Download On Legal Nature of Corporate Social Responsibility

On Legal Nature of Corporate Social Responsibility
Chang Kai
“Corporate social responsibility”(CSR), as a social campaign, was initiated in the
1980s in the west, and has become prevalent worldwide with the process of
globalization.1 The renewed interest in the topic of CSR is immediately related to the
increasingly serious worldwide labor-management disputes. So far this wave of
disputes has been started in China. Because of the complicated social background for
this campaign, people hold different view on the nature of CSR. The author of this
paper maintains that CSR refers mainly to the legal responsibilities a company is to
undertaken towards the society. As far as the scope of responsibilities is concerned, it
mainly refers to the responsibilities a company should take on the adjustment of
internal labor relations and on the realization of the laborers’ rights and interests. With
this respect, it can be assumed that CSR is a term directed related to the law of labor.
This paper is to start from this recognition and explore on the nature of CSR and
relevant issues related to the legal adjustment of the labor relations.
I. Corporate Social Responsibilities and Corporate Rules
The so-called ‘corporate social responsibility’2，refers to the fact that under the market
oriented economy, CSR should not only include pursuant of interests for stockholders,
they should also take into account the relevant interests of stakeholders, i.e. the
interests of the various parties who influence or are influenced by the behaviors of a
company. Of the two, the interests of the employees constitute the most direct and
main content of CSR. Therefore, the basic operational method to achieve CSR is the
so-called “the campaign of corporate production rules”, which is also known as ‘the
campaign of corporate operation norms’ or ‘the campaign of factory regulations’.
Refer to the author’s article: “Economic Globalization and Other Social Responsibility Movement” concerning
the emergence and impact of CSR movement on China，《Theory and Practice of Trade Unions》4th Issue, 2003.
2 Corporate Social Responsibility is also translated in Chinese as “公司的社会责任”. Author of this article
believes that the translation of “企业的社会责任”is more accurate. Under mature market economy, incorporated
companies are the basic form of enterprises. However, in China, the incorporate company system is still being
built. Enterprise in the form of an incorporated company is only part of the system. The connotation of CSR
includes not only the social responsibilities of enterprises in the form of incorporated companies and
multinational corporations, but also the social responsibilities of all other forms of enterprises. Under the Chinese
condition, the translation of “公司的社会责任” may be misunderstood as that the social responsibilities refer
only to those of the enterprises in corporate system or multinational corporations.
1
1
CSR is not an innovative new concept. Rather, it was initiated in the twenties of the
last century out of a series of such social conflicts resulted from continuous expansion
of capitals as polarization between the rich and the poor, social poverty and especially
labor issues and industrial disputes.
Some scholars think that it is Oliver Sheldon of the US who put the concept forth for
the first time. In 1924, he proposed that a company’s business operation should be
combined with responsibilities of all human necessities inside and outside the industry.
The interests of a community should be placed prior to the profits of a company. This
idea has greatly impacted the traditional social concept in which “the responsibility of
a company is simply to make money for stockholders”.
3
It should be said that
Sheldon’s idea was very influential on corporate theories. In the jurisprudential circle
of labor law, a common consensus on corporate social responsibility has been
basically formed at early 20th century and this consensus has been substantiated into a
legal norm for the realization of CSR, i.e. employment rules. For instance, in the
jurisprudential circle of labor law in Japan, an important topic discussed in 1923 was
the issue of the legal effectiveness of the employment rules as a social norm.”4
CSR involves the human needs of various people inside and outside the company,
with the interests of the laborers’ in the company as the most direct and the most
practical. As a legal issue, it involves how to stipulate and control the internal
corporate rules. The so-called corporate rules are also known as “employment rules”,
“work rules”, “factory rules”, “service rules” and so on. They include the various
rules used for all or the majority of the staffs in a company, regulating the various
behaviors targeted or mainly targeted at the employees in a company. These rules
exist in general as a subsidiary to a labor contract.5 In these rules made by employers,
the stipulations on working conditions are often very weak, whereas the one on labor
disciplines are very stringent. Laborers on their unilateral part are in no position to
violate or amend these rules. This situation accelerates the rise of industrial disputes.
For this reason, how to make the employment rules into a social norm has become a
basic proposition in the labor law. The basic implication of this proposition is that
Liu Jun Hai《Corporate Social Responsibility》
，Legal Press，March Edition, 1999，pp2—4.
