Published online by Cambridge University Press: 28 September 2012
The traditional realist paradigm holds that the sovereign nation-state is the principal political and legal unit in the world community. Reflecting this tradition, most studies of economic sanctions are state-centered. They assume that states exercise control over their national corporations to deny economic resources to other states. Within this framework, nongovernmental human rights organizations become involved only as interest groups, lobbying governments to regulate or ban private economic activity with designated malefactor. These groups, however, are generally unable to persuade states to mandate disinvestment from or socially responsible behavior within repressive regimes. As a result, they redirect their energies away from the central authorities and toward corporations-directly pressuring them through boycotts and shareholder activism-and local governments-persuading them to condition municipal contracts on human rights criteria.
This essay examines the degree to which these nonstate actors can provide an alternative center of authority to that of the state in imposing human rights accountability on corporate conduct abroad. The first section explains the logic of nonstate sanctions and establishes criteria against which one can judge their challenge to realism. The second section assesses the successes and limitations of the anti-apartheid movement, which is viewed as the role model for such efforts. The third and final section contrasts the South African case with recent campaigns against corporate investment in Burma and Nigeria. These cases have been chosen because most grassroots organizations have pressed for corporate withdrawal rather than for more socially responsible business practices. Each represents an attempt by citizens' groups to impose sanctions against repressive regimes beyond those enacted by governments.
1 Billenness, Simon, “Beyond South Africa: New Frontiers in Social Responsibility,” Business and Society Review 30 (Summer 1993), p. 29Google Scholar, and Cassell, Douglass, “Corporate Initiatives: A Second Human Rights Revolution,” Fordham International Law Journal 19 (1996), pp. 1963–84Google Scholar.
2 Control Risks Group (CRG), No Hiding Place: Business and the Politics of Pressure (July 1997), pp. 3–4.
3 See “Multinationals and Their Morals,”Economist, December 12, 1995, p. 18.
4 See David P. Forsythe, Human Rights and World Politics (Lincoln: University of Nebraska Press, 1979), pp. 130–36.
5 David Vogel, Lobbying the Corporation: Citizen Challenges to Business Authority (New York: Basic Books, 1978), ch. 1.
6 John M. Kline, State Government Influence in U.S. International Economic Policy (Lexington, Mass.: D. C. Heath, 1983), pp. 197–200.
7 Vogcl, Lobbying the Corporation, p. 8.
8 Spiro, Peter J., “Taking Foreign Policy Away from the Feds,” Washington Quarterly 10 (Winter 1988), p. 195Google Scholar.
9 Richard W. Mansbach and John A. Vasquez, In Search of Theory: A New Paradigm for Global Politics (New York: Columbia University Press, 1981), p. 5. The best realist defenses of state-centrism are Kenneth N. Waltz, Theory of International Politics (Reading, Mass.: Addison-Wesley, 1979), pp. 93–97, and Stephen D. Krasner, “Power Politics, Institutions, and Transnational Relations,” in Bringing Transnational Relations Back In: Non-State Actors, Domestic Structures, and International Institutions, edited by Thomas Risse-Kappen (Cambridge: Cambridge University Press, 1995), pp. 257–79.
10 Richard W. Mansbach, Yale H. Ferguson, and Donald E. Lampert, The Web of World Politics: Nonstate Actors in the Global System (Englewood Cliffs, N.J.: Prentice-Hall, 1976), p. 3.
11 Movsesian, Mark L., “The Persistent Nation-State and the Foreign Sovereign Immunities Act,” Cardozo Law Review 18 (December 1996), p. 1091Google Scholar.
12 Bruce Russett and Harvey Starr, World Politics: The Menu for Choice, 3rd edition (San Francisco: W. H. Freeman, 1988), p. 492.
13 Spiro, Peter J., “New Global Potentates: NGOs and the ‘Unregulated’ Marketplace,” Cardozo Law Review 18 (December 1996), p. 961Google Scholar.
14 See Robert M. Price, The Apartheid State in Crisis: Political Transformation in South Africa, 1975–1990 (New York: Oxford University Press, 1991), pp. 222–33.
15 On the variation in national regulations, see Alison Cooper, International Bank Lending to South Africa (Washington, D.C.: Investor Responsibility Research Center [IRRC], September 1988), pp. 329–33.
16 Richard Knight, “Sanctions, Disinvestment, and U.S. Corporations in South Africa,” in Sanctioning Apartheid, edited by Robert E. Edgar (Trenton, N.J.: Africa World Press, 1990), p. 81.
17 Testimony of Gordon Phelps in U.S. Congress, House Committee on Foreign Affairs, Legislative Options and United States Policy Toward South Africa, 99th Congress, 2nd session, 1985, p. 164. Reagan administration officials made comparable arguments in equating constructive engagement with these “sanctions of the marketplace.” See Knight, “Sanctions, Disinvestment, and U.S. Corporations in South Africa,” pp. 69–71.
