The Chinese University of Hong Kong MBA Programmes

“Management: Competencies and Current Perspectives Corporate Responsibilities in the Area of Human Rights” — Speech by Ms Anna Wu, Chairperson, Equal Opportunities Commission


It is a great pleasure for me to be here today. I especially welcome this opportunity to discuss with you the linkages between business and human rights.

We live in an age of major social and political realignment brought on by technological changes and globalisation of the economy. The advent of a global economy brings people of the world closer together than ever before. Globalisation has the effect of shrinking space and removing borders. Organisations in both the private and public sectors need to explore ways to better serve their constituents and customers.


After years of boom and expansion, the economies of Asia faced a sudden contraction. The economic crisis had severe political ramifications and social and human rights consequences. The political foundation of several key countries in Asia have been shaken. Countries that experienced decades of rapid economic growth suddenly faced steep declines in GDP of up to 20%. The devastating social consequences include:
• acute food shortage,
• massive unemployment,
• acute shortages in medical supplies,
• reduction in public spending in areas such as health, housing and education,
• sharp price rises for essential items,
• shrinking purchasing powers.

The World Bank estimated that some 400 million people were affected. Widespread discontent caused instability and undermined development.

Out of the crisis came the discussion that sustainable development must be built on the basis of equity, human rights and good governance. These issues must be introduced into the globalisation agenda and perhaps human rights and economics will have a chance of converging.

Needless to say, sensitive and appropriate tools of convergence are essential to reconstruct viable economies and stable communities in a region as diverse as Asia. Asia is the largest continent in both size and population. It covers almost a third of the world's land area and has about 60% of the world's population. There is a wide variety of ethnic groups and religions and about 1500 languages. There is an assortment of political, economic and cultural systems.


How does Hong Kong fit into this picture of the Asian reconstruction? Let me set the scene by firstly saying something about Hong Kong.

Hong Kong was a small fishing community in the South China Sea prior to colonisation by Britain. In 1842 as a consequence of the war over the opium trade, Hong Kong was ceded to Britain to fill its need for a trading post. In the ensuing 150 years, Hong Kong experienced a great deal of change. The territory attracted large droves of refugees from Mainland China and other Asian nations from early 1900s to mid-1940s, was occupied by Japan during World War II, underwent rapid economic expansion from 1950s onwards and finally reverted back to China on 1 July 1997 to become the Hong Kong Special Administrative Region (HKSAR) under THE "one country, two systems" policy.

Economic development in Hong Kong began with the establishment of light manufacturing in the 1950s. Textiles, electronics, watches, and many other goods have all helped put the "Made in Hong Kong" label onto the world markets. While much of the manufacturing is now likely to be done across the border and beyond, Hong Kong remains a focal point for a huge import-export trade.

Today, Hong Kong serves as one of the world's major financial centres and it is the first developing economy to enter the world's top 10 economies. It is home to the largest community of multinational firms in Asia outside of Japan. More than 2,000 multinational companies maintain regional offices or headquarters in Hong Kong. These multinational firms have played important roles in Hong Kong's economic development. Similarly Hong Kong's homegrown companies have become increasingly global.

As Hong Kong becomes increasingly globalised, the ethnic make-up of its community is likely to continue to change. We have several kinds of Chinese alone: Hong Kong Chinese, Mainland Chinese, Taipei Chinese, and not to mention the other overseas Chinese such as the ABC (American- or Australian- born Chinese) or the BBC (British-born Chinese). Hong Kong is also home to a very diverse range of communities from the Philippines, Indonesia, Thailand, Nepal, Pakistan, U.K., Japan, Europe, America, Canada, Australia, New Zealand, African, Korea, Bangladesh and Sri Lanka. We also have many Indian and Jewish families that came to Hong Kong as refugees from Shanghai and other major cities in China, the same way many Chinese families did. The racial diversity provides a unique value. It is our link to our trading partners outside Hong Kong and strengthens Hong Kong as a global trader.

Hong Kong's economy was built on trade and a refugee population. Hong Kong has no natural resources of any kind, above ground or underground, what it does have is people, the human capital. Hong Kong now has a 6.7 million strong population and is a cosmopolitan and multicultural society.

