SXL3121: Company Law

Summative Assignment

Due date: 9th March 2012

“Critically discuss the notion of corporate social responsibility giving particular attention to minimum legal expectations”

Corporate social responsibility can be best defined as:

“[…] directly related to giving a name to the idea that corporations should engage in activities that

are more than shareholder wealth maximisation or ‘strictly business’. Instead, companies, in

addition to their economic responsibility at the bottom of the corporate responsibility pyramid,

should have legal, ethical and philanthropic responsibilities”1.

I’ll be incorporating comparatives from different jurisdictions, notably Australia and China. China’s

acknowledgement of CSR2 is relatively new and in light of the recent controversy over the Apple

Foxconn factories3 and historically, in the oil industry4, it is relevant. In exploring the statutory

minimum legal expectations, I will argue that CSR is just a voluntary and moral expectation, rather

than a legal one. I will bring in the argument that it depends on the area of business that the

company is involved in and its level of multinational integration that affects which CSRs are

neglected, or reinforced. This will be illustrated through a consideration of Australian mining

companies and Apple’s take on CSR. In examining these practical applications it is evident that;

international regulation, the media and civil society groups play a very important role in advocating

and forcing companies to take corporate social responsibility seriously. As one commentator on the

infamous James Hardie inquiry of 2004 said:

1 A.B. Carroll, “The pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders” (1991) 34 Business Horizons 39.2 Referred to as ‘CSR’ throughout the rest of this essay. 3 February 9th 2012, Lamson Consulting. http://lamsonconsulting.com/blog/?p=197 [Accessed February 25th, 2012]. 4 Documentary: “China vs. the US – The Battle for Oil” (2007-SDTV-d0x).avi

“Shamed by unions, governments and victims, publicly flogged by the media, the subject of a special

commission and ultimately brow-beaten into appropriately compensating its victims”5

UK Companies Act 2006, the minimum legal requirements:

In the UK, directors of companies owe certain duties towards the company6 for which they direct or

formerly directed7. These duties are contained in Chapter 2, sections 170-177 of the Companies Act

2006. They are: the duty to act within powers8; duty to promote the success of the company9, the

duty to exercise independent judgement10, the duty to exercise reasonable care, skill and diligence11,

the duty to avoid conflicts of interest12, the duty to not accept benefits from third parties13 and the

duty not to declare an interest in a proposed transaction or arrangement14.

These sections set out the minimum legal expectations owed to the company under UK company

law. They are an amalgamation of fiduciary and common law duties. The rational is that a director is

seen as a trustee, whose role it is to protect and preserve the assets for the company, as well as an

entrepreneur, who has a duty (amongst other duties) to exercise reasonable care, skill and diligence

within this function15. The legislature had to balance precision with a need for flexibility 16, so that

there was room for development - should situations that were not contemplated arise 17. Due to this 5 Elizabeth Knight, “Victory for ASIC over Hardie, but how big and for how long?”, (April 24, 2009), Sydney Morning Herald. http://www.smh.com.au/business/victory-for-asic-over-hardie-but-how-big-and-for-how-long-20090423-agsh.html [Accessed March 4th, 2012]. 6 Section 170 (1) the general duties specified in sections 171 to 177 are owed by a director to the company. Therefore under the principle established in Percival v Wright, the shareholders have no cause of action against the directors for breach of their duties. 7 Section 170 (2) A person who ceases to be a director continues to be subject –

(a) To the duty in section 175 (Duty to avoid conflicts of interest), and(b) To the duty in section 176 (Duty not to accept benefits from third parties).

8 S.171 Companies Act 2006.9 S.172. 10 S.173.11 S.174.12 S.175.13 S.176.14 S.177. 15 Compiled by Aled Griffiths, ‘Company law’, pg.152.16 The explanatory notes to the act identify this difficulty: “Frequently the courts may formulate the same idea in different ways. In contrast legislation is formal. It is not easy to reconcile these two approaches but the draft sections seek to balance precision against the need for continued flexibility and development” (at para 305). 17 “[...] it is clear that achieving an accessibility policy goal had to be balanced against the need for judicious drafting to ensure that the duties were sufficiently flexible to be applied to a wide range of circumstances. This

‘broad-brush drafting style’18 confusion arose when considering the implications of s. 170 (3)19 and s.

170 (4)20 because sub (3) implies that pre-existing common law and equitable rules are to be

replaced, whereas sub (4) states that statutory duties are to be understood and applied in the same

manner as the rules and principles they replace. Lord Hodge in Eastport v Gillespie21 made clear the

position22.

So, the relevant provisions replace pre-existing law, although s. 170 (4) directs the courts to have

regard to the pre-existing case law when interpreting and applying the general duties23.

