Salvadoran Effectiveness

A Comparison of Human Rights Monitoring Institutions for Multinational Corporations in El Salvador

By
El_Salvador_International_Tribunal_32
Salvadoran Effectiveness : A Comparison of Human Rights Monitoring Institutions for Multinational Corporations in El Salvador - Steve Arons

Abstract

Several institutions exist in El Salvador to monitor and enforce compliance with human rights standards by multinational corporations (MNCs). However, their effectiveness varies strongly as they differ in terms of legitimacy, resources and sanctioning power. Comparing these institutions, the article comes to the conclusion that many of them are largely ineffective. The most effective one is a special Salvadoran institution, GMIES, created on the basis of a voluntary agreement between MNCs and NGOs, which combines NGO independence with MNC cooperation.

Introduction

Multinational corporations (MNCs) and the foreign direct investment they make are popular in many developing coun­tries. According to conventional wisdom they bring technology, employ­ment and capital. But their impact on society is not always as benign as some would have it. More often than not, they also bring human exploita­tion, environmental pollution and social dislocation. Most disturbingly, they sometimes commit human rights violations. The need to monitor and enforce compliance with international human rights standards is therefore imperative. Today, many different monitoring and enforcement mechanisms exist. While each performs the same function, they do so under different organizational principles. Their effectiveness is a matter of ongoing debate. It is this effectiveness that the present study wishes to assess.

El Salvador is an interesting test case. Accused of turning a blind eye to severe human rights violations committed by MNCs, it has pioneered several specific monitoring arrangements for MNC behavior to ensure the respect of human rights at the workplace. These arrangements have been in place at least since the civil war was concluded over a decade ago, and results are starting to emerge. Some interesting conclusions can be derived from this data.

MNCs Under International Human Rights Law

This study is based on the notion of international human rights standards as defined in relevant multilateral treaties. But this presents an obvious problem: MNCs are not subjects of traditional international law. For most of its existence, international law has been strictly limited to the regulation of state interaction. It was made by states for states, and MN Cs had no place in it. Why, then, do many scholars believe that today international human rights standards are, or at least could be, legally binding upon MNCs?

There are three possible answers to this question. The first one is straightforward: international law does not apply to MNCs. If any obliga­tion at all, MNCs only have an indirect one. The obligation bearer is the state, not the MNC. This straightforward answer comes at a price, though. It precludes taking action against a MNC on behalf of interna­tional human rights because it only permits action against a state. If the state fails to enforce those rights there is no alternative remedy. Under this scheme, state inaction implies inaction in general.

This answer is mistaken, however, because it ignores the sea change which has occurred in international law. Beginning after the Second World War, the international community has recognized the need for universal law-making to effectively deal with the increasingly complex global environment. Today, many different entities fall under the purview of international law, e.g. insurgents, international organizations and, the most recent development, even individuals. As MNCs become more and more powerful, making it increasingly difficult especially for small and weak states to enforce laws against them, it has become clear that they, too, must be subjected to international law. A second answer to the above question therefore proposes that international law does apply directly to MNCs.1 However, this view is a minority position; the majority of inter­national law scholars rejects it for lack of sufficient precedent and trea­ties.2 The overwhelming consensus so far is that "hard" international law is not applicable to MNCs.

These leaves open a third answer. It uses the notion of soft law,3 which certainly contains many instances indicating an increased respon­sibility of MNC s towards their host communities. For example, the UN Sub-Commission on the Promotion and Protection of Human Rights, the main think tank and document drafting body for the UN Commission on Human Rights, recently adopted the "Draft Norms on the responsibilities of transnational corporations and other business enterprises with regard to human rights." While this document does not yet create legal obliga­tions for MNCs, it does demonstrate the conviction of the world commu­nity that MN Cs have internationally valid moral obligations. Although MNCs are not yet obliged to adopt international human rights as guide­lines for their foreign operations, they are strongly urged to do so. It follows that the human rights standards ratified by a country do apply in a certain sense to MNCs operating on its territory. They form the basic principles that the people of a host country may rightfully expect the MNC to uphold.

