State Secretary Leiv Lunde

“A quest for best practices in the era of globalization: The Norwegian experience”

International Symposium on Human Rights and Business Ethics, Bangkok October 24, 1998 (Check against delivery)

In a quest for best practices, it is also important to focus on relevant and timely practices. So today I am not going to give you an overview of the rules, regulations and practices which govern the Norwegian economy. Our sets of labour standards, environmental controls and various social clauses are in many cases quite specific to the Norwegian experience of a mixed economy with an extensive public sector and comprehensive set of regulations within the framework of a modern market economy. Our economy, our history, our climate and our geography are obviously very different from yours.

These are lessons and challenges that also apply generally. One of them concerns the need for having fully functional and functioning trade unions. The possibility of achieving lasting and fair agreements in the labour market is crucial to the development of a stable and forward-looking economy. I say this despite the fact that my government is currently facing strong opposition from our trade union movement to the budget we have presented to the parliament. A recent two-hour general political strike does not detract from our view that a partnership between employers and employed, like that between the government and the governed, must be based not only on mutual respect, but on an acceptable level of involvement from both sides. Such involvement requires resources and an opportunity to become organised if it is to be truly representative.

Our economy is not just a mixed one, with the Government being by far the largest employer, it is also a very open one. More than half of our GDP stems from foreign trade. This is the field of best practice that I would like to emphasize today, which concerns human rights considerations in Norwegian economic involvement abroad.

Despite the fact that Norway has been trading with other countries for centuries, and that violations of human rights by many countries of the world are nothing new, how business relates to human rights is a burning issue at home.

There are several reasons for this.

Norwegian companies are now involved more than ever before, and further afield than ever before, in setting up new businesses, in investment and in co-ownership. This involves more contact with the authorities, organizations and employees in the countries where the companies are involved, and - as more and more people are beginning to maintain - a greater share of the responsibility for developments there.

Greater attention is generally being paid to the human rights situation in different countries. Previously, governments that were subjected to criticism contended that treatment of their own citizens belonged to the sphere of internal affairs, and was thus not subject to foreign interference. Today there is a growing international recognition of the view that human rights are universal and that everyone has a responsibility to call attention to violations of these rights, wherever they might occur.

Another aspect is the high expectations we have of Norwegian business and industry beyond earning money. Norwegian companies are - also in Norway - expected to show awareness of their social responsibility in such matters as environmental issues, regional development and the health of their employees. This is entrenched in Norwegian legislation and business practice. There are strict ethical requirements regarding business conduct and one’s responsibility as a member of society. Public opinion now places high demands on the conduct of Norwegian companies in other countries.

It is a worldwide trend that the consumer is becoming increasingly aware of ethical issues in business. When the world’s largest football tournament - Norway Cup - discovered some years ago that many of the footballs provided for the tournament were sown by children who were deprived of the opportunity to go to school, they reacted immediately. This emerging consciousness now extends far beyond the 25,000 children who participate in the football tournament once a year. I hasten to add that teams from Bangkok have often come out on top in this tournament.

It seems to be more important than ever for companies to establish a corporate image as environmentally friendly, ethically aware, concerned for the health and welfare of their employees, and as patrons of the arts and supporters of culture and sport. A company with an image like this cannot afford to be exposed to its customers as a company that uses child labour or contributes to the power base of a government that commits gross human rights violations.

Human rights have, in short, moved closer to the bottom line for the companies. Not only are investors increasingly looking for “clean” companies. The fact that a government’s respect for human rights contributes to the openness and stability of its market is increasingly translated into commercial advantages for domestic and international business. There is also the realization that low labour costs do not, in the long run, compensate for the fact that cleaner, safer and fairer workplaces result in better products.

More and more business leaders now acknowledge their own responsibility for assessing the human rights implications of their presence in other countries and regions. Many companies have chosen to draw up their own ethical guidelines for their international operations to assist their employees and contribute to increased awareness among decision-makers of the problems they must expect to face. Ethical guidelines also contribute to the company’s image.