18 See American Banker, October 2, 1985, p. 14.
19 See William Minter, King Solomon's Mines Revisited: Western Interests and the Burdened History of Southern Africa (New York: Basic Books, 1987), p. 319, and Richard W. Hull, American Enterprise in South Africa: Historical Dimensions of Engagement and Disengagement (New York: New York University Press, 1990), ch. 6.
20 Knight, “Sanctions, Disinvestment, and U.S. Corporations in South Africa,” pp. 80–81.
21 “South African Bank Deadlock,”Financial Times, February 19, 1986, p. 16.
22 David Tonge and Quentin Peel, “How South Africa Won Its Billion-Dollar Battle in the IMF,”Financial Times, January 25, 1983, p. 4.
23 Richard Leonard, “Business and South Africa: Pressures Against Apartheid Mount in the USA,”Multinational Business (fall 1984), pp. 15–17.
24 Knight, “Sanctions, Disinvestment, and U.S. Corporations in South Africa,” p. 85.
25 According to the IRRC, $4 billion of the $13 billion remaining in frozen assets in 1989 was converted through this device. U.S. banks, facing stronger pressure at home, used Section 12 to cover $1.7 billion, or 70 percent, of their $2.4 billion in outstanding loans. See “U.S. Banks and South Africa,” Banking Report B, Supplement C, March 12, 1991, p. 4.
26 Ibid., p. 12.
27 Michael Holman, “SA Seeks Early Debt Rescheduling,”Financial Times, September 22, 1989, p. 4.
29 Sec William F. Moses, A Guide to American State and Local Laws on South Africa (Washington, D.C.: IRRC, August 1992), pp. 14, 145–46, and Jennifer D. Kibbe, Divestment on Campus: Issues and Implementation (Washington, D.C.: IRRC, 1989).
30 Les de Villiers, In Sight of Surrender: The U.S. Sanctions Campaign against South Africa, 1946- 1993 (Westport, Conn.: Praeger, 1995), pp. 55–57.
31 Moses, A Guide to American State and Local Laws on South Africa, pp. 1, 13.
32 Crehan to Secretary of State, “Update on Divestment,” October 30, 1987, Johannesburg 02287 (document obtained through the Freedom of Information Act).
33 Allan R. Janger and Ronald E. Berenbeim, External Challenges to Management Decisions: A Crowing Business Problem (New York: The Conference Board, 1981), p. 22 (emphasis in original).
34 IRRC, South African Reporter, June 1989, p. 17.
35 Anthony Robinson, “Sanctions Limit Growth Rate,”Financial Times, June 9, 1988, Survey, p. 2.
36 For an overview, see David Hauck, “What Happens When U.S. Companies Sell Their South African Operations,” IRRC, South Africa Review Service, May 1987.
37 Hull, American Enterprise in South Africa, p. 334.
38 Hauck, “What Happens When U.S. Companies Sell Their South African Operations,” p. 9.
39 Business International, Critical Issues Monitor, April 1986, p. 30.
40 IRRC, “U.S. Business in South Africa,” 1990 Analysis C, December 29, 1989, pp. 3–7.
41 Ibid., p. 6.
42 Keith Ovenden and Tony Cole, Apartheid and International Finance: A Program for Change (Victoria, Australia: Penguin Books, 1989), p. 157.
43 Jennifer Kibbe and David Hauck, “Leaving South Africa: The Impact of U.S. Corporate Disinvestment,” IRRC, South Africa Review Service, July 1988, pp. 18–20.
44 Kibbe, Divestment on Campus, pp. 19–20.
45 IRRC, “Withdrawal of U.S. Companies from South Africa and Ending Non-Equity Ties,” 1989 Analysis C, December 13, 1988, pp. 14–17.
46 Ibid., 1990 Analysis C, January 2, 1990, p. 1.
47 IRRC, South African Reporter, March 1991, p. 6, and June 1991, p. 5.
48 Moses, A Guide to American State and Local Laws, p. 7.
49 See Business International, Critical Issues Monitor, August 1986, p. 36, and Moses, A Guide to American State and Local Laws, pp. 7–8.
50 Business International, Critical Issues Monitor, December 1985, p. 13.
51 Ibid., April 1987, p. 16.
52 IRRC, South Africa Reporter, March 1988, p. 11.
53 According to the IRRC, from 1984 through 1990, 65 percent (202 of 313) of U.S. investors withdrew, as contrasted with 24 percent (131 of 574) for the rest of the world. See “Facts and Figures on South Africa: Answers to 12 Frequently Asked Questions,” August 1990, p. 3, and February 1993, pp. 30–31.
54 Economic Intelligence Unit (EIU), Myanmar, Country Report, 1996, no. 3, p. 11.
55 IRRC, Social Issues Reporter, February 1997, p. 14.
56 Ibid., April/May 1996, p. 9.
57 IRRC, “Unocal, Human Rights (2 Resolutions)—Burma,” 1997 Company Report K and K:1, pp. 6–8.
58 EIU, Myanmar, Country Report, 1997, no. 2, p. 7.
59 See Carroll Doherty and Pat Towell, “Senate Passes Foreign Aid Bill after Dispute over Myanmar,”Congressional Quarterly Weekly Report, July 27, 1996, p. 2131.