Effectiveness of Human Rights Monitoring Institutions

El Salvador is party to various international human rights treaties such as the International Covenant on Economic, Social and Cultural Rights, the Convention on the Rights of the Child, the Convention on the Elimination of All Forms of Discrimination Against Women, and the Additional Protocol to the American Convention on Human Rights, which all include specific provisions for employment and working condi­tions.4 Applicable human rights standards-applicable in the sense described above-therefore undeniably exist. Despite these obligations, though, human rights violations by MNCs are a pervasive phenomenon in El Salvador. Salvadoran maquilas, i.e. low-wage textiles assembly plants, are regularly singled out for bad working conditions, the prohibi­tion of unionization, women's exploitation and the persistent occurrence of child labor.5

As a result, El Salvador has experienced a considerable growth in the number of institutions charged with monitoring and enforcing international human rights standards at the workplace. Today, there are many: the labor department, trade unions, NGOs, etc. This wealth of competing institutions is certainly a sign of progress compared to the situation prevailing before. People looking for redress for human rights. violations committed against them now have a real probability of finding it. On the other hand, it is evident that each institution will have particu­lar strengths and weaknesses. Not every institution is equally helpful, and some may not be helpful at all. The question of which institutions are most effective arises.

The conceptual answer to this question is quite easy: the most effective institutions are those offering the quickest and most compre­hensive remedy to human rights violations. This effectiveness depends on a host of different factors. Its most important elements are legitimacy, resources and sanctioning power. 6 Legitimacy is a measure of the accep­tance an institution enjoys among the population. If an institution is accepted people have trust in it. It is thus a function of the institution's mandate, composition and professionalism. Where acceptance is lacking, people will be unwilling to seek help from the institution. The institution will not function because it is unwanted. Adequate financial and human resources must be sufficient to meet the set goals. If they are deficient, the institution lacks the necessary means to process the incoming de­mands and make appropriate decisions. It will not function because it is overtaxed. Finally, an efficient institution must have the power to enforce its decisions (sanctioning power). Without power, its pronouncements are empty. The institution will not function because it is irrelevant.

To find the empirical answer to the question of effectiveness in the case of El Salvador the existing institutions have to be held against the standard set by the defined criteria. More precisely the analysis has to answer the following questions: What institutions to monitor MNC behavior exist in El Salvador? How do they work? And, finally, do they help, i.e., are they accepted, do they have adequate funds, can they enforce'?

Broadly speaking, the existing institutions fall into two categories: state and non-state institutions. The state maintains two institutions that deal with the enforcement of human rights standards at the workplace: the ministry of labor as part of the executive branch on the one side, courts as part of the judicial system on the other.7 Non-state institutions can be divided into three types: trade unions, civil society movements and an independent monitoring body established by voluntary agree­ment. The following section assesses each of these in turn.

Human Rights Monitoring Institutions in El Salvador

LABOR DEPARTMENT

The ministry of labor is in charge of the implementation of general labor standards. It may receive complaints from employees alleging human rights violations and can decide to intervene on the employees' behalf. But for several reasons it is obvious that the protection it affords is insufficient. First, the labor department is not a human rights institu­tion. According to its own website, its mandate is to create an environ­ment of harmonious labor relations through adequate regulation. 8 Al­though one of its main tasks accordingly is the setting and implementa­tion of labor standards, human rights play only a minor role in the overall work. Nor does the website mention human rights anywhere else. With­out a clear mandate to promote, and even lesser so to enforce human rights, the labor department lacks the expertise to effectively monitor MNCs. In absence of mandate and expertise, it cannot have legitimacy.

