Corporates realise benefits of being a good citizen

A very good living is being made by people like Naomi Klein writing books against global corporates, such as her bestseller, No Logo. (Please, there's no bitterness because she outsells my books.)

The world is not being taken over by large companies - their share of world trade is smaller than 200 years ago when the great imperial-protected companies carved up India and other colonies. Their shareholding is now much more diverse, even democratised.

Management guru Peter Drucker recently pointed out that through their pension funds, employees of US businesses today own at least 25 per cent of US equity capital.

If socialism is defined as the ownership of the means of production, then the US is more socialist than Poland ever was.

The funds of the self-employed and public employees own at least another 10 per cent, giving workers ownership of more than one-third of the equity capital of US businesses.

Business can no longer trick governments into guaranteeing profits by promising local monopolies. In most cases, the finished product now has inputs from many sources.

Anyway, what is a brand name but a reputation? And all that that represents is goodwill and trust stored up over years of success.

I think the opposite will, and is, happening in spite of what some activists claim. A reputation is vulnerable, hard won and easily lost.

Corporates live in a world of free information, investigative journalists, non-government organisations and politicians on the prowl for a headline, and now need to conduct business in a more ethical and transparent manner.

Nike has been on the receiving end of protests over ripping off workers in developing countries. In Vietnam, Nike pays workers five-times the average wage and in Indonesia three-times the average. In Vietnam this is causing problems, with doctors leaving hospitals and professors quitting universities to work on the factory floor.

The International Labour Organisation did a survey in developing countries and found that multinationals paid higher wages, had better safety and health records and were more likely to recognise trade unions. It's local businesses that are more likely to treat their workforce badly. The big corporates are vulnerable and must respond to public and shareholders opinion.

It's the trust people have in well-known brands, because they know what they will get, that opens up all sorts of possibilities to effect social change and improvements in the way people live in poor countries.

The world is interdependent (note the SARS scare). It's a bit like Victorian England, when the rich discovered they were not safe in their mansions and great estates if their servants and workers were sick or poorly educated. Queen Victoria's husband, Albert, died after contracting typhoid from a polluted Thames, while one of the 19th century's richest men, Nathan Rothschild, died in 1837 of an infection. The poorest person in most countries can now be cured of many life-threatening infections by simple antibiotics.

The ideas of public goods, municipal socialism, public sewerage, clean water and education have come of age. Now corporations in developing countries understand that they must provide for their workers and that they live in a wider society.

I've visited countries where nothing works, but you can always get a cold glass of Coca Cola. There's even a trial under way for Coke to service condom machines.

Due to public embarrassment and grotesque rip-offs, giant petroleum companies such as BP and Shell have adopted strict policies on ethical behaviour and now refuse to pay bribes. They are working with the United Nations to provide new transparent standards of behaviour and public/private partnerships to alleviate poverty.

It's good business to be a good citizen. Virtue gets a real reward. What's encouraging is the movement in developed countries for consumers to take power and not purchase products that damage the environment or are produced in an unethical manner.

Investors, particularly trade union funds, are demanding more ethical behaviour. The Californian public servants' $US150 billion ($236 billion) pension funds invest 25 per cent of their portfolio offshore. They have strict rules and study each investment and destination in regard to human rights. The Gates Foundation has put more money into fighting AIDS in Africa than the World Health Organisation, while George Soros injected more funds into Central Europe than did the US.

In a globalised world, there are fewer places for corrupt politicians, bureaucrats and businesspeople to hide. What a splendid thing.