Corporate power: a looming threat to the fulfilment of women‘s human rights
|Corina Rodríguez Enríquez|
There are a number of reasons to believe that the 2030 Agenda and the Sustainable Development Goals (SDGs) are a step forward for the realization of women´s human rights. Not only are there several interrelated targets under the stand alone goal to achieve gender equality and empower all women and girls (SDG 5), there are also specific targets under 11 other goals that link women’s rights to the three dimensions of sustainable development (social, economic and environmental).
However, the SDGs do not explicitly recognize the links between women’s human rights, gender equality, and needed structural
reforms in global economic governance and policies. One of the dimensions of global economic dynamics that must be urgently addressed is the role of the private sector, in particular the limits to corporate power that need to be established.
The SDGs, by failing to include either a stand alone goal or specific targets in each of the goals on private sector regulation, reinforce the assumption that there are automatic positive synergies between private sector activities and development; and in a linear way of thinking, between development and women´s human rights fulfilment. However, there are threats posed by corporate power to the realization of women´s human rights, including in the following key dimensions, among many:
the negative impact of the drive towards competitiveness and rising productivity on women´s working conditions;
the impact of corporate lobbying and tax dodging in limiting public revenues as well as policy space;
the spread of the belief that corporations are (or may be) gender sensitive, and of the ambiguous discourse on corporate social responsibility.
Negative impact of the drive towards competitiveness
Feminist economics literature has contributed empirical analysis that questions the mainstream assumption that liberalization of the economy, with its pressure for competitiveness and rising productivity, will produce a levelling of wages across the world and will reduce poverty and inequality.
For example, in the 1980s, the development strategy implemented in many countries in Latin America (mostly Mexico and Central America) based on export-led manufacturing factories (known as ‘maquilas’), failed to reach the synergies they were supposed to, and instead they have proved to produce little improvement in employment, a limited contribution to economic growth and no gain in technology transfer to local productive systems. While the maquilas have opened economic opportunities for some women who otherwise would have none, these have been characterized by precarious working conditions and overall low wages. Also the strategy itself proved to be unsustainable, since much foreign investment allocated to the maquilas ended up migrating to other regions in the world (South Asia and China) once economic incentives (e.g., labour standards, labour force capacities, available infrastructure, tax breaks) in those places were more attractive. In brief, within this development strategy, women´s lower wages and poorer labor conditions worked as a major advantage for corporations.
While experiences and results vary among countries, economic structures, labour market characteristics and groups of women and men, the main conclusion is that the less negative experiences of this type of economic strategy (or the most successful ones) were those where the regulation of private sector investment was more robust and/ or was accompanied by public policies in the area of social services, social infrastructure and income maintenance policies.
Impact of corporate lobbying and tax dodging
Currently, the paradigm of public-private partnerships (PPPs) is being promoted not only at the national level but also by the UN development system as the best way to advance investment in areas of special relevance for women´s lives and human rights. As, for example, social infrastructure and social services. PPPs are promoted on the assumption that governments are unable or unwilling to invest in expanding access to basic public goods. It is believed that the private sector can introduce technology and innovation to make public service delivery more efficient.
This perspective is questionable from the point of view of the ability of PPPs to actually contribute to narrowing gender gaps and improving women´s lives. Most of the existing evaluations of PPPs are restricted to assessment of their efficiency and effectiveness in management, their capacity to transfer technology and knowledge, their contribution to financing the delivery of social services. The results of the assessments are not at all conclusive on these subjects. On the contrary, there is evidence of the negative effects of PPPs, especially in terms of the fiscal risks (overcharges and fiscal unsustainability)
that should be taken into account when analysing the net effects.
The promotion of the private sector as a rescuer of the public sector’s weak financing capacity hides the real root of the limitations of many governments in generating revenue. Corporations are in fact the most responsible for the lack of fiscal space for national governments, due to their tax evasion and avoidance. The failure of corporations to pay taxes in the countries where they operate is a major reason for governments´ lack of fiscal space to implement policies that would protect and promote women´s human rights.
The need of many governments to give favourable tax treatment to multinational companies as a way to attract foreign direct investment, together with corporate tax-dodging, implies that considerable public revenue is forgone. When a State does not mobilize sufficient resources, and has repeated budget shortfalls, it can only provide insufficient and low-quality services (e.g., in education, health, sanitation, public transport, social infrastructure, care services). When fiscal space is limited in this way, evidence shows that gender inequalities are perpetuated or even exacerbated, which in turn limits improvement in women´s lives and the narrowing of gender gaps.
Misleading discourse on corporate social responsibility
Corporations have also developed their own understanding of the positive relationship between women´s empowerment, gender equity and development. Their view can be seen at the least as a double standard, if not simply as hypocrisy. For one thing, corporate social responsibility initiatives designed to improve women´s lives are all too often rooted in the narrow belief that women´s economic empowerment amounts essentially to women´s entrepreneurship.
On the other hand, corporate social responsibility initiatives are not held accountable for their unwillingness to tackle the roots of inequality. For example, the UN Global Compact outlined the initiatives undertaken by multinational corporations to addressing poverty, including moves to equalize opportunities for women. However, many of the Global Compact signatories are often reluctant to pay a living wage to their employees or to eliminate tax evasion and tax avoidance practices.
In order for women´s human rights to be fulfilled, gender gaps to be closed, and SDG 5 to be achieved, the time has come for private corporations and governments to stop using symbolic policies and practices with limited impacts as a substitute for the real political and economic commitment that is needed to overcome the structural barriers to women´s and girls’ empowerment and gender equality.