This finding is buttressed by the evident lack of will on the labor department's side to act in the few cases where people do seek its assis­tance. Inspections conducted by the department are infrequent, superfi­cial and cursory. Labor inspectors regularly refuse to meet with workers, and government acquiescence in face of the breach of labor laws is common. They simply lack the will to confront powerful MNCs. In a major study on the issue, Human Rights Watch cites a Salvadoran Su­preme Court justice as saying: ''The maquila is very much protected here ... The Ministry of Labor is very political ... It does not apply the law but politics."9 Other organizations are equally critical of the ministry of labor. The IDHUCA, a leftist research institute, cites several cases of proven negligence on the ministry's side and concludes: "The facts speak for themselves. They show that [President] Francisco Flores and his cabinet have only one mission: sell El Salvador in foreign markets as the place where maquilas offering high output can be set up .... As a result they do not care about insecurity and other bad working conditions for their people."10 Finally, the failure of the labor department also comes down to a lack of adequate resources. It employs only 27 labor inspectors, few of whom are trained enough to discharge their function in accordance with their duty.11 The labor department therefore lacks legitimacy and re­sources. It is hardly surprising that no effective protection through monitoring is forthcoming on this basis.

JUDICIAL SYSTEM

A state's judicial system, represented by the courts, judges and attorneys, is the natural complement to the executive, as represented by the labor department in the case of MNC monitoring. It is designed to prosecute perpetrators of crimes and offer their victims the means to redress when the protective measures introduced by the state were unable to prevent the crime from happening. The judicial system, there­fore, should be the first-and ideally the only-addressee when system­atic human rights violations occur.12

The Salvadoran judicial system, however, is notorious for its weak­ness.13 Judges are neither independent, nor do they a have a high work ethos. Impunity for criminals, "especially for persons who were politi­cally, economically, or institutionally well connected," continues to be widespread.14 Unsurprisingly, then, the judiciary is reluctant to take up cases against MN Cs as each oft hem wields considerable political influence. To make matters even worse, in 2003 the credibility of the Salva­doran judicial system was further tarnished during the public disclosure of an enormous fraud scheme which had allowed many practicing law­yers to obtain their licenses without the necessary qualifications.15 Al­though well-equipped in terms of sanctions and resources, its legitimacy is at a record-low. Consequently, it does not afford sufficient human rights protection.

TRADE UNIONS

Trade unions are probably the most common way of enforcing human rights at the workplace. They certainly are the oldest. Although trade unions have not always seen themselves as human rights defend­ers-their more limited view of labor rights has prevented them from easily adopting a human rights strategy-they have always been at the forefront of the human rights struggle by virtue of their form and func­tion: they are composed of workers and therefore have a natural interest in good working conditions. Moreover, their long traditions as well as a high degree of organization and professionalism have turned them into a strong social force. It seems that trade unions are well placed to function as monitors of MNC behavior.

This seems particularly true with respect to El Salvador, which is rich in trade unions. A cursory research yielded the following list: Na­tional Union of Salvadoran Workers (UNTS), National Federation of Salvadoran Workers (FENASTRAS), Social Security Institute Workers Union (STISSS), Association of Telecommunications Workers (ASTTEL), Unitary Federation of Salvadoran Unions (FUSS) and Treasury Ministry Employees (AGEMHA). The fact book Regional Surveys of the World lists another 13 unions.16 But the number is misleading. Trade unions in general and Salvadoran trade unions in particular have several decisive flaws severely inhibiting their qualification for monitoring work.

The most important weakness derives directly from the unions' unique strength. Having self-interest in the enforcement of human rights makes them susceptible to biased judgment and to politicization. In fact, many Salvadoran unions maintain close links, personal as well as ideo­logical, to the radical-left party FMLN, the political successor to the former guerilla movement. In a society that still suffers from the hatred left by 10 years of civil war this can be an insurmountable obstacle to professional monitoring. The resulting lack of legitimacy not only im­pairs the unions' work because most companies see them as enemies; it also makes it easy for employers to undermine the unions' positions in public.

