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Rejecting bad company

Some shareholders are forcing firms to weigh the human rights consequences of their business practices

By Kevin Carrel FooterSpecial to The Christian Science Monitor / May 1, 2003


Esteban Reimer, a union leader at the Mercedes-Benz plant in Argentina, had just put his daughter to bed when commandos banged on the door. After ransacking the apartment, they dragged Mr. Reimer away. That night, Jan. 5, 1977, was the last time his wife ever saw him.

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He disappeared into the gulag of 340 secret detention centers, where Argentina's worst human-rights abuses were committed. Twenty years after the fall of the military junta, Reimer's wife, María Luján, like many others, is still seeking answers.

But recently, they found an unexpected ally in their bid to uncover the truth: German shareholder activists who forced DaimlerChrysler, owner of Mercedes-Benz, to begin investigating whether plant managers had collaborated with the military in the disappearance of Reimer and 13 other workers.

Argentines are deeply divided over how to confront the legacy of the military junta that ruled during the country's seven-year "dirty war." Many would like to forget those dark times when 9,000 people disappeared. But others, especially those desperate to piece together the last days of family and friends, want a full account.

Amnesty legislation has left all but a few dirty war criminals beyond the reach of the law. But now this new investigation opens another avenue to find answers.

Pressure has intensified in recent years for corporate boards to weigh the human rights consequences of their business practices. Activists have put such titans as Nike and Wal-Mart in the spotlight for using sweatshop labor, while Unocal is currently being sued in US courts by 13 Burmese villagers, who charge that the firm knew about the Burmese military's use of forced labor on a $1.2 billion pipeline project.

But the DaimlerChrysler case appears to take these efforts one step further, targeting not just bad labor practices but possible corporate collaboration with a repressive government. DaimlerChrysler is the first firm to open a public investigation into what role, if any, it played in disappearances that occurred at its factory during the dirty war.

By taking aim at human rights abuses and poor treatment of workers, shareholder activists argue they are making a business case, not just a moral case. Companies, they say, could be exposed to serious liabilities in the future for their foreign activities if they do not comply with international standards of corporate conduct, even when those rules do not apply locally.

Holger Rothbauer, a spokesman for the shareholder activists, says the decision to investigate in the Argentine case marks a changing attitude in corporate management. "It shows a shift in approaching critical issues by actively disclosing a part of one's own history instead of hiding and disputing," he says.

Amnesty International welcomed the decision by DaimlerChrysler, saying that "[States] can be - and often have been - encouraged, supported, aided, and assisted by other actors including companies, whose actions or inaction can improve or deteriorate the human rights situation in a country."