevent genocide from occurring, or prevent mass atrocities, you would have to look at examples like the Kimberly Process where companies in the diamond business agree to set up a supply chain system that reduced the chances that the diamonds they were buying were diamonds that were mined by child mercenaries who were being forced to work in mines in places like the Congo. So the Kimberly Process is an attempt by companies to not directly or indirectly support people who, in turn, might be committing atrocities. Another example, not necessarily as closely connected to genocide, but still relevant, were the West African Cocoa Accords, where a group of companies that represented 99% of the cocoa buying market—in terms of companies that do everything from food to fragrances to makeup—those companies agreed to set up a system that would make it less likely that they would buy their cocoa from places where there was a high percentage of child labor. On the theory that child labor is bad and that we ought to move countries away from it, but that the way to do that was to stop buying cocoa from those areas.

So it sounds like what you’re saying is that a lot of corporate social responsibility does not have to do with hard capital being strategically invested in parts of the world where non-profits or organizations who impact social good might operate?

It’s interesting that you say that. I think that there are other examples of that which are much closer to what you just said. I think that there have been some prominent examples over the years. There was a famous example of Nestle in India, realizing that they did not have in India enough domestic milk production to make Nestlé’s product in India (chocolate products). They began fostering the development of an Indian dairy industry, literally bringing in cattle, literally teaching the farmers how to do things, giving them capital. And what’s fascinating is that over time, an entire industry has now developed in India that not only can supply Nestle with its needs, but also is actually capable of selling milk in India and outside of India. That was something developed and the impetus of one company.

Another interesting example is with Coca Cola in the last decade has started to invest in water protection in certain countries because they’re realizing that if the forests are chopped down, if land isn’t set aside for water sheds and water shed management, there will not be enough fresh water in certain countries for them to make and bottle Coca Cola products in those countries and they will literally have to ship in fresh water. So what they’ve realized is that they need to engage in some social good because in the end, not only does the society win but they win because there is a natural resource they can use in their business that they are helping to maintain. So those are some examples, but you can find other examples at a good website to check out on the UN Global Compact’s website. On that website you can usually find under each principal in the corollary to the principles, you can usually get to examples of companies making direct investments to try to carry out certain Global Compact principles and there are some really interesting examples there.

That sounds great I plan on checking that out for sure. When it comes to genocide prevention, its not always a measurable statistic; as much as AIPR would love to say “our Lemkin seminar prevented this genocide or kept X amount of refugees from leaving said country,” that’s a very hard thing to take credit for. Whereas Coca Cola, when they preserve the environment or support and reinforce clean water or wherever their interests may be self-serving, they can see the effects. How do you convince corporations to sponsor a cause where they may not be able to see the impact of a cause they are affecting?

I think that we’re not necessarily in the business of convincing companies of this, because I think most companies get it. I think increasingly companies do realize that they have a stake in the societies in which they do business. One of the best examples is Anglo-American the mining company in South Africa who have come out so strongly in terms of AIDS treatment and prevention because, as the CEO said, “If we don’t do this, eventually there will not be enough healthy people to work in the mines.” So we are literally taking these steps to make society better because it’s in our interest to have a pool of workers we can employ. I think companies are on top of this.

I think what AIPR can do, is AIPR is in the business of creating infrastructure. Creating infrastructure within governments with whom business could conceivably over time interact. Creating communication paths between government officials and civil societies, and those are communication paths that eventually companies can plug into as well because that dialogue between civil society and companies is often something that hasn’t been fully developed in a lot of countries and when it does, corporate social responsibility works better.

I think that what’s so interesting about AIPR’s work is that AIPR is taking a very sound sort of public policy approach to this by saying other things that we want to get done in societies require governmental infrastructure and require a vocabulary to measure that governmental infrastructure and its work. There’s no reason why genocide and mass atrocity prevention shouldn’t have an infrastructure and shouldn’t have a vocabulary. That is what AIPR is doing and by teaching government officials that that’s possible they will eventually, I think improve how corporate social responsibility works in those countries.

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