Pope Francis stressed the importance of businesses being held responsible for the costs their activities imposed on others:
“The 1992 Earth Summit in Rio de Janeiro is worth mentioning. It proclaimed that “human beings are at the centre of concerns for sustainable development”. Echoing the 1972 Stockholm Declaration, it enshrined international cooperation to care for the ecosystem of the entire earth, the obligation of those who cause pollution to assume its costs, and the duty to assess the environmental impact of given projects and works….Yet only when “the economic and social costs of using up shared environmental resources are recognized with transparency and fully borne by those who incur them, not by other peoples or future generations”, can those actions be considered ethical.” (Laudato si, 167)
Ensuring that businesses bear the full costs their activities impose on others and/or ensuring that businesses exercise restraint and do not damage the local environment is an important responsibility of government. There can be a variety of ways in which this can be done. Tort laws can require compensation for damage. Mechanisms can be provided for local people which compensate them for the costs that are imposed on them by business activity. The activities of business can also be regulated to limit damage. Catholic teaching would demand that the kind of action that is taken should be determined with the active participation of local people and should fully take into account local culture.
Corruption, violence, war and civil conflict, together with other institutional failings are significant barriers to ensuring that businesses fulfil their responsibilities in this respect. Where such problems exist, the ethical demands on businesses are commensurately higher. But, even if legitimate businesses meet high ethical standards, economic activity, controlled by corrupt interests or interests connected to illegal activities may well dominate in some countries. For example, corruption, the illegal clearing of forests and the ignoring of customary rights of ownership are responsible for 36 per cent of all logging in India; 56 per cent of all logging in Indonesia; and 87 per cent of all logging in Nigeria. Similar problems exist in South American countries.
Pope Francis has spoken out strongly against corruption, for example: “For many people today, politics is a distasteful word, often due to the mistakes, corruption and inefficiency of some politicians” (Fratelli tutti, 176) and “the misuse of power, corruption, disregard for law and inefficiency must clearly be rejected” (177). In Laudato si, corruption is mentioned several times. It is pointed out that “when the culture itself is corrupt and objective truth and universally valid principles are no longer upheld, then laws can only be seen as arbitrary impositions or obstacles to be avoided” (123). Countries are exhorted to combat corruption (172 and 179). Pope Francis expresses concern that corruption can hide the environmental impact of business projects. Linking political corruption with business, he suggests that the culture of corruption can lead business groups to “come forward in the guise of benefactors, wield real power, and consider themselves exempt from certain rules, to the point of tolerating different forms of organized crime, human trafficking, the drug trade and violence, all of which become very difficult to eradicate”. (197)
Catholic social teaching clearly exhorts both business and governments to avoid corruption. There is a clear relationship between environmental harms and the abuse of human rights from business activity and whether countries have well-functioning institutions of government. But poor governance is still not an excuse for poor corporate behaviour.
The Catholic Church has also made clear that investors in companies have a responsibility too. In a recent publication Mensuram Bonam there was considerable explanation of the important role of investors in ensuring that environmental and human rights standards were met by businesses. Investors were called upon to engage with companies, share good practice and, if necessary, exclude companies from portfolios that did not behave in ethical ways in this regard.
The Catholic Church’s approach to these issues is, perhaps, best summed up in a paragraph in Pope Benedict’s Caritas in Veritate.
“The word “ethical”, then, should not be used to make ideological distinctions, as if to suggest that initiatives not formally so designated would not be ethical. Efforts are needed—and it is essential to say this—not only to create “ethical” sectors or segments of the economy or the world of finance, but to ensure that the whole economy—the whole of finance—is ethical, not merely by virtue of an external label, but by its respect for requirements intrinsic to its very nature. The Church’s social teaching is quite clear on the subject, recalling that the economy, in all its branches, constitutes a sector of human activity.” (45).
In other words, because all human activity should be performed in an ethical manner, all economic and business activity should be performed in an ethical manner.
But, to return to the point made at the beginning, we know that business behaviour consistent with respecting and promoting environmental goals and human dignity is much more easily achieved if states govern effectively. As John Paul II put it, after emphasising the benefits of a business economy: “Economic activity, especially the activity of a market economy, cannot be conducted in an institutional, juridical or political vacuum. On the contrary, it presupposes sure guarantees of individual freedom and private property, as well as a stable currency and efficient public services…The absence of stability, together with the corruption of public officials and the spread of improper sources of growing rich and of easy profits deriving from illegal or purely speculative activities, constitutes one of the chief obstacles to development and to the economic order.” (48)
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Photo by Tima Miroshnichenko:
