Journalists expose social responsibility gaps

Journalists have an important role in disseminating and monitoring the results of research carried out by organisations. With commercial operations in so-called risk countries there is a greater than usual danger that observance of human rights and working conditions will be shirked. Companies operating in such countries should know the risks and prepare for them. It’s the job of journalists to ask companies questions that reveal whether or not they are doing so.

Three cases show that at least in these instances journalists performed their work well.

Case 1

Pineapple juice at the expense of human rights

The Finnish organisation Finnwatch, which studies corporate responsibility, revealed in 2013 that the company Natural Fruit, which operates in Thailand producing pineapple concentrate, trampled on human rights in many ways.

According to the Finnwatch report (https://www.finnwatch.org/fi/uutiset/80-serious-human-rights-violations-behind-european-food-brands), factory workers’ wages were mostly below the local minimum. They were made to do up to 5 – 10 hours overtime a day. And the majority of factory workers were undocumented migrants, among them children.

According to interviews with the workers, the company confiscated migrants’ passports and work permits to prevent them from quitting. The report also found shortcomings in workers’ occupational safety.

At the time, the juice concentrate manufactured by the company was used in Finland in Pirkka, Rainbow, and Eldorado products. Finnish grocery stores SOK, Kesko and their juice producer VIP-Juicemaker procured pineapple juice concentrate from the Natural Fruit factory.

Surprise exposé altered practices

Finnwatch’s investigation brought to light the links between Finnish grocery stores and the international use of cheap labour. A familiar product on the consumer’s breakfast table became an example of what the failure of companies’ social responsibility amounts to. It also showed the unscrupulousness of cheap manufacturing: a product’s low price for the buyer often involves major sacrifices on the part of those who make it.

When the case was publicised SOK and Kesko acknowledged (linkki tiedotteisiin????) the need to improve the supervision of production chains. The stores and their juice producer VIP-Juicemaker ceased collaborating with Natural Fruit and imposed new requirements on subcontractors. But Finnwatch’s 2014 follow-up report revealed that their new supplier, Vita Food Factory, was guilty of even more serious offenses.

The pineapple juice case was reported on extensively in the Finnish media following Finnwatch’s investigation. Internationally, journalists were interested in the matter too, most recently when Natural Fruit brought legal proceedings against the interviewer in the Finnwatch report, researcher Andy Hall, from the UK. The company accused Hall of libel. Following a lengthy legal battle the case against Hall was dismissed.

Sources

Finnwatch.

YLE.

Finnwatch.

Finnwatch.

 

Case 2

History’s biggest tax haven leak

In 2015, the German newspaper Süddeutsche Zeitung received anonymously 11.5-million documents originating from the Panamanian law firm Mossack Fonseca. In electronic form, the leak amounted to 2,600 gigabytes.

Süddeutsche Zeitung shared the documents with the International Consortium of Investigative Journalists. Some 400 journalists from all over the world and various media collaborated on examining the Panama papers.

The documents include emails, bank details, judicial rulings and government statements between the law firm and its clients over a nearly 40-year period. They contained information on more than 200 000 tax haven corporations and foundations.

The Panama Papers are the biggest data leak ever.

Activities finally become transparent

The Panama Papers revealed to the general public how companies circumvent their financial social responsibility. The law does not prohibit tax planning, but aggressive tax planning is often dubious and is waged against the principles of corporate responsibility. The Panama Papers still impact on the reputation of companies that feature in the documents. In some cases, the leak has resulted in criminal investigations and possible convictions.

The Panama Papers revealed the links between different countries’ politicians and their compatriots in tax havens. For example, close relatives of Russian President Vladimir Putin succeeded in transferring about two million dollars to their holdings through tax havens.

Apart from Putin, the documents mentioned the Prime Minister of Iceland Sigmundur Davíð Gunnlaugsson, who resigned as a result of the scandal, Argentinian President Mauricio Macri, and Libya’s former leader Muammar Gaddafi.

The documents also revealed the exploitation of Mossack Fonseca employees. For example, a secretary at the company Leticia Montoya was used as a front person or straw owner, which is characteristic of tax havens. Montoya was a director of tens of thousands companies in tax havens.

Montoya’s name was linked through documents, for example, to the corruption scandal involving the international football association, FIFA. Despite her numerous directorships, Montoya’s monthly salary in 2016 was €800.

The Panama Papers are proof that journalists’ research and collaboration decisively increases corporate social responsibility and transparency on the part of countries’ leaders.

Sources

https://panamapapers.icij.org/20161201-global-impact.html

https://panamapapers.icij.org/about.html

https://yle.fi/aihe/kategoria/mot/panama-paperit

https://yle.fi/aihe/artikkeli/2016/04/04/veroparatiisien-sisaanheittaja

https://yle.fi/aihe/artikkeli/2016/04/03/panama-paperit-paljastavat-vallanpitajien-veroparatiisiyhtiot

https://areena.yle.fi/1-3179044

https://areena.yle.fi/1-3179045

https://www.hs.fi/talous/art-2000002894628.html

 

 

Case 3

The company caught out over its empty promises

In 2012, the Finnish food company Fazer launched a campaign promising to donate five cents from the sale of each of its chocolate bars towards building schools in Côte d’Ivoire. At the same time, however, the company could not guarantee that child labour, a serious problem on West African cocoa plantations, was not used in the manufacture of its chocolate. Children are sold as workers and carry out heavy work without pay.

The matter involved one of Finland’s largest companies, a manufacturer of sweets, biscuits, and baked and cereal products. Fazer’s advertising campaign drew strong criticism, beginning with an article by the editor-in-chief of the magazine Ylioppilaslehti Vappu Kaarenoja titled Ihmisten aliarvioinnin Suomen ennätys (Finland’s record for underestimating people).

The article accused Fazer of hypocrisy. While the company was pledging to donate sales revenue to building schools, it advertised its campaign in the biggest Nordic daily, Helsingin Sanomat, on the cover of its Sunday edition. The ad cost about €50 000. The cost of building one school in Côte d’Ivoire cost just slightly more – about €70 000.

The story in Ylioppilaslehti challenged the company’s method of using African people to polish its image. The advertising drive was also criticised by Helsingin Sanomat and Voima magazine.

Nice words conceal ugly truth

Following the adverse press coverage, Fazer put out a statement promising to investigate responsibility for the supply chain and regretting its campaign. The statement said that for the company it was “important that all criteria of responsibility are met: the livelihood of the growers must be profitable, people must do well, and farming methods must be environmentally sustainable”. Fazer did not specify what definite measures it intended to take to achieve its objective. The press release was subsequently removed from Fazer’s website.

Since the controversy, Fazer has not properly checked his subcontractors and has not investigated the source of the cocoa it uses. Furthermore, Fazer fails to guarantee that its products are not made with cocoa produced using child labour.

Journalists revealed the gaps in social responsibility in Fazer’s case. A company’s promise of its good deeds is no guarantee of the ethical propriety of its actions.

An attempt is being made, for instance in the EU, to increase companies’ reporting obligations, as currently corporate responsibility is largely voluntary. Companies place their image in a favorable light and cover up negative behaviour. Insight and critical thinking on the part of journalists can expose major gaps in corporate social responsibility.

Sources

http://www.hs.fi/kotimaa/art-2000002562260.html

http://www.hs.fi/kulttuuri/art-2000002561975.html#

http://voima.fi/artikkeli/2012/nakokulma-fazer-tarjoaa-sokeroitua-karsimysta/