Moreover, trade unions are usually composed of the employees of a specific factory or company, unless the union has achieved a very high degree of centralization and professionalism. This means that the victims of human rights violations are their own defenders. While this may also pose a credibility problem it is above all a problem of anonymity. In many cases, the victims of human rights violations do not want to fight their employees openly out of fear of retaliation. Human rights advocacy can only be successful if the witnesses and victims can reasonably expect not to experience even more severe harassment as a result of their de­nouncement.

Additionally, human rights are only one, and probably not even the most important, concern of trade unions. Their first concern is the attainment of higher wages and better working conditions in general. Human rights violations in the workplace are an extreme. The normal work of a trade union takes place in other fields. Most importantly, though, trade unions cannot be more than a complementary mechanism for enforcing human rights at the workplace in El Salvador for the simple reason that one of the most frequently violated human rights at the workplace is the prohibition to form trade unions.17 Obviously, it is impossible to enforce the right to existence when it is precisely that right which is being denied.

Although trade unions in El Salvador are relatively powerful-in 2003 the country's health system was virtually shut down for months because of a STISSS strike-they lack legitimacy. Their politicization and their focus on other issues prevent them from becoming the main mecha­nisms in MNC monitoring and human rights enforcement at the work­place.

CODES OF CONDUCT AND GMIES

Firms worry about damaged reputations, which can strongly influ­ence customer choice, and they fear possible disruption of the production chain arising from workers' dissatisfaction. Bad working conditions can cause both. Consequently, many companies, especially MNCs that supply markets with socially-sensitive customers, have begun to adopt so-called voluntary codes of conduct. By receiving a certification that working conditions at the plants comply with defined standards, those companies hope to allay concerns about their production facilities.

While a rare phenomenon only a short time ago, codes of conduct have become common and accepted in El Salvador.18 One critical Salva­doran NGO wrote in 2000: "Five years ago, most of us considered volun­tary codes of conduct only an attempt of the corporations to lift their image or avoid state regulation. In a very short period of time the debate about the codes has shifted from an emphasis on social responsibility and entrepreneural self-regulation to the negotiation of concrete obligations ... "19 Today, then, most observers-both on the employers' as well as the NGOs' side-agree that codes help to implement certain standards. This consensus notwithstanding, it has become clear that most of a code's success depends on its specific design. Not every code is a solution, nor can codes of conduct be the only solution. In a very broad study, the US Labor Department concluded: "Corporate codes of conduct are a new and promising approach that can contribute to the elimination of child labor in the global garment industry. [ ... ] It is important to keep in mind, however, that codes of conduct are not a panacea."20

The doubts expressed by NGOs that MNCs may use codes of con­duct as smokescreens to stave off criticism stem from two main sources. First, many NGOs argue that the standards required by the codes fall far below what is normally considered necessary to ensure a safe working environment. Second, certification is frequently undertaken by private firms from outside the country. It thus attracts accusations of bias be­cause the firm seeking certification also pays the auditors, and accusa­tions of lacking cultural sensitivity because the auditors come from abroad.21 Collusion and half-hearted controls are therefore an often­heard accusation leveled at monitoring organizations.

MNCs active in El Salvador-either with their own plants or through subcontractors-have signed a range of different codes of conduct, most importantly WRAP (Worldwide Responsible Apparel Production) and the FLA Workplace Code of Conduct. 22 Firmly based in standard human rights documents, particularly ILO conventions, they establish compara­tively strict parameters regarding child labor, discrimination, harass­ment, freedom of association and work hours, among other things. By far the most important factor determining a code's success in the Salvadoran context, therefore, is the way it is enforced. The issue really hinges on the question of who conducts on-site visits and subsequently certifies the company's compliance with the code.