[Japanese]末弘严太郎: “Legal Nature of Employment Rules”, “Journal of Society of Law”, Volume41 No 6,
June, 1923
5 Refer to “On Law of Labor” by Huang Yue Qin, Institute of Labor Research, Taiwan University of Political
Science, 1994 edition, and p122.
3
4
2
employment rules, as the rules stipulated by employers by taking the advantage of
their management powers, cannot be completely separated from social norms. When
looking from the perspective of the law of labor protection, “if companies are to
decide the minimum labor standards by taking the achievement of industrial
autonomy as the goal and the right of unity as the basis, then, the corporate rules are
significant in restricting themselves in their rights.6
The corporate ‘social norm’ has similar implication as CSR and is more significant in
legal operation. The corporate social norm or CSR are generally realized through
‘factory rules’, or the so-called ‘corporate rules’ or ‘employment rules’. They have
always been the basic legal issue to deal with the corporate development and
industrial disputes under the market oriented economy.
II. CSR Legal Background and Basis
CSR was once again revived in the eighties of last century and taken as a global social
campaign. Its legal background is mainly displayed as profound conflict between the
right of ownership and right of existence during globalization process.
The campaign of CSR is initiated with gradual progress of economic globalization
and the emergence of new social and economic problems with labor issues as its focus.
Economic globalization means capital globalization. In this global trend,
multinational corporations as the most important advocators and beneficiaries of this
global process have growth into the dominant forces to control and influence the
global economic development. This kind of capital expansion results in exploitation
and deprivation of laborers in the worldwide scale. The contrast between the forces of
laborer and management is in extremely unbalanced situation. The multinationals
acquired astonishingly high profits from all over the world and the laborers in those
countries confront ever-increasingly serious unemployment and poverty driven by “a
race to the bottom on wages and working conditions”. The economic globalization is
coupled with the globalization of poverty. The guarantee of laborers’ rights and
interests has become a worldwide social issue. The appearance of this issue is directly
related to the behavior of making money by large business institutions and especially
to the multinational corporations.
6
[Japanese]沼田稻次郎: “Brief Introduction to Law of Labor”, Press of Legal Culture, June 1967, Japanese
edition, pp245-246.
3
Pushed by NGOs such as labor organizations, consumers groups, human right
organizations and environmental protection organizations, the issue of CSR was
brought up again by many countries in the call of protecting labors’ rights and fighting
against unfair competition and globalization through public protest.7 A campaign of
CSR is gradually initiated. The campaign of “corporate production rules” is another
important form of operation of the campaign of CSR under globalization. “The
campaign of corporate production rules” is also called “the campaign of corporate
operation norm” or “the campaign of factory rules”. The direct objective of corporate
production rules is to make enterprises to carry out their own social responsibilities.
This campaign requires companies and especially multinational corporations to work
out and implement labor standards including wages, working times, safety and
hygiene according to the International labor standards.8
Economic globalization publicizes capitals from its dominating position in the social
and economic life to the worldwide scale. At the same time, the labor status is going
down. Theoretically speaking, the ownership of capital is in fact a deprivation of the
right of freedom for laborers. The abusive use of the right of capital results in the
flaws or malpractice of capital, which is surely contradicting to the feelings of the
workers’ rights.”
9
As far as its nature is concerned, the workers right is the right of
existence. This right of existence, “which is innate and is the right for all people,
should of course be given the priority to the right of property. To fulfill this right of
existence, the legal observation of commonly achieving public welfare should be
taken as the precondition.”10
The right of existence refers to the right to guarantee people the basic living
conditions.11 This concept was first proposed as a natural right by a scholar of natural
law. Of course, the right of existence for human beings should be considered as a
natural right in abstract sense. As long as they are human beings, they should live on.
However, in a concrete sense, the right of existence is a social right because it is not a
natural issue as to what kind of people in a society live by what kind of means. Here,
human right is a teleological concept with social progress as its objectives.12
Refer to “What does it mean to be against globalization?” by Xiao Tong, Beijing Youth Daily, August 12, 2001.
[Japanese] 遠野春日：
《下からのグローバル化を——「企業行動規範」の実現に向けて》。
9 [Japanese]沼田稻次郎: “On Advocating the Right of Unity”, 勁草書房 July, 1952, 1st edition, May, 1969, 3rd
edition, p43.
