Government Irresponsibility: BC's Newest Export

April 7, 2002

By Michael Jessen

If British Columbia's provincial government was a company registered on the nation's stock exchange, it would be out of business and filing for bankruptcy.

Socially responsible investors would long since have abandoned Gordon Campbell's Liberal entourage as a rag-tag group of 77 bumbling incompetents whose reputation is shot. After all, reputation is everything in the business world. Nike is still struggling to shake off charges from the mid-90s that its products are made in sweatshops. Brand image is something companies work hard to protect.

Not so the current BC government. They've broken election promises, torn up contracts, disregarded the rights of their workers, put some inland ferry users on a curfew, and generally given up on governing for the sake of the almighty dollar. This government even tried to take away bus passes from senior citizens and audio books from the blind, but intense outcries forced them to withdraw these restructuring plans.

What is truly ironic is the Liberals really believe they are acting more business-like through their pronouncements of Black Thursday and the February 19th budget. And get this, they even want to partner with the private sector to provide public services. Any company subscribing to the more a dozen corporate codes of conduct (see www.goodmoney.com/directry_codes.htm) would quickly realize the BC government is about as trustworthy as that of Robert Mugabe of Zimbabwe.

Gordon Campbell and his cronies obviously haven't been reading the latest information on corporate social responsibility that is changing the way companies do business. Corporate performance on social and ethical, as well as financial, accounts cannot be hidden, and demands for transparency, accountability and public reporting are steadily increasing.

Environics International (www.environicsinternational.com) is a Canadian-based global public and stakeholder opinion research consultancy with particular expertise in corporate social responsibility, globalization, the environment, sustainable development and food issues. The company's 2002 Corporate Social Responsibility Monitor found a company's demonstrated responsibility to the broader society, its labour practices and business ethics, and environmental impact are having a dominating influence on corporate reputation in 11 of the 20 countries surveyed, particularly in the Americas and Europe. Environics' polling also found a majority of people in all countries surveyed, especially in North America and Great Britain, continue to think large companies should do more than make a profit, pay taxes, provide jobs and obey all laws.

While grassroots, anti-corporate protestors disrupt the meetings of multinational corporations, world leaders, and major international institutions, forward-thinking CEO's are devising policies and practices so their operational responsibilities are in sync with society's values and norms. As globalization increases, the demand for corporate social responsibility escalates and the impacts are being felt. In early April 2002, the Global Reporting Initiative (www.globalreporting.org) inaugurated guidelines to harmonize the way businesses report their impact on society and the environment. Gordon Campbell's "rethinking of government" program has chosen to ignore its impacts.

Churches, labour groups and social investment funds that have stock portfolios worth billions of dollars in multinational companies are flexing their muscle at shareholder meetings, forcing companies to change their business practices. Calvert Asset Management Company (www.calvert.com) recently filed 25 shareholder resolutions on a range of issues including global labour practices such as child and forced labour, bias against employees based on sexual orientation, recycling and environmental design in the computer industry, equal employment disclosure, board diversity, environmental compliance, ethical advertising, independence of the board and indigenous peoples' rights.

The Interfaith Center on Corporate Responsibility (www.iccr.org) this year sponsored 144 shareholder resolutions on social and environmental issues at 99 companies. In Canada, the Taskforce on the Churches and Corporate Responsibility (www.web.net/~tccr/), an ecumenical coalition of the major churches in Canada, may soon have to turn its attention to the uncaring actions of governments like BC's. Most BC churches have already told their members to either spoil their ballots or vote no in the First Nations treaty referendum.

Environmental groups are also working with the corporate sector to improve business practices. The Center for Environmental Leadership in Business (www.celb.org) is a unique initiative between Conservation International and the Ford Motor Company.

Organizations like Social Accountability International (www.cepaa.org) are improving workplaces and communities world-wide through standards like the SA8000 Humane Workplace Standard. Just three years after the first certificate was issued, there are now 118 facilities employing more than 70,000 workers that have passed independent SA8000 audits.

If you think lay-offs are normal corporate practice, check out Fortune's latest list of the 100 Best Companies to Work For at www.fortune.com/lists/bestcompanies/. The top spot on the list went to Edward Jones, the stockbroker that has more than 40 branches in BC. Described as running on small-town values, Edward Jones (www.edwardjones.com) has avoided lay-offs in a difficult year, and even gave bonuses early to help traders hurt by the trading decline after 9/11. Edward Jones was not alone. Four-fifths of the companies on Fortune's list avoided lay-offs during the previous year, with 47 out of 100 reporting that they have an official policy barring lay-offs.

