WEF on East Asia: Tackling ‘equitable progress’ in times of great inequality

Bobbie Sta. Maria

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WEF on East Asia: Tackling ‘equitable progress’ in times of great inequality
This week's WEF should acknowledge the premise of widespread abuses and extreme inequality, as well as the role of business in addressing them

This week, the business and political elite gathered in Makati to discuss “leveraging growth for equitable progress” under the banner of the World Economic Forum (WEF) on East Asia. That is a tough task. With almost half of the world’s wealth now owned by just one percent of the population, it’s hard to imagine how the uninvited majority – the underpaid, landless, struggling 99% — could trust the one percent to guard their share of “equitable progress” in this discussion.

WEF itself recognizes the world’s extreme inequality. In its “Outlook on the Global Agenda 2014,” it cites widening income disparities as the second top trend facing the world in 2014.

In our work tracking the human rights impacts of companies worldwide, my colleagues and I at Business & Human Rights Resource Centre see every day the ways by which this great wealth is consolidated by a few.

All over Southeast Asia, for example, there is massive land confiscation to give way to agribusiness, mining, hydropower and even recreational projects, and there are little signs that the revenues from these projects are improving the lives of those most affected by them. Competitiveness is driven by low wages and poor and dangerous working conditions, especially in the manufacturing sector, and it takes large-scale tragedies to get companies to move towards the other direction of improved wages and working conditions.

The way that companies’ bottom lines are thriving at the expense of workers and communities makes poverty and inequality seem all the more insurmountable – such that these days it is not just skill and hard work that can pull people out of poverty, but also the will and ability to challenge exploitation.

Every day, we see examples of human rights abuses and disregard of workers and local communities that contribute to greater inequality. Last week in Cambodia, hundreds of gas station workers went on strike calling for an increase in wages, because according to them the current level is “impossible to live on.” Just a week prior, the parent company reported first quarter net earnings of $4.5 billion.

Researchers at the Center for International Forestry Research have found that in Indonesia, the increased economic output in the oil palm sector is not necessarily stimulating growth in local communities. According to their calculations, the lack of needed experience in the oil palm sector, along with complex land conflicts, make it unlikely for local villagers to truly benefit from the growing industry.

In South Korea, one of the biggest smartphone makers in the world with reported annual profits exceeding $20 billion announced after a long-running dispute that it will compensate chip factory workers who complained of developing cancer while working for the firm – with the CEO remarking that they should have settled the issue earlier.

In the Philippines, where infrastructure projects and big-ticket investments are being showcased as a success story in the WEF, there is continued failure to address workers’ demands of better wages; and union leaders continue to be threatened and harassed for their work of trying to meaningfully negotiate with employers and seeking just conditions for employees.

Impact on social stability, security

Moral arguments aside, it’s hard to envision a healthy business environment in the long term in a world with widespread abuses and extreme inequality. As cited in the WEF Outlook on the Global Agenda 2014, widening wealth disparity is “impacting social stability within countries and threatening security on a global scale.” Paying attention to the impacts that business is making on communities and society in general is not only a good thing to do, it may also make good business sense.

Recent research by the Harvard Kennedy School, University of Queensland and Shift on the extractive sector pointed to the need to identify and analyze the costs of company-community conflict, especially because of the possibility that it may generate the same effects as those caused by technical problems, regulatory disputes or safety breakdowns.

In other words, companies may be losing significant amounts due to community conflicts, but this matter is not given equivalent attention or resources.

During the WEF in Davos last January, a group of business leaders that call themselves the B Team reiterated the business case for advancing the wider interests of society and the environment, emphasizing that broadening the business agenda to include these things could help secure the status of business in the long term. The B Team challenged business people to make a bigger stand for human rights and move towards less inequality.

Playing by the rules

More and more, leaders and opinion makers are saying that business just couldn’t be the instigator of abuses anymore, nor should it just be watching at the sidelines. These points should be clearly made in this year’s WEF on East Asia. 

Exactly how business could use its power and influence to end abuses and extreme inequality should no longer be a puzzle as many groups have advanced clear and logical recommendations on how to go about this.

At January’s WEF the B Team recommended that businesses, at minimum, implement the UN Guiding Principles on Business and Human Rights, not only in their core operations, but across their supply chains: the Principles were unanimously endorsed by all the governments on the UN Human Rights Council and provide clear guidance to companies on how to respect human rights.  It added that “decent working conditions, fair wages and stable communities could quickly become the norm, if encouraged by ethical purchasing decisions.”

And Oxfam, for example, called on those gathered at the January WEF to pledge to: “Support progressive taxation and not to dodge their own taxes; refrain from using their wealth to seek political favors that undermine the democratic will of their fellow citizens; make public  all the investments in companies and trusts for which they are the ultimate beneficial owners; challenge governments to use tax revenue to provide universal healthcare, education and social protection for citizens; demand a living wage in all companies they own or control; and challenge other members of the economic elite to join them in these pledges.” 

None of these steps is about pure benevolence and “going out of one’s way to help.” Most of these are about playing by the rules, not rigging the rules to one’s favor, and paying one’s dues – dues which include not only taxes but also the social and environmental costs of doing business.

This week’s WEF discussion on “leveraging growth for equitable progress” should acknowledge the premise of widespread abuses and extreme inequality, as well as the role of business in addressing them as identified by civil society, experts and business people themselves. Sweeping these topics under the rug while applauding each other for conventional corporate social responsibility  and sustainability “successes” would not only be a disappointment, but would also show that alarm signals and near-desperate pleas made over the years are still mostly falling on deaf ears. – Rappler.com

Bobbie Sta. Maria is the Southeast Asia Researcher & Representative of Business & Human Rights Resource Centre, a non-profit organization drawing attention to the human rights impacts of over 5,100 companies, operating in over 180 countries.

For live updates on the World Economic Forum on East Asia 2014, visit our live blog here.

For everything you need to know about WEF on East Asia 2014, visit Rappler’s microsite. 

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