The Chief Executive's Commission on Innovation and Technology sums up the importance of human capital to the development of Hong Kong in its final report in 1999 as follows:

Human capital is the single most important factor supporting Hong Kong's development into a knowledge-driven and technology-intensive economy… Bringing in additional intellectual capital would boost economic growth and employment in the same way as external financial capital contributes to the economy…in its post-war economic development Hong Kong has benefited significantly from a large pool of entrepreneurs and skilled and motivated workers from the mainland. In addition, Hong Kong has a sizeable expatriate business community which brings to Hong Kong new ideas, technical know-how and advanced management practices from all over the world. These are important contributing factors to the development of Hong Kong into the international business centre that it is today.

The maintenance of its business environment and of its human capital is dependent on a framework rooted in the rule of law. Hong Kong is, uniquely, the only Chinese city in the world that has a common law system. The rule of law is important for protecting individual rights and to providing a level playing field for both individuals and businesses. It is a system that provides for fair competition and non-discrimination under trade law and equality and non-discrimination under human rights law. The rule of law is designed to allow the different spheres of interest to co-exist without one overriding the other. It is the foundation of a stable society.

As citizens of a global village, we are judged by a global audience. Hong Kong, in its aspirations to be a world class city, is judged on its social and human rights record, in addition to its financial strength.


The process of globalisation has had a dramatic impact on the world economy characterised by intensified economic interdependence and competition on a global level. The 20th century saw unparalleled economic growth, with global per capita GDP increasing almost five-fold (IMF, 2000). But in recent years, there has been a backlash against globalisation because the economic progress is not evenly dispersed. The recent violent protest held during the G8 Summit in Genoa, Italy is yet another visible sign of the growing discontent in some quarters of our society. The gaps between rich and poor countries, and rich and poor people within countries, have grown. The push for competition, deregulation, privatisation and open capital markets is found to have undermined the economic prospects for many of the world's poorest people.

The power of the corporations in an open border scenario can be enormous. Some multinational corporations have greater wealth and power than states and can play one state against another. This can result in exploitation of people, deprivation of rights, damage to health and devastation to the environment. The UN Research Institute for Social Development (UNRISD) in a report noted that the annual sales of one multinational corporation exceeds the combined gross domestic product of Chile, Costa Rica and Ecuador.

The weaknesses of globalisation are acknowledged internationally and point to the fact that businesses can no longer operate without some focus on social accountability. The fact is: businesses do impact on individuals, communities and the environment. Hence, there must be a framework which allows economic development and benefits from economic progress to be more equitably distributed between places and people.

There is the added argument that globalised economic forces have not just the means to address poverty but also the obligation to do so due to the international obligations which exist under various rights Covenants.

At the international level, the United Nations Secretary-General, Kofi Annan, challenged world business leaders at the 1999 Annual Meeting of the World Economic Forum at Davos, to initiate a Global Compact of shared values and principles to give a human face to the global market. For the community in Hong Kong, we have been advocating three principles of the Global Compact:

• Business should support and respect the protection of international human rights within their sphere of influence; and
• Make sure their own corporations are not complicit in human rights abuses; and
• Eliminate discrimination in respect of employment and occupation.

Removing trade and investment barriers open up markets and provide new opportunities but this can also leave countries vulnerable to global economic changes. These can be in the form of exchange rate fluctuations, wage differences and commodity price variations. Globalisation brings with it greater vulnerability to external changes and the danger increases with the lack of sophisticated financial, economic and social structures and institutions in developing territories to give them stability.

In extremely poor and totalitarian countries, globalisation has made international arms transfer easier. This is really double jeopardy because the transfer intensifies armed conflicts elsewhere. Globalisation has also made it easier for international traffic in drugs and human beings and for dumping of environmental waste in poorer areas. These are some examples of the negative aspects of international trade made easier through globalisation.


