Modern Business in Modern Society

Excellencies,
Ladies and Gentlemen,

The financial crisis that arose in the US in 2008 quickly developed into a global economic crisis that revealed fundamental weaknesses in the existing global economic and financial order.

The crisis hit Europe harder than most. In fact, Europe may well suffer sluggish growth for years to come.

So, one might ask, is this the time to engage more deeply in social dialogue; negotiate wages, work tariffs and labour standards?

After all, this is a time when:
• companies are struggling to survive, and all spare capital is being channelled into transformation and innovation;
• workplaces are closing down almost daily, and workers are in danger of dismissal and redundancy; and
• external competition is increasingly getting stronger in traditional European export markets.

In order to provide a sensible answer to such complex questions, I shall try to explain why the decent work agenda is important; why decent work may in itself provide part of the solution.

Moreover, mainstreaming the decent work agenda may provide a cushioning effect for society at large when economic times are rough.

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Let me begin with the key aspects of the decent work agenda, and then look at why decent work also makes good business sense. The latter point is summarised by the International Labour Organisation’s statement that: “Poverty anywhere constitutes a danger to prosperity everywhere.”

ILO highlights various key aspects and concerns:
• the multidimensional nature of decent work;
• concern for all workers and for the improvement of conditions for the most vulnerable;
• concern for the living conditions of workers and their families;
• gender as a cross-cutting concern; and
• the social and economic context for decent work and sustainable enterprises.

At the same time business needs favourable framework conditions and a level playing field in order to prosper and grow.

Can the decent work agenda offer favourable conditions?

Profitable companies have always made important contributions to society: 
• by creating jobs, growth and prosperity;
• by financing much of the modern welfare state; and
• by making crucial contributions to technological breakthroughs and innovation.

The Norwegian Government encourages Norwegian companies to give increased voluntary consideration to the ethical aspects of their business and the environment.

• In January 2010, the Government presented a report on CSR to the Norwegian Parliament. Decent work is an integral part of the government’s CSR policy.

When I say, “decent work is an integral part of CSR,” my definition of decent work also covers the wider societal aspects of the concept. These include social security, labour rights, job opportunities for all, gender equality and equal pay.

Decent work includes policy initiatives such as general access to pre-school facilities and child healthcare, health insurance, unemployment benefit schemes, and so on.

Gender equality has to be balanced with the need for a high reproduction rate in order to enable society to pay for an ageing population in the not-too-distant future. 

Individual freedom implies that women must not be forced to make an “either-or” choice, but must be allowed both to pursue a career and to have children. Practical arrangements to ensure such freedom of choice must form part of the social dialogue.

This is an example of an area in which we need employers and trade unions to work together to establish how these key aspects of the decent work agenda can be made part of responsible corporate behaviour.

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In 2008 we established a national seven-point strategy on how to coordinate and strengthen our commitment to workers’ rights abroad and to avoid social dumping at home.

Support to ILO’s global work was made part of our foreign and development policies. Decent work and environmental considerations were integrated in bilateral trade agreements and stand at the heart of our industrial policy and state ownership practices.

There are very practical reasons for our commitment. At the end of the day, social responsibility is itself a key condition for company growth and a bulwark against external shocks to the national economy.

In effect,
• gender equality, the environment and worker’s rights strengthen the corporate sense of common purpose; and
• creativity, knowledge, open-mindedness and inclusion constitute a catalyst for greater innovation and increased growth.

In other words, being good at CSR and decent work can create a win-win situation for employees, shareholders and the society at large.

Let me make it clear that when I speak of the society, I also think of the international society.

As smaller nations, Norway and Slovakia both know that small countries with open economies depend heavily on global cooperation.

If all adhere to and apply the same standards, we create a level playing field and business opportunities for those who want to be at the forefront of the global CSR effort.

The next round of EEA grants is highly relevant to the future of bilateral Slovak-Norwegian relations, and a case in point in the context of social responsibility and decent work.

Norway wants to use the financial mechanisms to establish partnerships that stimulate green growth through technological innovations and the application of best practice standards to the organisation of working life.

What we are talking about here today is facilitating modern business activities in modern societies. Norway and Slovakia are about to conclude a Memorandum of Understanding on this very topic.

Governments need to be good role models.

As owner in many large Norwegian enterprises, the Government communicates its expectations clearly to the company boards. Norway’s State Ownership Policy formulates a clear set of values and ethical guidelines.

Many companies have seen the business opportunities and are hurrying to the frontline of social responsibility.

“Doing well by doing good” is more than a rule of conduct; it is a sound business proposition.

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Seventy-five years ago, the Norwegian Confederation of Trade Unions and the Confederation of Norwegian Enterprise agreed a dispute settlement mechanism that continues to serve Norway well.

The introduction of this “Basic Agreement” announced the end of unmanageable labour disputes and introduced a culture of dispute settlement.

It did not mark the end of legitimate conflicts of interest. Conflict of interest is a healthy aspect of working life. Countries which do not accept such differences do not have the democratic qualities that we embrace.

The crucial idea is to have a robust framework for tripartite social dialogue within which to formulate and channel interests.

Ultimately, in modern national and international society, if handled in a responsible manner, there does not have to be a clash of interests between a multinational corporation’s commercial objectives and citizens’ welfare.

That is what the decent work agenda is about. That is what responsible behaviour is about.

Small steps may have great significance:
• Parent companies and major contractors have legal and moral responsibilities, including in relation to the supply chain. As they act on their responsibility a strong signal is sent down the supply chain.
• We encourage Norwegian companies to raise issues when in a dialogue with authorities. If there are human and labour rights issues in a host country, companies should build relations with civil society in order to build a balanced basis for information and contact.
• If there is limited freedom of speech, companies could seek to support a diverse media landscape, for instance by advertising in the independent, or even opposition, as well as official media.
• Transfer of knowledge and provision of neutral information to independent labour organisations could be particularly relevant.

More than ever before, companies need to acknowledge the importance of being a responsible corporate citizen as a means of protecting and building shareholder value.

We have dedicated a full day of the state visit to CSR and decent work. This testifies to the priority our two governments are giving to green growth and ethical and rights-based corporate behaviour.

If we are to succeed in tackling the major global challenges of today, we must make sure that businesses are able to take on these challenges in the right way.

Today’s conference is the starting point for a partnership focused on how to establish and conduct modern business in modern society, of which I am proud to be part.

Thank you.