In this respect, El Salvador has become a pioneering case. In 1995, a Salvadoran subcontractor of The Gap, Mandarin, and NGOs cooperated to settle a particularly severe case of labor rights violations. As a result, an independent monitoring agency, GMIES (Grupo de Monitoreo Independente de El Salvador) was created in March 1996 to ensure the correct implementation of the agreement concluded by Mandarin.23

GMIES is composed of four Salvadoran human rights groups, three of which are Catholic organizations. Since its creation, GMIES has increas­ingly taken on new tasks. Today, it monitors the activities of Liz Clairborne and The Gap, two of the largest US apparel manufacturers, in their various Salvadoran plants. Additionally, GMIES has set up training programs to ensure the professionalism of its monitors and it has initi­ated a regional outreach program to share best practices across Central America.

GMIES has attracted widespread attention due to its unique setup.24 Instead of relying solely on either external auditors or internal monitor­ing, it combines active MNC participation with outside monitoring activity and thus represents a "hybrid" approach to MNC control.25 Furthermore, it consists of human rights NGOs rather than private auditing firms, giving it increased acceptance and legitimacy among the workforce. It thus represents a serious attempt by the MNC to actively engage with the local civil society without relinquishing too much of control over the monitoring process. This lends credibility to the reports, written by an independent organization, while it protects the monitored companies against excessive interference.

The results of GMIES have been reassuring so far. It has issued various reports on company compliance with the standards defined in the applying codes of conduct. The reports are written on the basis of extensive interviews conducted at the production facilities of the partici­pating companies, The Gap and Liz Clairborne. Moreover, the reports do not hesitate to detail specific breaches of the code. The first report com­piled for Liz Clairborne is not only publicly available, it also exposes grave deficiencies in its plants and accuses the company of procrastination in the fulfillment of its contractual obligations to allow GMIES staff onto its premises. In fact, Liz Clairborne is in breach of 10 out of 17 criteria checked by GMIES, including discrimination, sexual harassment and freedom of association.26

Despite these positive findings it is not easy to assess the effective­ness of GMIES. First, it is not clear how much the monitored companies feel compelled to ameliorate working conditions when GMIES exposes violations of the codes. At this point, a reaction by Liz Clairborne is still pending. Should it decide to eliminate the criticized deficiencies, GMIES will have won an important victory that will set a precedent for the whole region. However, should the company decide to remain passive or, worse still, to withdraw from the agreement with GMIES as a reaction to the strict monitoring, GMIES will suffer a decisive setback. Second, GMIES still operates on a very small scale. So far, it only monitors two compa­nies, one of which was particularly willing to cooperate due to the ex­traordinary media attention its case had attracted. While positive, there­fore, the results of GMIES' work are from representative. Overall, then, GMIES seems a promising approach. It combines the strength of NGOs, their independence and credibility, with the easiest solution to effective monitoring: MNC consent.

NON-GOVERNMENTAL ORGANIZATIONS

Finally, there are NGOs. They monitor MNCs not because they were asked to do so but despite the fact that they were not. Deeply suspicious of a company's sincerity when subscribing to a code of conduct, they believe it is impossible to rely on what companies and auditing firms tell them. Instead they rely on what they see and find out themselves. In El Salvador there is a considerable number of NGOs actively trying to force MNCs into compliance with human rights standards. They operate both within (e.g. Movimiento de Mujeres Melida Anaya Montes, MAM, Comite de Despedidos y Desempleados de El Salvador, CODYDES) and outside of El Salvador (e.g. National Labor Committee, NLC, Maquila Solidarity Network, MSN).

One crucial function of NGOs without an official monitoring role assigned to them is the public exposure of human rights violations. Many human rights violations at the workplace go unreported and therefore unnoticed. NGOs can offer safe addresses for reporting violations in the absence of alternative, i.e. more formal, communication channels. Fol­lowing up on such reports, NGOs may be able to uncover persistent violations, publicize them and thus help to stop them, as the case of Mandarin cited above demonstrates. It was only through the persistent action of NLC that Mandarin was moved to agree to the creation of GMIES, because its chief client, The Gap, feared negative repercussions from the media focus on working conditions in the Salvadoran plant. Moreover, this case not only demonstrates that NGO action may help end human rights abuses; it also shows that such action can be a first and decisive step towards the introduction of more formalized monitoring mechanisms.