10 [Japanese]片岡舜
橫井芳弘編《演習勞動法》
，青林書院新社, March 1972, Japanese edition, p54.
11 [Japanese]沼田稻次郎等編集《勞動法事典》
，勞動旬報社, Dec 1979, Japanese edition, pp828-829.
12 Refer to “Origin of the Notion of Human Rights” by Xia Yong, Press of University of China’s Political Science
7
8
4
To take the right of existence as a social right and to have it initiated into a social
movement is actually a denial or challenge to the jurisprudent idea in the 19 th century
focusing on freedom. The right of existence in natural law, which is aimed at
emphasizing the right of existence as one of the rights of freedom and offering passive
protection on it, stresses on the fact that the right of existence should not be infringed
by the state illegitimacy. However, in reality, under the capitalist condition, as far as
the so-called freedom is concerned for workers, what they have is only the freedom to
be exploited and to suffer poverty. To guarantee the right of existence of the workers,
the freedom right of capital has to be checked, especially the freedom to labor
contracts and the freedom to property right has to be restricted.
The representative of Solidarists Di Ji thought, private property does not mean power.
Rather, it denotes simply an objective legal status. Capitalists and workers take up
different social functions according to different division and take up joint solidary
obligations. For this reason, capitalists and workers should form their own groups and
unions to protect their interests.13 Looking from the perspective of jurisprudential
philosophy, the proposition of labor right as a social interest is put forth because the
labor right is a not-ignorable social right for balanced social development.
Contemporary legal idea breaks up the idea of absolute ownership. And the modern
legal system, which takes civil law as the basis, is characterized by state intervention
and social standard.14
The reason why CSR can become a social campaign prevailing all over the world is
because this movement is backed up with sufficient international law. The nine
principles protecting workers rights and interests
15
are clearly defined in the Charter
of International Labor ratified as early as in April 1919 in Paris Peace Pact. Most of
these principles have already been reflected in the International Labor Convention and
its agreements entered before the World War II. In 1944, International Labor
Organization ratified the Philadelphia Declaration in Philadelphia, USA, re-defining
and Law Study, Feb 1992 edition, p170.
Refer to “On Constitution” by Di Ji, Commercial Press, 1959 edition, pp473-474.
14 Want Jia Fu al et: “Theoretical Thinking and Strategies on Building up the Legal System under Socialist Market
Economy”, “Law Study”, Issue 6, 1993
15 The main points of the Nine Principles of International Labor Charter include: 1. Human workforce should not
be deemed as commodities; 2. Both workers and employers should have the right of association; 3. Workers
should be paid enough wages to sustain appropriate living standard; 4. The working hours for workforce should
take 8 hours per day or 48 hours per week as the standard; 5. Workers should have at least 24 hours of rest per
week; 6. It is forbidden to employ child labor under 14 and employment of children between 14-18 is restricted;
7.Same work same pay for men and women alike; 8.Stipulations on applying labor standards for foreign
workforce; 9.All countries should set up labor supervisory system. See “International Labor Legislation” by
Ren Fu Shan, Chinese Labor Press, Feb Issue, 1991, p227.
13
5
the objectives and principles fighting for the workers rights and interests after the
War.16 The principles and objectives in Philadelphia Declaration become the basis
and immediate objective for International Labor Organization and working class in
different countries to fight and expand the workers’ rights and interests after the War.
According to the Philadelphia Declaration, International Labor Organization passed a
series of conventions and agreements concerning fighting for and guaranteeing the
labor rights and interests. The content of these conventions and agreements mainly
include the guarantee of such rights as basic human right, employment, working
conditions, labor relations, social policy and social security, labor administrative
management, special groups and specific vocations. In order to fight more practically
for the rights and interests of the workers, ILO takes as the most important and the
core conventions those conventions that involve laborers basic human rights,
including the freedom of association, forced labor, equality in opportunities and equal
treatment.17 In June 1998, ILO Declaration on Fundamental Principles and Rights at
Work and its Follow-up was approved by the 86th Generally Assembly of ILO.18 The
Declaration sets that the basic rights of laborers include the following four contents: 1.