I would like to refer to some positive initiatives currently underway. The World Bank has initiated an institution-building agenda within its aid program for developing nations, such as instituting judicial reforms for the protection of human rights to achieve more sustainable and broad-based economic growth. The World Bank has learnt that 'even in countries with a very strong growth performance, corruption, weaknesses in the financial sector and in corporate governance can undercut their economic achievements; hence even in countries which will be "emerging markets" in the next generation, we need to focus now on building proper legal and regulatory frameworks, and strong institutions. We cannot delay this work.' (The Bank's Managing Director, Sevn Sandstrom, in an address to the Bretton Woods Committee in Washington on 13 February 1998)

The IMF, has also accepted the need to alleviate "the social costs of adjustment, including through strengthening the social safety net and encouraging a social dialogue among employers, employees and government".

In June 2000, the Organisation for Economic Co-operation and Development (OECD) Ministers endorsed the revised "Guidelines for Multinational Enterprises", which set out voluntary principles and standards of responsible corporate conduct in areas such as the environment, labour standards and human rights.

The Asia Development Bank in its aid program to Indonesia stipulated a condition that the loan, provided for basic education, must be spent on equal numbers of boys and girls. Aid programs, measures to stabilize communities and to sustain development, now approach economic development increasingly from a rights perspective. International bodies now make human rights a component for business and economic development.

A new project to be launched at the World Conference Against Racism, Racial Discrimination, Xenophobia and Related Tolerance in Durban will continue to build on the theme that human rights is business for all and discrimination is everybody's business. Mary Robinson, the United Nations High Commission for Human Rights and Secretary General to the World Conference is actively soliciting the business community's involvement. The long term goals are to forge partnerships between business, governments, NGO's, national institutions and other parts of society to combat discrimination and promote diversity. A good example of this is the Volvo Car Corporation which has initiated a multi-stakeholder Workshop for building tolerance, acceptance and a culture of human rights and promoting diversity and appreciation of difference.

International law has now also raised the prospect of using international human rights covenants, such as the right to health, to mitigate against the restrictions created by patented drugs for HIV/AIDS treatment and allow generic drugs to be produced. This is one example where various international covenants can be used as a shield against the encroachment of unmitigated globalisation and patented monopolies.

The right to health has prompted two other actions under international law.

The first relates to hormone beef the second to asbestos.

In the first case the EC wanted to restrict the importation of hormone beef in the belief that it represented a health risk. Canada and USA, the exporters, did not agree. Ultimately the WTO Appellate Body, although acknowledging that hormone abuse could constitute a health risk, did not agree with the position of the EC in adopting precautionary measures to protect consumers.

However in a second case, involving asbestos, the Appellate Body ruled that a ban imposed by France on the import and use of white asbestos was legitimate and that the WTO rules allow countries to impose restrictions on trade where necessary to protect human health and the environment.

Although these two decisions may appear contradictory they do demonstrate clearly that human rights considerations have now begun to impact upon global regulatory bodies and international trade negotiations and in corporate boardrooms in a way that will make them not just relevant but, hopefully, binding.


In response to growing investors' interest in sustainable development, we now have different global indexes and studies tracking sustainability in the world of business. The Dow Jones Sustainability Group Indexes (1999) track the performance of companies in terms of economic, environmental and social criteria. These track the top 10% of companies that lead their industry in terms of economic, environmental and social criteria.

Social audits of companies are now undertaken to meet the demands of shareholders. Influential, non-aligned watchdogs that scrutinise the social responsibility performances of corporations now include Business for Social Responsibility in the US, Corporate Social Responsibility – Europe and specialised units within Amnesty International and the Lawyers Committee for Human Rights. In the UK, some 700 companies have joined a "Business in the Community" campaign, committed to creating a positive impact on society. Many of these companies have also formed a network, "Race for Opportunity", to work on race and diversity as a business agenda. These include large corporations such as Barclays bank, BBC, British Telecom, HSBC, Goldman Sachs, Shell International Ltd., and Texaco, to name a few. About 400 companies, mainly from the Fortune 500 Group have signed up to join the Global Compact. Two major Hong Kong companies, the Hongkong and Shanghai Banking Corporation and the Esquel Group, have also joined the lengthy list.

