I’m fascinated by the apparent inconsistency between attitudes in the corporate sector to different social issues. For example, why is it that most companies still argue that – give or take the most ‘abusive’ arrangements – the standard against which they should be tested on tax avoidance is the bare legal minimum, while in areas such as ‘sweatshop’ labour most concede that the legal minimum is not enough?
With this in mind, I was intrigued by a column in today’s FT by Michael Woodford, the former Olympus Chief Executive turned whistleblower. Woodford describes how a number of companies have been changing the way they do business to prevent prisons in the US from obtaining drugs that can be used for capital punishment.
He agues that:
The unprecedented action by the pharmaceutical industry over the past two years has dramatically changed the landscape of capital punishment in the US. For the first time in 30 years, prisons have had to change their protocols not once but many times. Executions have had to be put on hold, and prisons across the country are rapidly running out of available lethal-injection drugs.
From there it’s just a hop, a skip and a jump to a fascinating page on the Reprieve website giving a number of companies’ statements detailing the impressive actions they’ve taken to keep their drugs away from state penitentiaries practising capital punishment.
These statements raise interesting questions for corporate responsibility sceptics. For example, many of these companies’ actions might easily be characterised as a business, not an ethical, decision: banning this use of its drugs will have a negligible impact on a company’s bottom line, far outweighed by the public relations gain. While that’s true and perfectly in keeping with the way corporate responsibility works, some of the companies seem to have incurred greater costs than just the immediate loss of custom. Lundbeck and Fresenius Kabi, for example, have had to place more wide-reaching restrictions on their distribution chains.
A second sceptical argument is perhaps more convincing. The European Union now requires pharmaceutical companies to ensure that drugs they export will not be used for capital punishment – so perhaps these companies are just anticipating the implementation of the EU directive by national governments.
This is consistent with some of the companies’ statements. For example Hospira, which ceased producing one of its drugs altogether over this issue, states:
We cannot take the risk that we will be held liable by the Italian authorities if the product is diverted for use in capital punishment. Exposing our employees or facilities to liability is not a risk we are prepared to take.
Similarly, Fresenius Kabi clarifies that:
We are taking these steps in order to effectively prevent Propofol from being used for purposes other than its approved medical indications and, thus, from being restricted for export to the U.S.
Not all companies can be ascribed this motive, however. Indian company Kayem, which is not affected by the EU ban, has one of the most unusual corporate responsibility statements I’ve see:
We voluntarily declare that we as Indian Pharma Dealer who cherish the Ethos of Hinduism (A believer even in non-livings as the creation of God) refrain ourselves in selling this drug where the purpose is purely for Lethal Injection and its misuse.
It’s sometimes argued that the growth of businesses from emerging economies presents a challenge for corporate responsibility, because the absence of stringent legal obligations and public debate in many ethical areas allows them to undercut more accountable Western businesses. This example, at least, seems to refute that view.