Freedom of association and collective bargaining; 2. Elimination of any forms of
forced labor; 3. Effective abolition of child labor; 4. Elimination of discrimination in
respect of employment and occupation. These four basic labor rights are clearly
expressed in the 8 conventions of the ILO.19
The principles of “Philadelphia Declaration”: 1. Labor is not commodity; 2. Freedom of speech is a necessary
condition of continuous progress; 3. Poverty poses threat to prosperity; 4. The fight against poverty should be
carried on with persistence. The goal of “Philadelphia Declaration”: 1.sufficient employment；2.To employ
workers in the profession where they may maximize their skills and achievements; 3. To provide conveniences
for training and transfer and for motivation of workforce; 4. To substantiate improvements and achievements
fairly in policies on wages, income, working hours and other working conditions; 5. To acknowledge the right
of collective bargaining and cooperation between workers and management; 6. To enhance the social security
measures; 7. To fully guarantee the life and health of workers in all sectors; 8. To provide child welfare and
protection on delivery women; 9. to provide sufficient nutrition, housing and cultural and recreational facilities;
10. To secure equal opportunities on education and employment. See “International Labor Legislation” by Ren
Fu Shan, China Labor Press, Feb edition, 1991, p228.
17 Refer to “Report to No 235 Session of the Council Meeting of ILO by Working Group of International Labor
Standards”, March 1987.
18 The English name of the Declaration is ILO DECLARATION ON FUNDAMENTAL PRINSIPLES AND
RIGHTS AT WORK AND ITS FOLLOW-UP. It is usually translated into Chinese as “国际劳工组织关于工作中
基本原则和权利宣言及后续措施”. Upon consultation with Mr. Wang Jia Chong, once the deputy workers’
delegate to ILO, Mr. Wang thinks that this translation is not accurate. The correct translation should be “国际劳工
组织关于劳工权利基本原则宣言及后续措施”. The local newspapers in Chinese in Hong Kong has the
document translated also as “劳工权利基本原则宣言”. See “Workers Alliance and Unity Daily” in Hong Kong,
Issue 40, 1999.
19 The eight conventions include: 1. The Convention on the Right of Freedom of Association and Organizations
Protection in 1948（Pact No87）; 2. The Convention on the Right of Organization and Collective Bargaining in
1949 (Pact No. 98); 3. The Convention on Forced Labor in 1930（Pact No 29）
；4. Convention on Elimination of
Forced Labor in 1957；
（Pact No. 105）
；5. Convention on Same Work and Same Pay for Men and Women in 1951
（Pact No 100）
；6. Convention on Discrimination with respect to employment and vocation in 1958 （Pact No.
111）
；7. Convention on Minimum Employment Age in 1973（Pact No 138）
；8. Convention on Abolition of the
Most Horrible Form of Child Labor in 1999（Pact 182）.
16
6
It is pointed out in the Declaration that the aforementioned basic labor rights are the
ones that all member states have accepted the principles and rights in the statement of
its “Articles of Constitution” and the “Declaration of Philadelphia” when joining
voluntarily into the ILO. The Declaration states: “Even though the relevant
conventions are not yet ratified, all member states simply because of the fact of being
member states of ILO and as the principals of these conventions should have the
obligation to respect, promote and implement sincerely according the requirement of
the Articles of Constitution the various principles of the basic rights”.
In order to deal with the social economic problems and especially labor issues
resulted from the economic globalization, ILO took “decent labor” as the new
strategic target for labor organizations in 1999. The so-called “decent labor” refers to
the “promotion of men and women to acquire the right to decent and productive job
opportunities under free, fair, safe and dignified condition. Decent labor means that
work rights are guaranteed; there are sufficient job posts; enough income; and one can
sufficiently enjoy social protection. To achieve the decent labor, ILO proposed four
strategic goals: 1. To promote principles and rights at work; 2. to promote
employment; 3. to promote social protection; 4. to promote social dialogue.20
In the call for “decent labour” by the ILO, the UN proposed in 1999 the “Global
Compact” for business enterprises, directly encouraging and promoting “the
Enterprise Production Rules Movement.” The Global Compact requires that
multinational enterprises stress on labour standards, human rights and environmental
protection in order to overcome the adverse impact brought about by the
globalisations process. It also proposed the Nine Principles and the core issues
concerning respect of human rights, the support of freedom of association and the
effective recognition of the right to collective bargaining, the abolition of child labour,
elimination of all forms of forced and compulsory labour, the elimination of
discrimination in respect of employment and occupation and promotion and
encouragement of the development and dissemination of environmentally friendly
technologies.21
It should be said that the CSR Movement and the Corporate Production Rules
索马维其：Report by Director of International Labor Bureau: Decent Labor, 87th Generally Assembly, ILO,
1999 in Geneva.