60 Oil Daily, May 22, 1997, p. 3.
62 Business Week (Bruce Einhorn, “Doing Business with Strongmen,” April 22, 1996, p. 53) reported that 75 U.S. colleges and universities have boycott movements associated with Burma.
63 Unlike the South African case, proxy resolutions calling for disinvestment or linking the suspension of operations to a regime's political practices were ruled out of order by a 1994 decision by the U.S. Security and Exchange Commission as unrelated to the fiduciary responsibilities of the companies. Hence, proxy resolutions had to be crafted to comport with this ruling. See IRRC, Social Issues Reporter, January 1996, p. 6.
64 Organization for International Investment, “Status of State and Local Sanctions,” November 4, 1997. This survey was posted on the website of USA-Engage, a corporate lobbying group opposed to unilateral sanctions (http://www.usaengage.org/news/status.html).
65 EIU, Myanmar, Country Report, 1997, no. 1, p. 10.
66 Ted Bardacke, “American Burma Boycotts Start to Bite,”Financial Times, February 6, 1997, p. 6.
67 Jay Matthews, “Pepsico to Pull Out of Burma,”Washington Post, January 28, 1997, p. C2.
68 See IRRC, Social Issues Reporter, April-May 1996, p. 10; Oil Daily, March 4, 1997, p. 2; and Agis Salpukas, “Foreign Energy, Domestic Politics: Burmese Projects Test UNOCAL's Resolve,”New York Times, May 22, 1997, p. D1.
69 For examples, see IRRC, Social Issues Reporter, December 1996, p. 14, and March 1997, p. 11.
70 IRRC, Social Issues Reporter, February 1997, p. 13.
71 Michael Lelyveld, “Clinton Backs Weld on Sanctions against Myanmar,”Journal of Commerce, July 23, 1997, p. 5A.
72 Paul Lewis, “Nigeria's Deadly Oil War,”New York Times, February 13, 1996, p. Al.
73 IRRC, Social Issues Reporter, December 1996, p. 23.
74 Lewis, “Nigeria's Deadly Oil War,” p. A10.
75 “Shell Facing New Onslaught on Nigeria,”Financial Times, December 16, 1995, p. 3.
76 Joshua Hammer, “Nigeria's Crude,”Harpers, June 1996, p. 58.
77 Oil Daily, December 18, 1995, p. 4.
78 For a detailed reporting on the failed sanctions effort, see Glenn Frankel, “Nigeria Mixes Oil and Money: A Potent Formula Keeps U.S. Sanctions at Bay,”Washington Post, November 24, 1996, p. C1.
79 Paul Lewis, “U.S. Seeking Tough Sanctions to Press Nigeria for Democracy,”New York Times, March 12, 1996, p. A1.
80 EIU, Nigeria, Country Report, 1996, no. 1, pp. 8–9.
81 Reuters Business Report, November 13, 1995.
82 Inter Press Service, November 14, 1995. Unlike other NGOs involved in this issue, Amnesty's mandate is to remain apolitical and protest the incarceration of “prisoners of conscience”—i.e., those who do not advocate violence—and the use of torture against all prisoners. Rather than advocate a strategy of nonstate sanctions to weaken the regime, its aim is to use MNCs, such as Shell, to add another voice for the release of political prisoners. See IRRC, Social Issues Reporter, January 1996, p. 19. Also, note the difference between Amnesty and Greenpeace in their response to Shell's announcement of human rights guidelines in Stefan Wagstyl, “Campaigners Dialogue with Business Urged,”Financial Times, March 19, 1997, p. 3.
83 IRRC, Social Issues Reporter, January 1997, p. 14, and Youseff Ibrahim, “Shell's Shareholders Reject a Human Rights Initiative,”New York Times, May 15, 1997, p. D4.
84 IRRC, State and Local Selective Purchasing Laws as of September 1997, p. 4.
85 IRRC, Social Issues Reporter, March 1997, p. 12.
86 EIU, Nigeria, Country Report, 1996, no. 3, p. 19.
87 Robert Corzine, “Shell to Consult Pressure Groups,”Financial Times, March 18, 1997, p. 23.
88 Dev George, “International E&P at Record Height, Important Discoveries Driving Activity.”Offshore, May 1997, p. 36
89 EIU, Nigeria, Country Profile, 1997, p. 23.
90 Spiro, “New Global Potentates,” p. 963.
91 Ibid., p. 958. On recent NGO successes in the labor and environmental fields, see CRG, No Hiding Place, chs. 2, 4.
92 Risse-Kappen, introduction, Bringing Transnational Relations Back In, p. 25.
93 “Curbing Runaway Sanctions,”Journal of Commerce, September 8, 1997, p. 6A.
94 See “Proliferation of Sanctions Creates a Tangle of Good Intentions,”Congressional Quarterly Weekly Report, September 13, 1997, pp. 2113–20.
95 Waltz, Theory of International Politics, p. 94.