As a compliance officer asked to update the Board of Directors on the regulatory environment for doing business in countries where human rights records and protections have been weak, how would you support your recommendations based on the legal cases discussed in the Schrempf-Stirling and Wettstein () article? Please support your analysis with specific examples.

Human rights have quickly become a polarizing and contentious issue with many of the developing countries. Element such as working conditions, hours, benefits, and wages are now being highly scrutinized as it relates to global standards. A growing number of corporations have exploited lax rules and regulations in an effort to increase profitability at the expense of their workers. Interesting, both small and large companies have been found to exploit these legal loopholes for their own gain. These companies include well established brands such as Google and well as lesson known companies such as Roche. In each instance however, there has a wide spread abuse that has resulted in the exploitation of workers, primarily in developing countries. To mitigate these occurrences a large number of corporates are filing foreign direct liability cases in the country in which the multination is domiciled. Unfortunately, a vast majority of these cases have been dismissed. However, in each instance the company has adjusted their human rights policies to better reflect the higher standards of the country in which they are domiciled. As a compliance officer, I would ask the board of directors to adopt the human rights standards in their country of origin to help avoid conflict of interest and the temptation of adopting lesser standards to exploit others (Alston,, 2005).

As the Schrempf-Stirling article indicates, human rights violations are a byproduct of globalization. Many developing countries are looking to open their markets to competition, foreign direct investment, and joint ventures. Many of these countries including China, India, and Brazil are attractive due to their very large and growing middle class. Currently, these individuals have very low incomes relative to their developed country counterparts. Certain areas of India and Brazil for example make less than $5,000 a year. Going to other parts of African and South America these figures are even worse. As a means to improve the middle class these developing countries have allowed businesses to invest within their respective countries in exchange for hiring native born citizens (U.N. Centre for Human Rights, 2004). This has worked particularly well for developing countries as they are able to penetrate a very attractive market while the developing country obtains access to products, goods, and service. In the case of China, they have require developing countries who enter their markets to have a Chinese joint venture partnership. This was particularly useful as China was able to learn the product know-how necessary to develop the products themselves. In certain instances, businesses have been known to outright steal the intellectual property of American companies with little to no repercussions. Developing nations were happy to oblige with these demands as they were able to sell products to growing middle class with very strong purchasing power. Due to this globalization, multinational...

…the consequences of not adhering to a strong standard can be dire. As Nike has indicated, the brand can forever be tarnished due to irresponsible behavior. We have seen brands that have never recovered due to irresponsibility. BP, the oil and gas company, had one of the largest oil spills in modern history. Here, the company employed a litany of low skilled foreign workers to help boost profits and lower wage costs. In addition, the company did not adhere to security and governance protocols resulting in faulty equipment. The combination of low skilled cheap labor and faulty equipment resulted in a large oil spill that destroyed the surround ocean areas, the coasts and the overall ecosystem. The damage to the brand and environment has been severe. Since the oil spill in 2010, the company stock price has still not recovered. The share price prior to the oil spill was nearly $60. Today it is $20 reflecting the deterioration of confidence from investors, society, and the public at large. This same fate can befall any company that does not adhere to strong human rights protections.

In conclusion, the recommendation is for multinational corporates to leverage their expertise to have a minimum standard of employment throughout the world. This ensures that human rights violations will be met and the brand will not suffer the consequences mentioned above. We have used two case examples with both BP and Nike showcasing how these violations can negatively impact a company. We have supported the analysis with examples above and why it is important to…