21 Refer to Zhou Guo Yin and Zhang Shao Biao: “Introduction to Enforcement of International Standards of
Social Responsibility”, Haitian Press, April edition, 2002, p39.
20
7
Movement in its specific form, is a kind of legal action established against the
background of globalization and for the coordination between the industrial
relationship and protecting the right of existence for the workers.
III. Legal Nature of CSR
CSR may include responsibilities in legal sense and in moral or ethical sense. Since
the Factory Rule Movement, the specific implementing method of CSR takes mainly
multinational enterprises as the implementing principal to place checks on labor
standards of a company, the responsibility in moral or ethical sense is more stressed in
the society. In fact, the multinational enterprises are passive to a certain extent in
implementing the Factory Rules, which takes labor standards as the main content.
Their immediate purpose is to maintain their business credit amongst the trade
barriers of labor. Specifically, their purpose is to keep their brand name image and
avoid negative legal proceedings, avoid consumers’ resistance, drop of stock prices,
trade sanctions, improve production efficiency, and optimize the management of
supply chains.22
Obviously, the fact that multinational enterprises implement the Factory Rules is not
because they are driven by moral sense of responsibility or pursuit of ethical values.
Rather, in more direct sense, it is a business act with business purpose. If as a pure
business conduct, the CSR Movement will change its social nature. Therefore, the
legal nature of corporate social responsibility must be recognized and stressed. In fact,
it is because of the requirement of the legal nature of this movement, transnational
enterprises are forced to do so and try all their best to turn the movement
commercialized for their own interests.23
CSR, especially the factory rules as the basic operation mode of present CSR
movement, so far as its nature is concerned, is the legal responsibility of an enterprise
or an obligation of an enterprise in the labor relationship. The significance of
proposing the obligation of an enterprise in the legal labor relations as its CSR lies in
the fact that this legal norm is better combined with social norms to promote the
22
23
Refer to Zhou Guo Yin and Zhang Shao Biao: “Introduction to Enforcement of International Standards of
Social Responsibility”, Haitian Press, April edition, 2002, p32.
Refer to Yu Xiao Min: “Economic Globalization and Production Rules of Multinational Corporations”, edited
by Zheng Gong Cheng and Zheng Yu Shuo “Labor and Social Security under Globalization”, Press of China
Labor and Social Security, June Issue, 2002, p133.
8
implementation of this legal norm. As a legal norm, the basic requirement to the social
responsibility a company takes is to substantiate the obligations undertaken in the
legal labor relations. This obligation an employer undertakes is conditioned upon his
enjoyment of his rights at the same time. These rights include recruitment right in
individual labor relationship, right of labor instruction, right of work dispatch, right of
reward and punishment and right of plant closure in the legal collective labor
relations.24 These rights are regarded as the user’s rights in contrast to the rights of
the laborers. But at the same time, employers must undertake relevant obligations.
This means employers must carry out and implement relevant labor standards to
enforce the protection on laborers during the laboring process. Specifically,
employers’ obligation in an individual legal labor relation should be first of all to
make payment, which is also the obligation of an employer in the law of property;
secondly it is the obligation of labor protection. Secondly, it is the obligation of labor
protection. This obligation is one as prescribed in the law of personality, mainly
including the moral rights of protecting laborers’ life and health during production
process and their personal dignity during production management.25 In collective
legal labor relations, the obligation of an employer is mainly not to hinder the workers
to exercise their right of unity. During the process that the workers establish their
trade unions, hold collective bargaining and take collective actions, employers should
not antagonize by means of resorting to improper labor act. 26 Generally speaking, in
individual legal labor relations, the obligation of an employer is mainly an obligation
of action, i.e. to take appropriate act to ensure the fulfillment of individual workers’
right of labor. In the collective legal labor relations, the obligation of an employer is
shown to be one of non-action, i.e. the employer should not take actions to hinder or
harm the exercise and fulfillment of laborers collective rights and interests.