NGOs that work outside a formalized framework also have an important early-warning function. Professional auditors only take action when they are authorized to do so. NGOs, by contrast, authorize them­selves. In a certain sense, their action can be preventive. In an ideal case, the NGO draws attention to cases of potential human rights violations, which are then prevented because the responsible company decides to act. It is undoubtedly true that maquilas would be much less of an issue today if NGOs such as NCL and MSN had been less outspoken about them. And their relentless work continues. Only recently, for example, NLC published a comprehensive-and scathing-report indicting a Salvadoran subcontractor of two major apparel MNC s for serious labor rights violations.27

NGOs in El Salvador also provide important services to victims of human rights violations. For example, MAM helps victims to find the right person to report human rights violations to, and occasionally offers legal assistance.28 Nevertheless, these services are quite limited. NGOs have a permanent financial problem. The government is usually reluctant to fund organizations which are likely to criticize it. Party support is not a solution either. Parties have considerable resources at their disposal, but in a polarized country such as El Salvador, support by a party invariably leads to politicization. NGO independence suffers, and the NGO can be easily discredited as partisan.29 The funding problem can also lead to a lack of expertise as the low salaries paid by NGOs may attract more idealistic than professional employees. As a consequence, many MNCs do not respect NGOs as serious actors, and even less as partners. The MNCs refuse to cooperate with them and thus severely obstruct their monitor­ing capabilities.

Thus, while NGOs make an invaluable contribution to the promo­tion and enforcement of human rights at the workplace, their shortcom­ings are obvious. Human rights work today is inconceivable without NGOs. But having neither mandate nor sanction power, and suffering from permanent under-funding, they lack the necessary legitimacy and power to function as effective MNC monitors.

Conclusions

Obviously, none of the institutions existing in El Salvador is per­fect-or else there would be no human rights violations by MNCs. Some do offer a certain amount of protection, though, and they do so more effectively than others. First of all, it is evident that the state institutions afford insufficient protection against human rights violations at the workplace. They neither monitor nor enforce to a degree that would make additional, non-state institutions superfluous. In fact, the state institutions in El Salvador are so ill-equipped for this function that there is little hope they will ever be in a position to discharge them. The peren­nial problem of too much MNC power in too small a state with too much corruption makes the mobilization of enough political will to seriously address the issue next to impossible.

Fortunately, there are complementary institutions in El Salvador which help to fill the void. The first group comprehends the most power­ful non-state, non-MNC actors, trade unions. Their resources make them likely candidates for monitoring and enforcement work. But despite this advantage, they are often unqualified because of their lack of neutrality and preoccupation with issues other than human rights. Nor are NGOs always capable of discharging their function in a satisfactorily fashion. Lack of resources, lack of power and non-acceptance from the MNC side severely hampers their work.

Although it may still be too early for a final judgment, the experi­ence of GMIES seems to indicate a certain success. Its exemplary combi­nation of NGO credibility with MNC collaboration makes it the most effective among non-state monitoring institutions, and indeed among Salvadoran human rights monitoring and enforcement institutions in general. As long as the state of El Salvador is unwilling to effectively enforce human rights, MNC compliance with human rights standards remains a matter of choice and persuasion. Therefore, MNC consent remains a main ingredient in the implementation of human rights at the workplace, and the GMIES approach remains the best option currently available.

Notes

Steven Arons received a M.A. in Political Science from Heidelberg University, Germany. He is currently working towards an MA. in International Relations at the Johns Hopkins University's School of Advanced International Studies.