Businesses need to recognise that social accountability can be used as a tool for improving business performance. Far from being diametrically opposed, a strategy pairing business interest with social accountability can drive the globalisation process.

These global market pressures provide the impetus for investors to be sensitive to the social development of each market to avoid rejection of its services and products and to reduce investment risks.

Increasingly, corporations are required to operate in a fair, transparent and accountable manner. Numerous public and private bodies have responded by establishing standards and norms related to important aspects of corporate governance.

Social expectations regarding companies in recent years have changed dramatically. Business now recognizes that increasingly consumers are demanding that the foods they eat, the clothes they wear and the products they use daily are manufactured under ethical working conditions. These include fair employment opportunities for men and women, fair wages, a safe working place and a clean environment to name a few. Market share and brand name value depend on consumer acceptance of a company's employment policy, servicing standards and manufacturing conditions. Failures in these areas can sometimes lead to consumer boycotts and brand names can be destroyed overnight.

Social accountability and marketability are becoming more and more entwined, and rights advocates recognise that industries and business create jobs and they must become a partner in the advancement and development of a community.

The global business can bring in a large body of policies to benefit the local economy. For instance, a business can upgrade local skills through training on the job. Shell Brazil was honoured as a "Child's Friend Company" for its corporate policy of not doing business with companies that use child labour. Business can require its contractors to adhere to ethical practices. Business can be an agent and a partner for societal development. Increasingly human rights advocates have come to recognise this value as businesses have come to recognise that social accountability is a tool for improving business performance. The fact is: business does impact on individuals, communities and the environment.

Governments will have to take up their role to reduce poverty and to meet the challenge of globalisation and the demand for trade liberalisation. Enhancing the human capital and enabling the individuals in a community to compete effectively must be some of the primary tasks for a government. A diversity and equal opportunities policy provides the right kind of framework for the development of a community's human resources and thus help to sustain its long-term development.

Government, as the biggest supplier and service provider, can also develop corporate governance initiatives to instil human rights concepts in business. Not that long ago the Hong Kong Government announced it was considering a new employment tendering system that gave 40% weight to working conditions and 60% to prices for all government contracts. We welcome this as a step in the right direction. We propose that Government provide incentives to tendering parties who can demonstrate adherence to equal opportunities principles.


In the employment world, the concept of equal opportunities means matching the right person with the right job. We focus on people's abilities, not on their gender, marital status, or other irrelevant criteria. When the best person hired for a job happens to be a person with a disability, or a woman, he or she will also identify the market niche and bring in new business. Let me give you a glimpse of what may be possible:

A number of travel agencies in Japan are marketing barrier-free tours for the physically disabled. Theses packages are specially designed in areas such as transportation, meals, choice of destination and even assistance in the immigration of guide dogs. A tailor-made wheelchair tour of Los Angeles includes in its itinerary visits to a research centre for spinal-cord damage, a rehabilitation hospital, a healthcare equipment store as well as a chance to watch a wheelchair-basketball practice. Another example is a travel plan for people with diabetes, which offers special menus and a nurse on duty throughout the whole trip. Meanwhile in Australia, for the first time in their lives, those who are totally visually impaired will have their first secret ballot when a company introduces the option of voting online. It will be the first major election in Australia with an online component in addition to the traditional way of using a postal ballot paper.

An example of the benefits of workforce diversity can be demonstrated in the story of the rise in fortunes for a telecom company (CTI) in Hong Kong. About four years ago, this company saw an opportunity to expand its business in Canada because of the vast number of Hong Kong people who had emigrated to Canada. The company's marketing strategy included leaflets in Chinese and, for new customers, a promise to deliver moon cakes during the Mid-Autumn Festival to relatives back in Hong Kong. The strategy proved very successful and this Hong Kong-based company was able to secure a market share in a foreign country. In the wake of this success, a Canadian telecom company started recruiting Hong Kong staff to market their services but by then, they had already lost the competitive edge. The crucial element here is that the employees were able to understand the needs of the customers and weave these into the marketing plan.