The obligation of an enterprise in the legal labor relation is mainly realized through
legal adjustment of the labor relationship. The conventional legal adjustment of labor
relations is done by two ways: one is to have the state to stipulate and implement
labor standards; the other one is to have workers to organize trade unions and hold
collective negotiations and bargaining. Employment rules or factory rules, in
conventional legal adjustment of labor relations serves only as a supplement.
However, the present movement of CSR develops factory rules or production rules
24
25
26
[Japanese ]松冈三郎著: Labor Law – History and Theory of Power”, 弘文堂, Dec Edition, 1968, pp123-174.
Refer to Huang Yue Qin: “On Labor Law, Institute of Labor Research, Taiwan University of Politics, 1994
edition, pp175-205.
Refer to Chang Kai: “On Legislation on Inappropriate Labor Act”, “Chinese Academy of Social Sciences, 5th
edition, 2000.
9
into a form of adjustment of labor relation with relatively independent operating
mechanism. This form of adjustment is a new development to the legal adjustment of
labor relations. However, this new development has not changed a bit of the basic
requirement of legal labor relationship, which still stresses on the employer
obligation.27
In actual practice, people often ignore the form and nature of CSR as legal adjustment
of labor relations. One outstanding issue is that the idea and method of human
resources management is entirely used to enforce CSR. Though in reality, the
management of human resources and that of labor-management relations is crisscross
and inseparable, still, the labor-management relation cannot be dealt with entirely by
the method of human resources management. The legal adjustment of human
resources management and that of labor relations are two completely different idea
and norm systems. The human resource management is a business management
method focusing on the interests of an enterprise and aiming at improving the
competitiveness of the enterprise. The power principal of management is the
enterprise and workers are merely the passive objects of management. On the other
hand, the legal adjustment of labor relation is to coordinate and balance the labor
relationship in an enterprise with protecting laborers rights and interests as their basic
rationale. The principals of the rights and interests are the two parties of workers and
management. The basic method of adjustment involves reciprocal handling and
voluntary participation by the two parties of workers and management.
In fact, there is deep down a profound social factor in the exercise of enforcing
corporate social responsibility movement entirely by the method of human resources
management and adopting resisting and rejecting approaches to the idea and method
of legal adjustment of labor relations, which is that employers try to achieve control
over workers and replace or resist traditional labor movements through implementing
factory rules.
27
28
28
Many enterprises which have implemented and even been
Some people comment that production rule is a new form of legislation on labor against the background that the
traditional legislation on labor has become helpless for the solution of labor issue. The author believes that the
basic form of solution to labor issue still relies on traditional legislation on labor. As to production rule, it
cannot be deemed as legislation in legal sense. Rather, it is a form of legal adjustment of labor relations. The
present production rule movement is neither a new legislation on labor, nor a replacement to the traditional
legislation on labor. It is only a development and supplement to the traditional method of labor relation
adjustment. As far as its nature is concerned, it still belongs to the category of legal adjustment of labor
relations. See Yu Xiao Min: “Economic Globalization and Production Rules of Multinational Corporations”,
edited by Yan Shen and Liu Kai Ming: “The Social Responsibilities of Multinational Corporations and Chinese
Society”, Literature Press of Chinese Academy of Social Sciences, Jan Edition, 2003, p51.
A CEO of human resources in China Area, some well known multinational corporation asks the author if it is
possible not to set up a trade union within the corporation. The reason is that the tradition of the enterprise does
not welcome outside forces to get involved. However, the trade unions in china are not corporate organizations.
10
acknowledged through social responsibilities maintain that it is an enterprise’s
responsibility to implement relevant labor standards. It is also the company’s rights.
Workers should be the beneficiaries.29 Hence, in the enforcement of CSR, enterprise
management is basically unilateral in the action and workers are simply work object
of the management. It seems that an impression is created that the rights and interests
of the workers are granted by the enterprises. When emphasis is made on the legal
nature of CSR, it is aimed at stressing on the fact that CSR movement is not intended
merely to improve workers’ benefits and treatment. Rather, it is intended to seek for
the rights of the workers as an independent principal. In other words, the legal nature
of the CSR lies in the achievement of the laborers’ rights during the corporate
production process.30
Speaking from the perspective of labor law and when thinking in deeper level of
social significance, the guarantee and pursuit of laborers’ rights is to realize the
freedom of personality and dignity. Labor is an independent production component,
not an accessory to capital. Laborers, as the bearers of this production component,
work to the ultimate purpose of fulfilling their values. Laws are supposed to support
and protect the personal dignity of the laborers during the legal adjustment of labor
relations. As an independent personality, laborers should be able to decide and deal
with any affairs related to his dignity, including employment selection at their own
will, freedom of association, rights of bargaining and boycott, and the reciprocal
decision-making right with employers with respect to the handling of labor relations
and interests with employers and of operation. These contents advocated and pursued
in the traditional labor legislation and labor movements can by no means be replaced
by corporate human resources management.
