The Real "New World Order"
I see that Unocal has settled the case against it relating to human rights in Burma. Unocal was charged with complicity with the government of Burma in various human rights violations related to the construction of a gas pipeline in that country. Although its not clear how much precedent an out-of-court settlement creates for this kind of application of the Alien Tort Claims Act of 1789, the implications for businesses, either US-based or with significant US operations, seem pretty clear.
For some time various non-governmental organizations (NGOs) have pushed for the application of US standards in labor practices, safety, and environmental protection on companies operating outside the US. One case doesn't make a trend, but prudent managers and investors should expect wider and more frequent use of this approach in the future. The rise of global "civil society", in the form of influential NGOs with both media and legal savvy, is one of the major developments of the last decade or so.
On one level, companies operating abroad will need to do so to the higher of US or local standards. But, as in the Unocal case, the greater peril may come from the actions of local partners, including governments, that are not under the control of the US entity, but for whose actions the US firm may be held responsible. Fair or not, this raises the stakes significantly when considering whether an opportunity in a country with a less-than-perfect government, or less-than-ideal commercial partners, may be attractive enough to offset the financial and reputational risks involved. It also suggests that companies need to build up positive "soft power" in form of relationships with NGOs and multi-lateral agencies.
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