Friday, July 07, 2006

Fair Trials for Business Campaign

Relevant to my slightly earlier post about Gary McKinnon is this -

A campaign has been set up by friends and ex-colleagues of three UK citizens, David Bermingham, Giles Darby and Gary Mulgrew (BDM - sometimes known as the NatWest 3) who currently face extradition to the US for a crime allegedly committed in the UK against their then UK employer, NatWest Bank. The Daily Telegraph is supporting the campaign to pressure the Government to change the Extradition treaty so British business people are tried in the UK for British offences.

"What we demand is an immediate halting of non-terrorist extraditions; the adoption of Article 7 of the European Convention on Extradition so the Government has proper power to veto questionable extradition applications and the reinstatement of the old Extradition Act until the US plays ball. Our campaign is already gathering pace and the Government must listen sooner rather than later. "

I wouldn't usually have much time for The Torygraph, but they have got it right this time - although why the luxury of justice should only be for business people and not (for instance) for Gary McKinnon I don't understand.

The Daily Telewag site warns:

'Please note! This website is not intended as a forum for anti-government or anti-American rhetoric or views and as such we do not welcome any e-mails, donations or help from those promoting such views. The campaign is apolitical and is solely concerned with the extradition of BDM and amending the new extradition act. Thank you'

So there! But another page does contain this intereseting commentary:

'Our Government would have us believe that the new arrangements with the US are both beneficial and not unusual. In fact both of these assertions are quite wrong. The US has bilateral extradition arrangements with 119 countries. The overwhelming majority of these (116) provide for the establishment of a prima facie case by the US, and every single one of these 116 is fully reciprocal. Approximately half of these arrangements further provide that "own nationals" need not be extradited. In only two cases other than the UK (France and Ireland) is there not a requirement on the US to provide prima facie evidence, and in each of these Treaties, the incorporation of either article 6 (France) or article 7 (Ireland) of the European Convention on Extradition provides ample protections for Irish or French citizens accused of crimes which would be justiciable in their country.

'In summary, therefore, even if the US were to ratify the new Treaty, which they realistically now have no incentive to do, our arrangements would place the rights of UK citizens below those of any other country in the world. Absent ratification by the US Senate Foreign Relations Committee, we cannot even avail ourselves of some of the supposed benefits of the new Treaty in extraditing people from the US. Is this really what the "special relationship" is meant to be about?'

The detail of this case is too complex to go into here - see Wikipedia entry to start learning more - but it is part of the Enron case and it is the view of many that, several US Enron defendants successfully plea-bargained their way out of trouble, the Natwest 3 are scapegoats for these other people. I think this places the case squarely in the orbit of CSR. How can we expect businesses to behave responsibly if governments and courts play politics with the law and with people's lives?

Free Gary McKinnon

This blog is intended to support British citizen Gary McKinnon, who is facing "fast track" extradition to the USA (after over four years since his initial arrest !).

Gary was indicted by a US court in November 2002, accused of "hacking" into over 90 US Military computer systems from here in the UK.

The unjust treatment of British citizens (and others) when facing the might of the US Military "justice" sysem, which practices detention without trial in Guantanamo Bay and elsewhere, and stands accused of making use of torture by allied regimes ("extraordinary rendition") is an ongoing scandal. It cannot be excused even by a "war on terror".

Is this CSR? You tell me, but I think that this is about organisations taking responsibility for their own shortcomings - in this case poor IT security - rather than blaming other people. Apart from the UK Government assenting to assymetric extradition arrangements with the US, which can still block extradition for 'political' (read terrorist) crimes. This was routinely used to stop IRA (Irish Republican Army) suspects that had escaped to the US facing trial in the UK.

Monday, June 26, 2006

PC users 'want greener machines'

Consumers are willing to pay up to an extra £108 ($197) for a PC containing fewer chemicals, a survey has found. People also feel manufacturers should take responsibility for the disposal of old machines, the research shows. The study by Ipsos-Mori for Greenpeace coincides with an announcement by PC maker Dell to phase out a number of toxic chemicals in its products.

So-called e-waste is a growing global problem, with 30 million PCs being dumped each year in the US alone. The nine-nation research found that UK computer users were willing to pay an extra £64 ($117), while people in China were prepared for spend up to £108 ($197) for a more environmentally sound PC. [Hmm. Who did they ask? I find it hard to believe. J]

News item from the BBC.

My own work on the future design of televisions highlighted some important points for TV technology, as well as PC displays and electronic equipment in general. Disposal of old cathode ray tube (CRT) displays will be a major problem for the waste industry - the glass used is lead-rich and must be treated as hazardous. It is not suitable for landfill since the lead can leach out into water supplies. The current LCD technology may not be much better, since cold cathode fluorescent lamps are used for backlighting. These contain very small amounts of mercury, but put a lot of scrap LCDs together and there is a potential for the release of significant quantities of mercury to the environment. In the future, the use of organic LED (OLED) displays should reduce the environmental impact. However, the proportion of plastic in TVs and displays will increase and it will be difficult to identify the variety of plastics used so that they can be re-used or re-cycled appropriately.

Follow these links for information on the European Waste Electrical and Electronic Equipment (WEEE) and the associated Restriction of Hazardous Substances (RoHS) Directives. These both apply to electronic equipment such as computers, TVs and displays.

Tuesday, June 13, 2006

Supply chain responsibility in the clothing industry

For fascinating insights into the global garment industry see Apparel Views. With a lot of news about technical and commercial developments there are by no means uncritical reports on corporate responsibility issues and supply chain responsibility in the sector. See Expert Opinion and particularly this article on Social Accountability Violations - on the rise around the world by Rajesh Chhabara, a Singapore based author and consultant on corporate social responsibility issues. He has authored the book ‘Social Accountability: A Practical Guide to Implement Code of Conduct’ and is director of CSRWorks Consulting, Singapore.

Friday, February 24, 2006

CSR, Google and philanthropy

Google hires another brilliant Larry

Not content with one exceptional executive called Larry, Google has hired another - Dr Larry Brilliant is to head up its philanthropic organisation. An award-winning expert in health and development, Dr Brilliant will oversee, the charitable arm of Google, which the firm's founders claim could one day have a greater impact on the world than the main company.

Dr Brilliant was appointed as executive director of on Wednesday and will work with the company's co-founders Larry Page and Sergey Brin to manage Google's charitable donations and philanthropic strategies.

Dr Brilliant is a physician, epidemiologist and a specialist in international health. He played a key role in the World Health Organisation campaign to eradicate smallpox and has also worked for the UN in the fields of blindness and polio eradication. is the umbrella term for Google's philanthropic efforts, which includes the work of the Google Foundation and some of Google's internal corporate philanthropy. The organisation focuses on several areas including global poverty, health, energy and the environment and has made over $7m (£4m) in investments and grants to date.

For the full article by Andrew Donoghue, see ZDNet UK.

Tuesday, February 21, 2006

Business leaders launch a blueprint for tomorrow's global sustainable business

By 2015 the world could have failed to combat poverty and be heading for environmental catastrophe, or it could be on track for sustainable development and a sustainable environment. What role does business have in deciding which scenario comes about?

The World Business Council for Sustainable Development (WBCSD) has marked its first ten years by looking at business’s role and its ability to contribute to a sustainable future. The WBSCD states that companies that contribute to tackling poverty, climate change and population shifts are those most likely to succeed.

In the paper 'From Challenge to Opportunity', the Tomorrow's Leaders' group, representing companies based in Europe, the Americas and Asia, sets out a manifesto for tomorrow's global business. The paper argues that 'we prosper by helping society to prosper'. It also states that 'we see shareholder value as a measure of how successfully we deliver value to society, rather than as an end in itself.'

The paper, which discusses four key areas of business and sustainable development, including poverty, the environment, population and globalization, adds that large-scale business action on these issues needs to be profitable to be effective.

'Our major contribution to society will come through our core business, rather than through our philanthropic programs. If action to address such issues is to be substantial and sustainable, it must also be profitable'.

