Caterpillar Company Business - Case Study Example

Addresser’s Name Addresser’s Position Company Caterpillar Address City-Code/Zip April 05, 2012 Addressee’s Name Executive of the Local Network U1987 PO Box Bentley 6004 Dear Executive of the Local Network It is of utmost importance for governments to take responsibility for human rights, which is the first Global Compact Principle. However, it is individuals and organizations that put government and global directives on human rights into practice. One of the ways for organizations to champion and protect human rights is by upholding the elimination of any discrimination with regard to occupation and employment, i.e. the sixth Global Compact Principle (UN Global Compact, 2009; 2010). In this paper, on behalf of my Company (Caterpillar), I will look at the ways in which business organizations can uphold and protect human rights, including eliminating employment and occupation-associated discrimination. In this effort, I will give examples of some of the practices that have been adopted by some business organizations in their efforts to improve their compliance with the two principles, and how these practices have failed or succeeded. From this, I will present recommendations on how these efforts can be best achieved. A. Principle 1 dictates: “Businesses should support and respect the protection of internationally proclaimed human rights” (UN Global Compact,2009; 2010). A number of companies have adopted certain practices in line with these factors in their efforts to improve. Let us take the example of Royal Dutch Shell. Shell has been credited for being the first petrochemical company to adopt policies for human rights within their Global Business Principles in 1997 (Human Rights Library, n.d.). As a result of criticism against its activities in the Niger Delta, Nigeria, Shell initiated talks with different stakeholder groups. As part of its new Global Business Principles, the company undertook a social audit in which it reviewed issues of human rights associated with its activities. Equally, through its website, Shell initiated direct interaction with all its stakeholders, including the members of communities in which it operates to boost its objectives towards human rights (Pyagbara, 2010). But notably, despite such a formal step, Shell still continued to overlook fundamental human rights issues of the Ogoni community around the Niger Delta, Nigeria. For instance, on the case of Goi oil spill in Ogoni in 2004 Shell refused to accept and take responsibility. Even though the spill remained unremoved for three months, actually taking the intervention of visiting EU ambassadors, Shell claimed the accusations directed at it were evidence of a brewing sabotage (Pyagbara, 2010). In the end, Shell polluted the Ogoni water bodies and land, thereby jeopardizing the people’s economy and health. But this is only one such an example. And clearly, despite claiming to engage with all stakeholders, such cases expose Shell’s reluctance to risk its primary business goals for the sake of human rights. 1. Lessons Learnt Shell’s policy provides a good framework for human rights protection- if implemented. The strategy to engage all stakeholders is a good one as it is a great source of information, which then help the provision of solutions and even the creation of better policies. But Policies mean nothing without an effective framework for its implementation. Shell’s policy only seems to be mere words, with little action to accompany it. Although the Shell website seemed to provide a platform for exchange, Shell did not seem to use the feedbacks for any decision making. As it were, many organizations do not stick to their commitments. On the same basis, in 2000, a Shell-Ogoni conflict derailed the construction of a Shell-sponsored road in K-Dere village with the community members who complained there had been little consultation (Ereba & Dumpy, 2010). 2. Recommendations To improve Shell’s compliance with human rights, Shell and other companies can adopt a number of strategies: i. Introduce and apply effective methodologies for the assessment of environmental and social impact. This involves respecting open dialogue principles and community consent, and establishing independent mechanism for effective grievance monitoring. All these aim at approaching and treating the local communities as real partners and evading conflicts by not working in areas where there is real opposition ii. Establishing a culture of continuous staff training on human rights, community relations and conflict management This should run co-currently with the relocation or removal of staff members who are not able to cope or not willing to change. In order to improve the process of training and retaining, an organization could revisit old recommendations of external stakeholders and implementing those that are still relevant. iii. Transform programmes for community development through inclusive, participatory and empowering strategies. Rather than using community projects as tactics for appeasing and extending patronage to violent groups or elites, organization should take a fully consultative approach to such projects that includes the whole community. A company should address the exclusion of minority groups, e.g. women, so the whole community becomes fully representative. Also, the organization should be able to identify, and support initiatives that offer prospects for the community’s economic improvement and sustainable livelihoods. B. Principle 6: “The elimination of discrimination in respect of employment and occupation” (UN Global Compact, 2009) In order to comply with this requirement, organizations employ different strategies, both within the company or in the community within which it operates. These practices include: establishing policies that emphasize on merit for recruitment, training, placement and equal opportunities for advancements; have an effective mechanism for addressing arising grievances, handling appeals and providing recourse (UN Global Compact, 2009). But simply putting these policies in place may not be adequate. They should be accompanied by a comprehensive Discrimination reporting mechanism. One of the very accessible ways for doing this is through the company’s formal system of reporting (UN Global Compact, 2009). Unfortunately, some companies do not have such a reporting system, prompting cases to be forwarded to the Equal Employment Opportunity Commission (EEOC). However, although this is a good platform, it exposes a company’s problem to the public. Most of the time, it is important to handle small cases within the company so it does not expose its weaknesses/challenges to its competitors. Equally significant are the risks involved when an employee reports a case of discrimination against his employer, especially since the employee stands the possibility of losing his/her job. But even if he/she does not lose the job, the relationship with the accused employer is certainly destroyed. More than this, an employee may not have sufficient financial resources to manage the case. 1. Lessons Learnt One key lesson here is that permitting the reporting of discrimination does not necessarily guarantee one justice. On the contrary, one may lose more. As such, many employees would rather keep their problems to themselves than speak up and lose their jobs, or even much more. 2. Recommendations i. Transparency Forer (2011) cited a study that argued that transparency is one of the key methods to fight inequality. Suzanne Golderber (quoted in Forer, 2011) agrees: "More transparency almost always helps in fighting sex discrimination and other forms of discrimination because it exposes what the employer is doing." Transparency makes the hiring and promotion processes open, making it harder for discrimination to take place. Confirming this argument, Forer (2011) further cites a study by Institute for Women's Policy Research that shows the correlation between level of transparency and discrimination level. For instance, the gap of pay between men and women in the private sector, where employees are not allowed to discuss their pays was 23 percent, but only 11 percent in the federal government where transparency is allowed (Forer, 2011). With transparency, it is equally difficult for a complainant to be victimized. C. Conclusion Of course these recommendations are in no way exhaustive. There still are many other ways to help improve compliance to the first and sixth Global Compact Principles. However, this paper provides a good framework on which other important policies can be based. Signature Addresser’s Name Addresser’s Position Bibliography Human Rights Library. Global Business Responsibility Resource Center: Human Rights. University of Minnesota. http://www1.umn.edu/humanrts/links/gbrhumanrts.html Legborsi Saro Pyagbara, Shell’s Social License to Operate: A Case Study of Ogoni in The Ecumenical Council for Corporate Responsibility, Shell in the Niger Delta: A Framework for Change, 2010. Patrick B. Ereba and Boniface B. Dumpe, Shell’s Poor Stakeholder Engagement in The Ecumenical Council for Corporate Responsibility, Shell in the Niger Delta: A Framework for Change, 2010. United Nations Global Compact. Global Compact Principle One, 2010. http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle1.html United Nations Global Compact. Global Compact Principle Six, 2009. http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle6.html Ben Forer. Workplace Discrimination: Transparency Key in Fight for Equality, June 21, 2011. http://abcnews.go.com/Business/workplace-discrimination-transparency-key-fight-equality/story?id=13892888#.T34k7zKddBQ, Read More