In British Columbia, Gordon Campbell's Liberals announced plans January 17th to reduce the civil service -- already the second smallest in Canada measured as the number of employees per capita -- by 11,700 over the next three years. While providing counsellors to laid-off employees, the provincial government wouldn't match the efforts of JDS Uniphase, given wide publicity on the Vancouver Sun business pages two days later. The high tech firm was faced with laying off 188 staff from the closure of its Victoria manufacturing plant. In an effort to help staff stay in the Victoria area or remain within the province, the company compiled a 112-page employee-resource directory that it sent to more than 400 firms listing the 188 employees and detailing their work experience and education and their supervisor's summary.

As businesses are asking themselves what is the proper role of commerce in the world today, BC's government is opting out of services it has traditionally provided to its citizens and blaming budgetary constraints. Small tax cuts in BC are more than eaten up by new increases in medicare premiums, gas taxes, transit fares, and other new fees. Staff cuts to Water, Land and Air Protection will mean less environmental regulation. Single persons on welfare will have their monthly cheques cut by $50 and recipients will no longer be allowed to keep up to $100 earned by working. As expenditures are slashed, hospitals, schools, and legal aid offices are being closed. Who would have thought the illicit actions of Enron could be eclipsed by BC's government as it sheds services in a province-wide going out of business sale.

A new book from the United Nations Environment Programme (www.uneptie.org), World Business Council for Sustainable Development (www.wbcsd.ch) and the World Resources Institute (www.wri.org) warns that businesses wishing to survive and thrive in a global economy will have to respond to the major social and environmental trends that are reshaping markets. The report, "Tomorrow's Market: Global Trends and Their Implications for Business", sets out 19 'powerful' trends that this group of organizations see as changing the shape of global markets and corporations' roles and strategies. In his preface to the report, Harvard Business School Professor Michael Porter says society is "learning that the most effective way to address many of the world's most pressing problems is to mobilize the corporate sector in a context of rules, incentives, and partnerships where both companies and society can benefit."

Businesses seem to be preparing themselves to play an ever-increasing role in developing public policy. Simon Zadek, author of "The Civil Corporation" (Earthscan Publications Ltd., 2001) says businesses are becoming part of the solution in addressing the challenge of sustainable development. Corporations are seeking "to gain a broader trust and legitimacy through visibly enhancing their non-financial performance," Zadek writes.

Too bad BC's government doesn't subscribe to the same approach. If a business truly committed to the principles of corporate social responsibility were ruling BC, it would be a blessing compared to the misdirected efforts of Gordon Campbell's Liberals. To paraphrase a comment made by David Kearns, the then-CEO of Xerox in 1985, "If we cannot afford to protect society, we should get out of the business."

British Columbia's newest export is rapidly becoming government irresponsibility and it comes at a highly inopportune moment. Corporate Social Responsibility Week will be celebrated May 6 to 10 in Canada. It will highlight good corporate citizenship, sustainable economic development, community investment, and environmental stewardship. Shouldn't a government -- especially one wishing to partner with the business community -- be setting higher ethical standards and helping build a better society?

A "good corporation" charter already exists (see www.goodcorporation.com). What we now need is a "good government" charter. BC's Liberals are not behaving like a good business or a good government. One can hardly wait for the takeover.

RESOURCES - Canadian Business for Social Responsibility has headquarters in Vancouver and a web site at www.cbsr.bc.ca. CBSR has just released the first corporate accountability tool of its kind in Canada - The GoodCompany Guidelines. These guidelines enable companies to assess, improve and report on their social, environmental and financial performance. Other organizations dedicated to corporate social responsibility include Business for Social Responsibility at www.bsr.org, The Canadian Centre for Ethics and Corporate Policy at www.ethicscentre.ca, the Canadian Centre for Business in the Community at http://www2.conferenceboard.ca/ccbc/, and The Institute of Business Ethics at www.ibe.org.uk/. The Corporate Social Responsibility Newswire is at www.csrwire.com. Ethical Corporation Magazine is at www.ethicalcorp.com). An extensive listing of web sites related to corporate social responsibility can be found on the author's web site at www.toenail.org. Other recommended reading includes "What We Learned in the Rainforest: Business Lessons from Nature" by Tachi Kiuchi and Bill Shireman, Berrett-Koehler Publishers, 2002; "The Chrysalis Economy: How Citizen CEOs and Corporations Can Fuse Values and Value Creation" by John Elkington, Capstone Publishing, 2001; and "Good to Great: Why Some Companies Make the Leap and Others Don't" by Jim Collins, HarperBusiness, 2001. Also recommended is the final report of the Canadian Democracy and Corporate Accountability Commission entitled "The New Balance Sheet: Corporate Profits and Responsibility in the 21st Century." It can be downloaded from the commission's web site at www.corporate-accountability.ca/. The report was issued at the end of January 2002 after a year long investigation of corporate accountability in Canada, including a series of cross-country hearings.

Michael Jessen is a Nelson consultant specializing in corporate and community social and environmental responsibility issues. He believes companies and governments can do well by doing good.


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