The Tomorrow's Leaders Group:

- Frank Dassler, General Counsel and Head of the Global Legal Department, Adidas-Salomon
- John Manzoni, Chief Executive, Refining & Marketing, BP
- Andrew Brandler, CEO, CLP
- Julio Moura, Chairman and CEO, GrupoNueva
- Paul Polman, former Group President, Western Europe, Procter & Gamble
- Idar Kreutzer, CEO, Storebrand
- Christian Mumenthaler, Chief Risk Officer and Member of the Executive Board, Swiss Re
- Peter Bakker, CEO, TNT

From Challenge to Opportunity: The Role of Business in Tomorrow’s Society (1 MB pdf)

Catalyzing Change: A Short History of the WBCSD (3.3 MB pdf)

Wednesday, January 18, 2006

Bye Bye OFR Hello Business Review

Within the first few days of the New Year it became increasingly clear that, despite the UK government's decision to drop the mandatory requirement for listed companies to produce an OFR, the subject matter is refusing to go away. Friends of the Earth have launched judicial review proceedings against the Chancellor of the Exchequer Gordon Brown and the Secretary of State for Trade and Industry Alan Johnson. The organisation stated that it "believed that the Chancellor's actions are unlawful". FoE pointed out that their action was supported by evidence from a number of organisations including "some investment bodies". Press reports have indicated that the hearing will take place in March.

Friday, December 02, 2005

Sarbanes-Oxley – a short introduction

The US Public Company Accounting Reform and Investor Protection Act, commonly known as the Sarbanes-Oxley Act after its sponsors, Senator Paul Sarbanes and Representative Michael G. Oxley – SOX, Sarbox or SOA for short – became law in 2002 following a series of corporate financial scandals, including those affecting Enron, Arthur Andersen, and WorldCom. The Act aims to protect investors by imposing greater auditor independence, corporate responsibility and by improving the accuracy and reliability of corporate financial disclosures. It set up the Public Company Accounting Oversight Board (PCAOB) and specified new criminal penalties.

Applying to all companies issuing securities (shares) in the United States, the Act is organised under the eleven ‘Titles’, the major provisions of which include:

  • Companies must publish independent annual audit reports on their internal controls relating to financial reporting.
  • Certification of financial reports by CEOs and CFOs.
  • Companies must now have an externally certified internal audit function.
  • Longer gaol sentences and larger fines for corporate executives who ‘knowingly and willfully’ misstate financial statements.
  • Prohibition on audit firms providing extra "value-added" services to their clients including actuarial services, legal and extra services (such as consulting).

Section 404 and IT

Section 404 – the reporting of internal financial controls and reports - is a key area for compliance. It is also the area where greatest investment, including in IT systems, is needed. For IT firms Sarbox is a jackpot, with a worldwide market for information management systems for compliance estimated to grow to $20 billion in 2009. The vital elements of 404 compliance are:

  • Effective and efficient processes for monitoring and reporting on controls
  • Integrated financial and internal control processes
  • Technology to enable compliance
  • Clearly articulated roles and responsibilities and assigned accountability
  • Education and training to reinforce the “control environment”
  • Adaptability and flexibility to respond to organizational and regulatory change.

Cost of compliance

The estimated total cost of Sarbox compliance for US companies in 2005 is $5.8 billion (28% on IT, 42% internal resources, 29% outsourced). For smaller companies the costs are proportionally higher than for large corporations. One US investor has suggested that these costs may encourage start-ups to list on the London Stock Exchange’s AIM market rather than the NASDAQ.

Dissident voices

Although the Act was passed with near unanimity, some politicians and business commentators now say it may have gone too far. UK Prime Minister Tony Blair has suggested that it is too broad in scope, compliance too expensive and that it ‘has provided a bonanza for accountants and auditors, the very professions thought to be at fault in the original scandals.’

What does this mean for the rest of the world?

Companies not issuing securities in the US may receive requests from US trading partners for more information about contractural relationships, but UK and Europe have no plans to follow the US lead. However there are parallels with the new UK requirement for firms to include an Operating and Financial Review (OFR) in their annual reports. Although intended as a ‘light touch’ instrument this too requires the CEO to sign it off as covering all ‘material’ matters likely to affect the company’s performance.