Reflection of skyscraper through RPC's transparent glass with sheep and guy on bridge.

Watch where you work

13 April 2015. Published by Genevieve Isherwood, Senior Associate

Recently, I attended a law fair on behalf of RPC and was asked an interesting question.


Is it appropriate for RPC to be a Stonewall Diversity Champion when we have an office in Singapore, where homosexuality is illegal? Whilst I was somewhat stumped for an answer at the time, HR were able to advise that whilst RPC is required to abide by Singapore's laws, as with any country, the firm wouldn't compromise its principles to "fit in". If a conflict with such laws arose, RPC's number one priority would be the wellbeing of its staff.

Whilst that addresses RPC's position, the question did get me thinking more generally. Should companies work and invest in countries whose principles (and laws) do not align with their own?

But this is not just a hypothetical question: this has got companies into trouble many times before. For example, Procter & Gamble and Ernst & Young, have both received negative press attention for their involvement in Russia. This may have had little effect on the company in the long term, but in some cases it has created enough of a spark for changes to be made in company policy.

Burma Campaign UK runs campaigns aimed at preventing companies from "investing in Burma in ways which contribute to human rights abuses". Their work has been very effective: in October 2008 their campaign against Cotton Traders led to the company deciding to cease sourcing clothing from Burma within days.

Likewise, in 2009,Fruit of the Loom (and its subsidiary Russell Athletic) were forced to alter their decision to close a Honduran factory (allegedly because of staff forming an employee alliance) after sustained pressure from American and British students. 96 US colleges and 10 British universities severed their contracts with the company, costing Russell Athletic an estimated $50 million in the US alone. In response to one of the largest ever student boycotts the company re-opened the Jerzees de Honduras factory, gave all 1,200 employees their jobs back, awarded them $2.5 million in compensation and restored all rights.

Broader, more ideological boycotts have changed companies' behaviour as well. G4S, H&M and Motorola have all been the subject of boycott action as a result of the Palestinian Boycott, Divestment and Sanction Movement. Ahava Active Dead Sea Products has also been criticised for maintaining a factory in the West Bank, and their Covent Garden store was forced to close after repeated protests. The Lonely Planet no longer lists the Ahava showroom as a recommended stop on a Dead Sea itinerary.

But should the answer be as simple as to cut all ties at the first sign of controversy?

If a UK company decided to restrict the countries it invested in or worked with to those whose laws exactly matched ours, its international trade opportunities would be few and far between. To start with, homosexuality is illegal in 76 countries; there are 63 countries where the legal age of consent is lower than 16 and 31 countries have not signed the UN Convention on the Rights of Persons with Disabilities. Practically, never mind economically or politically, this would be completely impossible to stand by.

Is there another option? The actions of Stolichnaya vodka makers certainly suggest so. This brand is unquestionably Russian ("The mother of all vodka from the motherland of vodka"), but the company is Luxembourg based and the vodka is filtered and blended in Latvia. In July 2013, it was included in a boycott of Russian vodkas protesting against anti-gay laws enacted by the Russian government. Stoli's production company released a statement denouncing the "dreadful actions taken by the Russian Government" and described itself as a "fervent supporter and friend to the LGBT community". It also chose to make a financial donation to an unspecified group "working on behalf of Russian LGBT activists fighting against the Russian government's anti-gay policies". Following this and further brand campaigns, Stoli saw a large sales increase.

We can all strive to maintain clear company values whilst working effectively in various parts of the world. We just have to know where our tolerance stops. As Stoli shows, even at the end of that threshold, it can still be possible to make decisions that positively impact both our geographical brand and our business opportunities.

Genevieve Isherwood

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