In Hong Kong we are campaigning for "IT for all" on the basis of individual right and market share. IT must be accessible to people who are visually impaired and people without the dexterity to control the keyboard because everyone has the right to information. Accessibility also means business, it means market share with a captive consumer base. People with disabilities will rely on IT not only to seek information but also to conduct electronic transactions daily. And it is IT that will bridge the gaps for them. Similarly, we are advocating barrier free access to shopping plazas because wheelchair users are loyal customers.

In early April this year, Telstra, Optus and Vodafone in Australia have each launched innovative new schemes to address problems faced by people who use hearing aids in accessing their mobile phone networks. Many hearing aid users cannot access GSM mobile phones because of electromagnetic interference between their hearing aid and mobile phone, and have experienced accessibility problems since the closure of the largely accessible analogue network. This new move will not only maximise the use of networks for customers with hearing aids, but the companies will have an edge over others in terms of opening a new market niche as well as improving their image and increasing brand loyalty.

Business is also looking more and more closely at women as a market as they are consumers and spenders for the household. More women are now buying insurance and financial products and business must cater for their needs to increase the market share.

You can see that equal opportunities means business, women and persons with a disability create markets.

Many overseas companies have found that equal opportunities policies have positive impact on sales as well. For example, Pizza Hut in Australia recorded sales increases directly attributed to brand loyalty through the employment of people with a disability.
Apart from businesses developing in line with social aspirations, these measures have the potential of increasing market share and enhancing brand name value. Last year, a survey conducted by Edelman PR Worldwide found that non-governmental organizations (NGOs), such as Greenpeace and Amnesty International, have earned a greater level of trust than some of the most well-respected global multinational companies such as Ford and Microsoft. It is noteworthy that the respondents were well-educated, media attentive individuals between the age of 34 and 64 from five industrialised countries (U.S., U.K., France, Germany, and Australia). These are indications that consumers are becoming more sophisticated and are increasingly taking account of social accountability issues. Similarly, shareholders too, are likely to be interested in these same issues.

Ethical investment is becoming a real business. According to a study by Covenant Investment Management in 1996 on Standard and Poor's 500, it found that the annualised return for the 100 companies which rated lowest in equal employment opportunities issues averaged 8%, compared to 18% for the 100 companies that rated highest in their equal employment opportunities. The figures are clear: diversity pays. Today, 93% of Fortune 500 companies have instituted diversity programmes in their organisations.


Australia and the United States have now started to propose legislation on human rights related corporate responsibilities. These aim to regulate domestic corporations operating overseas and prescribe acceptable conduct in the areas of labour rights, environmental concerns, anti-discrimination policies and others. There are also consequential reporting obligations. The American Bill also proposes to provide incentives such as preference in awarding government contracts and trade and investment assistance to corporations that behave well. These proposals have extra-territorial effect.

A very old American statute, the Alien Tort Claims Act 1789 has now been resurrected to find liability on the part of American registered corporations for acts done with foreign governments in violation of internationally recognised human rights obligations.

The aggressive courts have now taken the position that corporations cannot practise double standards in the way they run their business domestically and overseas. The effort to corporatise human rights has begun. Corporations will now have to exercise due diligence in the area of rights in that management may be subject to liability for violations occurring overseas. Possible claims in this area may be matters for reporting and disclosure to shareholders and investors.

Increasingly, state obligations under covenants and international instruments are being used to argue in favour of rights protection. Governments which have failed to provide adequate remedies may become liable vicariously for the acts of private parties subject to its jurisdiction.

Vicarious liability in the Hong Kong context can possibly be argued against government for race discrimination, for instance. The government is obliged under both the International Covenant for Economic, Social and Cultural Rights and the International Convention on the Elimination of All Forms of Racial Discrimination to prohibit discrimination on the ground of race. Conceivably a victim in the private sector may sue the government because it has failed to enact a specific law to protect the victim against race discrimination.


At this juncture, I would like to talk to you about the EOC, our values and our work, and how these relate to a diverse environment in which business operates.

Legislation against discrimination in Hong Kong has been in effect since 1996. The three anti-discrimination laws currently enforced in Hong Kong are the Sex Discrimination Ordinance (SDO), the Disability Discrimination Ordinance (DDO) and the Family Status Discrimination Ordinance (FSDO). Under these ordinances, discrimination on grounds of sex, pregnancy, marital status, disability and family status are unlawful in the fields of employment, education, provision of goods, services and facilities, clubs and activities of government. We are a statutory body established in 1996 to administer the three ordinances.

