By Joe Sibilia
Some people believe that the free flow of capital has greater value than human life. Others believe that human life is invaluable and cannot be quantified. I recently read a couple of very different books in an attempt to explore this paradox.
The first was John Ruggie's latest book Just Business – recently reviewed quite eloquently by CSRwire's Senior Editor Francesca Rheannon on this very column. The second is Adam LeBor's Tower of Basel, which was recommended to me as an interesting anecdote about a super secret club of bankers that rely on relationships instead of agreements to make money.
Just Business does a fine job of describing how a diverse group of stakeholders came together under the auspices of the United Nations, led by John Ruggie to establish a mutually agreed upon set of standards – voluntary of course – for human rights in the corporate world. The book provides a roadmap on how to bring together business, governments and non-governmental organizations in an effort to reach an agreement. Anyone interested in how to bring together a disparate group of parties should read this book.
In a recent conversation, while Ruggie couldn’t tell me whether he believed any monetary value could be placed on a human life, he did offer that he didn’t see any evidence that stock exchanges would take any action to 'delist' a company over human rights violations. Emphasizing that he didn’t see a pattern, Ruggie said he was not aware of any international banks that were taking an aggressive stand avoiding business with human rights violators.
Instead, he saw benefit in the role of government to push for similar objectives, i.e., President Obama moving to lift the sanctions on Myanmar once the country agreed to comply with the United Nations Human Rights Standards. He also shared a 2008 study by Goldman Sachs often used by observers to argue that the external ‘costs’ and ‘risks’ associated with community feedback on human rights violations is a costly affair and should be avoided.
And an internal document that identified the risk of a $2.5 billion cost for an oil and gas company accused of human rights violations. Finally, he shared a study outlining the Costs of conflict with local communities in the extractive industry, yet another fascinating read.
All of these point to similar observations: the costs are high. The public relations repercussions are dangerous. But the profit is so great that glazing over the violations emerges as the best approach every single time. I almost couldn’t believe it.
Until I started reading Adam LeBor’s book.
The Tower of Basel does a fine job describing how a small group of bankers got together to form the Bank for International Settlements (BIS) under the guise of insuring that capital among federal reserves would continue to flow regardless of the political or societal considerations. The context: a small group of bankers meet every month to profit from the flow of money without any other regard but profit reasoning that the world needed a bank of last resort that could settle transactions with a pedigree of mutual consent.
“The mission of the Bank for International Settlements (BIS) is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.”
The book is a history of the establishment of one of the most secretive banks in the world. Any history or finance student or entrepreneur would enjoy this behind-the-curtain view of modern elite banking.
The two books outline very different approaches to organizing an enterprise for humanity while sharing a common belief that they were providing a much-needed public service – one to protect human rights while the other to protect capital rights.
Tower of Basel also spends a considerable amount of time exploring the relationship between the bank and the Nazis. Especially telling was commentary on the profits from the gold extracted from the teeth of prisoners at Auschwitz and the profits from the businesses at Auschwitz that priced how long a prisoner would live as well as the costs of replacing him. If it weren’t true, it would be horrifying.
We can't put a price on humanity.
It's priceless and it's the purest thing we have in common. We are all humans. Business has a role to play in civil society operating under the authority of the United Nations Guiding Principles on Business and Human Rights – and John Ruggie’s legacy as a founder of the United Nations Global Compact and the Guiding Principles will be far different than the legacy left behind by the founders of the BIS.
Let’s hope we have more Ruggies out there.