The introduction of Corporate Social Responsibility, particularly those found within the global south’s extractive and manufacturing sectors, have been met with political and transnational firm apathy through its failed initial attempts to establish CSR through social licenses. Nevertheless, with the prompt unraveling of its heightened disregard for negative human and environmental implications voiced by civil society organizations (CSOs), CSR frameworks have voluntarily, or by form of societal pressure, become increasingly appealing to multinational corporations (MNCs) across the globe. Such is the case of Bolivia, where accountability measures found within CSR systems reach an impasse due to its inherent lack of transparency in transactions and widespread corruption networks across governmental branches. Nevertheless, global agendas pushed by intergovernmental organizations have had significant impact when informing, incentivizing, and cooperating with MNCs to promote sustainable development, such as the United Nation’s recent 17 Sustainable Development Goals (SDGs), Global Compact, and Guiding Principles on Business and Human Rights. Academic emphases increasingly stress the imperative role that CSOs have in holding MNCs accountable for their human and environmental impacts by demanding the necessary conditions for a successful self-sustainable process to be implemented through respected feedback loops.

CSR adoption has proven to leverage intangible capabilities to consumers, more specifically within the grocery store and soft drink department. These include, but are not limited to, increased access to information, comprehension of client concerns, development of eco-friendly systems, facilitation of recycling procedures, advanced technological assimilation, and low purchase risk from products that lack transparency. Ultimately, adopting CSRs is appealing to consumers as it signals a business’ willingness to not only invest in its brand and its workers from all ranks, but also the desire leverage future benefits for its customers, society, and the environment at large at the expense of a chosen reform’s cost. These reforms are proven to have high financial returns in the long-run by affecting customers’ levels of satisfaction and loyalty. Nevertheless, in areas where customers have limited budgets and do not have the luxury of purchasing more ethically and sustainably produced products, the marketing tools that CSR provide cannot be accessed and, in turn, disincentivize corporate structures to reform. This is the case of Bolivia, where blue collar worker’s social licenses are jeopardized as the assumed institutional responsibilities primarily held in the global north that guarantee a reasonable level of citizen participation are inexistent. This is especially true for extractive sectors, where mining centers in Potosi and Oruro maintain worrisome levels of poverty and inequality intergenerationally.

Ultimately, the incentive leverage that customer consciousness and satisfaction has in MNCs decision making process to adopt CSR methods varies across the good governance assumptions between the global north and south. Taking Bolivia as an extreme synecdoche of the global south’s MNC experience within extractive and manufacturing sectors, the lack of funding and acknowledgement of independent CSOs and grassroot movements correlates with a failure to politically legitimize its citizens interests regarding human and environmental rights. Within the two Bolivian manufacturing industries mentioned above, translating customer satisfaction into three key CSR categories, them being recycling convenience, eco-friendly practices, and ethical behavior, is proven to gradually increase its customer loyalty and, hence, its long-term profitability. Within its extractive sector, CSOs have the option to connect themselves with Intergovernmental Organizations informational platforms, such as the Inter-American Development Bank, or  Transnational Advocacy Networks (TANs) to legitimize their claims on a regional scale and pressure local government officials to adopt clearer terms of engagement with MNCs operational execution.

References

Campero, Cecilia, and Jonathan R. Barton. “‘You Have to Be with God and the Devil’: Linking Bolivias Extractive Industries and Local Development through Social Licences.” Bulletin of Latin American Research, vol. 34, no. 2, 2014, pp. 167–183., doi:10.1111/blar.12260.

Herbas Torrico, B., Frank, B. & Arandia Tavera, C. Int J Corporate Soc Responsibility (2018) 3: 7. https://doi.org/10.1186/s40991-018-0029-0

Huber, Evelyne. “The Key to Evo Morales’ Political Longevity.” Foreign Affairs, Foreign Affairs Magazine, 16 Feb. 2018, www.foreignaffairs.com/articles/bolivia/2018-02-14/key-evo-morales-political-longevity.

“IDB Group-Civil Society, Wiconnect3.” Inter-American Development Bank , www.iadb.org/en/civil-society/home.