The Confederation of Norwegian Business and Industry has been actively involved in the efforts to promote ethical issues in connection with the international operations of Norwegian companies. The Confederation has cooperated with Norwegian non-governmental human rights organizations in publishing a check-list in order to enable their member companies to update their own business policies. Individual companies have also worked with human rights organizations to provide courses for their employees or encourage discussion within the company. The Norwegian Confederation of Trade Unions has also contributed significantly to raising the awareness of the interface between business and ethics in Norway as well as abroad.

The Norwegian Government wishes to promote awareness of human rights issues, and to provide a forum for the exchange of views and information between the business sector, human rights organizations, research institutions and government. We have therefore established the Consultative Body for Human Rights and Norwegian Economic Involvement Abroad, known as KOMpakt. Its main purpose is to enhance understanding among the relevant Norwegian constituencies for the interface between business and ethics in the context of globalization. Members include 1) representatives of Norwegian business and trade organizations, 2) Norwegian trade unions, 3) a number of non-governmental human rights organizations, 4) research institutions, and 5) government departments and institutions. A number of major companies also participate in KOMpakt proceedings.

I have with me a leaflet which explains the background and structure of KOMpakt, which I hope will provide some insight into how we work. An important underlying aspect here is to be aware of the roles each participant in this discussion plays. Whether or not to invest or trade with a specific country or company is a business decision, made by company executives. The Government may give advice, or even apply the law in the case of Security Council resolutions, but usually we offer information and knowledge - and no more. Companies are not governments. Nor are they human rights organizations. Non-governmental organizations must - and do - act as the human rights conscience that puts pressure on companies as well as on governments. We have different roles to play, and the aim of KOMpakt is not to agree, but to gain more insight into each other's agendas and views. This is the best practice that I can offer you; such a dialogue can lead to new ways of doing business, new ways of furthering respect for human rights, and ultimately new prospects for our own and other communities.

In light of the many representatives of Thai business and industry present here today, I would like to offer a suggestion for best practice from your perspective as well. I have not come to present commercials for Norwegian companies, but I would like to present the case of the Norwegian state oil company, STATOIL.

• Not because it is state-owned, since it is obliged to operate commercially in every respect
• Not because it is an oil company, although we know that these companies (Shell in Nigeria) have been particular targets for human rights activists - not least because of the incredible wealth they represent for themselves and the country they operate in.
• Not because STATOIL has a human rights policy enshrined in its business policies.
• but because STATOIL is quietly doing what many companies present as ideas or targets or general policy without thoroughly implementing them.

When STATOIL sends out a questionnaire to all employees about their level of satisfaction with the company, the issue of respect for human rights is included. STATOIL is currently in the process of giving all employees a course in observance of human rights. STATOIL has entered into an agreement with the international trade union in order to achieve the best possible standards for its workers' interests globally. Even under circumstances where STATOIL is not responsible for the majority of the operations, it has quietly insisted on certain standards being met - such as implementing a ban on all flaring of gas in its Angola operations.

You will not find this STATOIL policy presented in a glossy brochure - I wish it was, so that STATOIL could share its policy more with others. Instead it has given priority to quiet implementation of this policy.

Let me in conclusion also offer a best practice from our own experience as regards the role of non-governmental organizations. We have many human rights NGOs in Norway - including Amnesty International, which is sitting on the panel here next to me. On the government side, we have recognized the need to support NGOs and offer conditions in which they can increase their competence and capacity. Today, this has proved to be a benefit for business and government alike. The NGOs have become a great resource of expertise as well as a voice of conscience.

The NGOs have also recognized the need to work more closely together in order to provide their input to business and to government in an efficient manner. An NGO forum of human rights organizations has been formed for this purpose. Furthermore, there is extensive - and much needed - cooperation between human rights NGOs, environmental NGOs and solidarity NGOs that typically focus on a particular country or regional situation.

The lesson is as always: we can - and must - learn from each other. This is the Norwegian experience, and as I sit here today, it is also the Norwegian-Thai experience. I appreciate the opportunity to join you today and to learn more about your thinking, your priorities and your outlook for the future.

Thank you.