Still, there are common grounds between corporate human resources and labor
relations management, i.e. both are dealing with relationship between enterprises
(employers) and employees. Humanism is the common starting point for the handling
of human resources and labor-management relations. It is also the common target
followed by both employers and workers. Therefore, CSR cannot only be included as
29
30
Rather they are social and political groups.
The author once attended a conference concerning corporate social responsibility in Oct 2001. Many enterprises
that have implemented the factory rules hold similar beliefs.
The two words of Right and Interest are similar in meaning. However, they denote two different concepts.
Though the word Right is inclusive of the meaning “interests”, and in academic circle, there is an opinion that
the connotation of interest has been included in the definition of the word Right, the connotation of the word
“Right” still does not refer to interests. The general acceptance of the word Right in academic world is that the
principal of a legal relation can conduct or not conduct a certain act and ask others to give or not give promise
or guarantee of performing or not performing certain act. The interests are the immediate benefits. (See Volume
of Law, Chinese Encyclopedia, Press of Chinese Encyclopedia, 1984 edition, p485.
11
the content of corporate human resources management but also be taken into the
scope of legal adjustment of labor relations.
IV. Bringing CSR into Orbit of Legal Management of Labor
CSR Movement involves two kinds of rationale and mechanism, i.e. human resources
management and adjustment of labor relations. Any attempt to try to monopolize or
replace the adjustment of labor-management relations or to resist human resources
management by means of manipulating labor-management relations is regarded as
inappropriate and not practical. This movement represents two economic forces –
capital and labor, and two economic rights – the right of property and right of
existence. How to combine the two movements is what a wise choice by the two
parties of labor and management should be aimed at. However, this combination is
extremely difficult to achieve.
One basic alternative to achieve this combination is to bring CSR movement into the
obit of legal management of labor, which is backed up not only by international laws,
but also by domestic laws. That is to say, CSR takes international labor standard as its
basis and principle and the immediate requirement of CSR is to carry out and
implement the Law of Labor. For this purpose, the following issues need to be defined
and solved:
First of all, workers’ basic rights as stated in the stipulations of ILO conventions
should have the priority to be solved for CSR movement. Among these basic labor
rights, the most important are the rights of organizing trade unions and collective
bargaining. The most immediate significance of these two rights lies in the fact that
workers must establish a collective force and have reciprocal negotiations with
employers with an independent status. 31 The other rights like workers wages,
working hours and labor protection are important for workers. However the
realization of these rights cannot depend only on unilateral decision by the company,
but should have the involvement of workers. And the basic conditions for workers’
involvement is that there has to be a real workers’ organization in existence. The
promotion of CSR must satisfy this basic right for workers. However, in the present
CSR movement, it happens that these two rights are neglected. Though many
international standards on social responsibility and factory rules acknowledge the
See Chang Kai: “Modern Corporate System and Relationship between Labor and Right”, Research of Labor
Movement, Issue 13, 1994.
31
12
rights of freedom of association and collective bargaining, in reality, many enterprises
that have been certified for their social responsibility still have no trade unions
established. Those few enterprises that have their trade unions established are in fact
under the control of their employers or simply have the management of the enterprises
to be the chief representatives of the trade unions. This type of intervention by the
employers from establishing trade unions or control over trade unions is the typical
kind of inappropriate and unfair labor measures clearly forbidden in the International
Labor Convention No 98.32
Secondly, as to the certification method for enforcement and supervision of CSR,
measures are required to change the simple business operation mode. It should be
admitted that inspections and certification organizations on labor standards in the
world have played positive roles in the process of CSR promotion. However, the
business operation of this certification process also sees the rise of some problems in
terms of the objectivity and accuracy of the supervision and certification. For
standards of quality or environmental management systems, it is possible to have
them objectively measured by some static and quantitative parameters. However,
labor standards, as a right to achieve, have their relativity and mobility. Different
people may have different feelings and assessment, i.e. the subjectivity of the rights.