Keck, Margaret E., and Kathryn Sikkink. Activists beyond Borders: Advocacy Networks in International Politics. Cornell University Press, 1998. JSTOR, www.jstor.org/stable/10.7591/j.ctt5hh13f.

The transnationalisation of state ownership through manufacturing and financial Multinational Corporations (MNCs) has facilitated the opportunity of firms to shift production sites, integrate themselves in complex supply chains that have complex regulatory mechanisms, and avoid states attempts to domestically tax and regulate their activities according to local law’s. As a response to the international political economy’s complex imposition of global capitalism, the United Nation’s (UN) has launched the ambitious Sustainable Development Goals (SDG). Having altered its highly contested and isolationist Millennium Development Goals (MDGs) to the African continent, its new ambitious global agenda outlines seventeen interdependent categories that embody the most accurate multidimensional representation of how “sustainable development” can be manifested to date. Nevertheless, in order to achieve these goals within more impoverished states, governments must tailor their allocation of resources according to their most dire necessities. Nevertheless, these goals hold contradictions and assumptions that counter governments interests of establishing domestically self-sustainable secondary sectors and, therefore, allow tertiary sectors the opportunity to flourish. Challenging the role MNCs play within the SDGs can allow decision makers to better format their relationships with transnational actors and fulfill the interests of not only their countries, but the environment and their citizens.

Considering how a total of 147 MNCs control a total economic sum of approximately 40 percent of transnational firms gains globally, states become increasingly economic and politically submissive to MNCs operational interests. Vulnerable states within the global south that experience the highest levels of inequality are chained to receiving MNCs on their requested terms and conditions as they risk business flying out to neighboring countries offering similar standardized prices in good and services . The paradoxical relationship between states and MNCs is seen in their useful exchange between labor/resources and economic stimulus respectively, yet continuously maintain antagonistic interests and incentives when fulfilling their end-goals. By using the SDGs as a lens to see how the UN balances such interests while protecting countries sovereignty, we see inherent contradictions in goal 8: “prompting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”. Sub-target 8.2 dictates that higher economic productivity should be achieved through “diversification, technological upgrading and innovation”, while sub-target 8.3 incentivizes the advancing of policies oriented to “support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro, small and medium sized enterprises”. The dilemma lies in the perspective that certain developing countries that have yet to access their own true competitive advantage become overwhelmed by welcoming MNCs abroad, taking over certain markets domestically. The economic assumptions hanging on creative destruction is a strong one, yet when analyzing Brazil, Japan, and India’s holistic positive experience with import substitution industrialization, one may contest the appropriateness behind the time and place in which opening particular segments of the economy might be beneficial to completing such SDGs on an international scale through MNCs adoption. Understanding the implications that endowing chunks of domestic markets to MNCs can have in the fulfillment of other SDGs is crucial, as giving them the increasing oversight over states’ means of production may enhance its global interconnectedness, but often at the expense of other SDGs that are paramount to assuring the rightful provisions of environmental and human rights as seen in SDG 3 (good health and well-being), 11 (sustainable cities and communities), 12 (responsible consumption and production), 13 (climate action), 16 (peace, justice and strong institutions), among more. State’s elite complacency with MNCs short-term economic fruit has demonstrated to have long-term repercussions in establishing nationwide opportunities. This, in turn, forces s state to jump phases of its proper self-development and steals entrepreneurs from the possibility of advancing their own ideas tailored to their own states and communities history, culture, and alternative preferences entrenched into communities .

References

Babic, Milan, et al. “States versus Corporations: Rethinking the Power of Business in International Politics.” The International Spectator, vol. 52, no. 4, 2017, pp. 20–43., doi:10.1080/03932729.2017.1389151.

“Sustainable Development Knowledge Platform.” United Nations, United Nations, 2015, sustainabledevelopment.un.org/sdg8.

Viederman, Stephen. “Multinational Corporations Are Incompatible with Sustainable Development.” Global Policy Forum, 23 June 1997, www.globalpolicy.org/social-and-economic-policy/the-environment/the-rio-process/45488-multinational-corporations-are-incompatible-with-sustainable-development.html.