Providing equal opportunities to all and eliminating discrimination are aspects of the rule of law in that every individual is equal before the law. On the collective level, an equal opportunities environment is about using human resources effectively and developing our human capital.

The purpose of equal opportunities law is to provide a framework for the individuals to sustain life and to develop. Development leads to self-sufficiency and independence. This in turn leads to reduced dependency on social security.

One of the most basic and effective developmental tools for individuals is the provision of basic education. It is the first important step towards shaping our future. As most of you would be aware, we have just finished the court case regarding the Secondary School Places Allocation System. The court found that the system treated both boys and girls unfairly but more girls than boys were adversely affected. The system has been in use for over 20 years. The simplest way of explaining the system is that it gave preference to the top 30% boys in entering the best schools. It penalised the interest of the bottom 70% boys and the top girls. Some say it is a technical win but it is not. The court decision has brought out many significant educational issues, such as how boys should be taught and how girls and boys should be assessed fairly. Human rights and the rule of law are never technical because they are designed to serve the interest of individuals and not allow one sector of interest to override another. I make reference to this case because it is so important to get our education system right. It determines the quality of our human capital.

That said, I would like to tell you a little about what we are doing in the areas of promoting acceptance of good practice in the business sector.

The EOC sees training and education as the key to achieving greater awareness of equal opportunity principles in the business sector. Consequently the Commission has expanded its training services to assist business to achieve better compliance with equal opportunity laws. Over the next 12 months training modules, train the trainer programs, advice and assistance on compliance and practical implementation of the EO ordinances will become available.

Identifying the current level of understanding and compliance regarding Hong Kong's equal opportunity laws is also an important aim of the EOC. We are currently conducting a series of business surveys targeting both medium to large and small to medium enterprises to identify how they are currently complying with the legislation.

The surveys will also seek input from the business sector on issues such as the difficulties they face in complying, what type of further assistance they might require and what model of support the business community favours to enable them to maintain and expand EO good practise.

The research work will help shape the development of an information kit for small to medium enterprises. As this sector represents almost 80% of employers in Hong Kong it is critical we can convey the message of the importance of good equal opportunity business practise. The kit will be straight forward and aims to provide SME's with a simple step by step guide on current laws, assessing their existing practises and procedures and what steps to take to better meet obligations imposed by the law.

A number of industry specific initiatives are also underway.

We are in the process of developing a discussion paper on the Hong Kong Insurance industry which will shortly be released for public comment. It aims to identify current general practices as well as issues of discrimination within the insurance industry.

The Commission is currently convening a working group jointly with the Hong Kong Association of Banks. The aim of the working group is to study and recommend ways of removing barriers for people with disabilities for access to banking services specifically IT based services such as Internet banking, phone banking and ATMs. This project is likely to have broader application in that it may identify the need for IT related service directories and codes for the industry which will be applicable across the private sector.

The EOC is planning a series of meetings with Hong Kong building developers and architects to fully explain the requirements of the Disability Discrimination Ordinance to enable them to have the appropriate EO perspective in their building and construction plans.


Equal opportunities are about people. The EOC is therefore in the people's business. Our messages are:

For the individual
• Everyone has the right to sustain life and to develop one's potential

For the business sector
• Social accountability means marketability. Equal opportunities make good business sense.

For the community
• People are the valuable asset of Hong Kong. Equal opportunities are about the advancement of our human capital which is the only way to sustain our development.

Professor Amartya Sen, the 1998 Nobel Laureate for Economics, argued for concentrating on the equity and efficiency of social arrangements in promoting freedom to achieve objectives and capabilities of individuals. To borrow his words:

"The rewards of human development go…well beyond the direct enhancement of quality of life, and include also its impact on people's direct productive abilities and thus on economic growth on a widely shared basis…."

Human rights is about the business of people and human rights is not just an agenda for some but must be made a business for all.