If this certification process is controlled entirely by one party of interest, which means
employers are to provide all the materials and evidence and witnesses, it will become
difficult to ensure the impartialness and objectivity of the result. In the case where the
act of supervision and certification organization is clearly clouded with business
purposes, and the supervision and control over the certification is taken as a business
to do, then, it is very doubtful of the fairness and objectivity of the certification
method.33 What is more, the staff members in some notary institutions responsible for
certification are not professionals in labor relation or labor law; the certification of
their professional qualification is yet anther issue to be considered.
Also, the situation needs to be changed that supervisory certification bodies are of
unilateral act by employers. For the restructure of supervisory certification process,
the basic thought is to take advantage of three-party mechanism to enforce the CSR.
According to the legal stipulation on labor in China, the supervisory and examination
See Article 2, “Convention on Enforcement of Right of Organization and Collective Bargaining Principles,
edited by Beijing Bureau of ILO, ILO Conventions and Proposals (Volume 1), 1994 edition, p 164.
33 The author once got to know some enterprises that have been approved for the certification. Through
communication with the responsible persons in the CSR departments of these enterprises, to the author’s
surprise, before they become clear about what are social responsibilities or labor standards, their enterprises
have passed the certification of labor standards.
32
13
right on the enforcement of labor disciplines by enterprises is with the government
and trade union organizations. It states in the Law of Labor: “The labor
administrations of the people’s government at county level or above should be liable
to supervision and inspection in accordance with law on the observation of labor law
and regulations by the employers and have the right to stop and order to correct any
violation of labor laws and regulations.”34 “Trade union organizations at different
levels should maintain in accordance with law the legitimate rights and interests of the
workers and supervise on the observance of labor laws and regulations by employers”.
The three-party mechanism is the basic principle for the legal adjustment methods of
labor-management relations by ILO. This kind of legal adjustment involves
“employment arrangement, staff training, workers protection, industrial health and
safety, productivity, social security and welfare causes and so on;” “it also involves
the draft and implementation of the laws concerning their interests.”35 Only by joint
enforcement by the three parties, can the objectivity and impartialness be ensured for
the supervision of the certification process.
Thirdly, it concerns with the legal effectiveness of the issue of CSR standards. The
question of legal effectiveness of CSR standards includes two aspects of the issue.
One is the legal effectiveness in the formulation of the CSR standards. So far, there is
yet no standard universally accepted throughout the world. Most of the standards are
made by different international organizations. Though these standards are formulated
based on the international labor standards, there is still gap between the ILO standards
and the labor law in our country. So, there is the problem of legal applicability or
standard applicability. The solution to this problem means the formulation of CSR
standards for China. And there has to be the participation from the relevant Chinese
department so as to have legal effectiveness. The second one is the legal effectiveness
of the result of the supervision and certification of CSR. There is a clear definition on
the principal of the right of supervision and inspection on the implementation of labor
law in the Chinese relevant laws. Generally speaking, without participation of these
departments, the result of the certification will hold no legal effectiveness. At present,
the CSR is mainly of business nature, therefore, it holds no legal effectiveness.
Though what the enterprises that have been certified look for is simply a business
value rather than the legal effectiveness, the act itself has already deviated from the
original idea of CSR movement. Still, there is another issue, which cannot be avoided,
34
35
Articles 85 and 88, Chapter 11, The Law of the People’s Republic of China on Labor.
ILO: Article 5, Class 1 Coordination and Cooperative Agreement between Public Agencies, Employers
Organizations and Workers Organizations in Industrial sectors and the State （No. 113）（1960）.
14
i.e. if an enterprise has been certified by a business certification institution, but not
approved by a governmental labor department or body or trade unions, will this
business certification still effective? Therefore, as far as certification is concerned, it
is not enough to simply to pass the certification by a business organization.
Cooperation has to be sought after with government and trade unions. Also, with
reference to international practice, the involvement of an expert on labor relations and
labor laws in a capacity of public welfare representative will ensure the
professionalism and objectivity of this certification.
36
Author: Chang Kai PhD of Labor Law
Professor and tutor of doctorate students
Institute of Workforce, the People’s University of China
Email:[email protected]
36
见[日]沼田稻次郎等編集《勞動法事典》
，勞動旬報社 1979 年 12 月日文版，第 1082 页。
15