When considering CSR s. 172 of the 2006 Act is particularly important and will be the focus of this

essay. It sets out that the company must act in ‘good faith’ as Foster J said in Dorchester Finance v

Stebbing24. S.172 states:

“A director of a company must act in the way he considers, in good faith, would be most likely to

promote the success of the company for the benefit of its members as a whole”25.

necessitated a relatively broad-brush drafting style”. [Ahern Deirdre, “Directors’ duties, dry ink and the accessibility agenda”, Law Quarterly Review (2012)]. 18 Ibid. 19 “The general duties are based on certain common law rules and equitable principles as they apply in relation to directors and have effect in place of those rules and principles as regards the duties owed to a company by a director”.20 “The general duties shall be interpreted and applied in the same way as common law rules or equitable principles, and regard shall be had to the corresponding common law rules and equitable principles in interpreting and applying the general duties”.21 [2009] CSOH 119.22 “Parliament has directed the courts not only to treat the general duties in the same way as the pre-existing rules and principles but also to have regard to the continued development of the non-statutory law in relation to the duties of other fiduciaries when interpreting and applying the statutory statements. The interpretation of the statements will therefore be able to evolve. The statutory statement of the general duties of directors is intended to make those duties more accessible to commercial people”. [para 8 of judgement]. 23 Remedies for breach of duties include: (1) damages or compensation where the company has suffered loss; (2) restoration of a company’s property; and (3) an account of profits made by a director, and rescission (i.e. treating any contract made by the director as if it had not existed) where the director has failed to disclose an interest.24 [1989] BCLC 498 PER Foster J: “A director must exercise any power vested in him as such, honestly, in good faith and in the interests of the company” [pp. 501-502]. This is codified in s.172. 25 S.172, Companies Act 2006.

In promoting the success of the company the director should have regard to a list of aspects 26.The

wording of the section27 suggests it is a non-exhaustive list and therefore others should be

considered if the situation requires it.

CSR is a voluntary and moral expectation, not a legal one:

It is therefore arguable that the fact that a director need only have ‘regard’ for the above aspects,

means that it lacks a definite legal requirement to act on these conditions. Although CSR is given

statutory effect by the Companies Act 2006, the primary duty of the director(s) has historically

always been to make profit for the company and as a result these requirements usually get

overlooked. As will be illustrated, the ‘enlightened self-interest’28 approach is advisable for

companies that want long-term success and should therefore, adopt good CSR practices29. But it

seems to only be a moral30 requirement with which to mitigate ‘reputational risk’31, rather than out

of any real legal duty to do so. This point will be illustrated by a consideration of multinational

companies through the argument that the level of CSR integration seems to depend on: (a) the type

of industry in which the company operates and (b) the degree to which the business has

internationalised in an operational and/or market sense32. Firstly by considering ; Meredith Jones et

26 (a) The likely consequences of any decision in the long term,(b) The interests of the company’s employees,(c) The need to foster the company’s business relationships with suppliers, customers and others,(d) The impact of the company’s operations on the community and the environment.

(e) The desirability of the company maintaining a reputation for high standards of business conduct, and (f) The need to act fairly as between members of the company 27 Section 172, Companies Act 2006: “[...] have regard (amongst other matters) to”. 28 “That is, beyond the obligations of companies to comply with laws, it is likely to be in to be in the company’s own commercial interests, in terms of long-term value creation and risk reduction, to take into account the environmental and social context in which it operates” [Corporations and Markets Advisory Committee, “The social responsibility of corporations report (December 2006)]. 29 Many scholars also argue that CSR suggests that those companies who promote the interests of society will tend to be financially successful, especially in the long-term [See: M Orlitzky, ‘Corporate Social Performance and Financial Performance: A Research Synthesis’ in A. Crane, A. McWillams, D. Matten, J. Moon and D. Siegel (eds) The Oxford Handbook of CSR (Oxford: Oxford University Press, 2008) p. 133]. 30 And an almost voluntary adoption of CSR practices.31 Meredith Jones et al: “Corporate Social Responsibility and the Management of Labour in Two Australian Mining Industry Companies”, pg. 59, Volume 15, Number 1, January [2007]. 32 Ibid.

al33 multinational Australian mining companies34 and secondly, Apple’s CSR failings in their factories

in China.

Australian Mining Companies and Technology giants Apple:

The two mining companies, known as Rio Tinto and BHP Billiton were the focus of the paper. The

reason for this is that both companies had undertaken controversial policies 35 and activities prior to

and during the restructuring in becoming multinational companies36. They voluntarily adopted a

large amount of second class instruments37, in the aim that the adoption of CSR policy would “[…]

offsetting or softening criticisms of their corporate governance practices and business activities”38.

This is the first illustrative example and reason for why CSR integration is simply moral and voluntary

because it was incorporated for the reason of diluting its former practices39.

It was the ‘reputational risk’ that the companies faced which was a key for integration of such

policies. These reputational risks arose because mining companies deal with finite non-renewable

resources and a diverse range of environmental impacts, and therefore, subject to a higher

reputational risk - predominantly in relation to how effectively they integrate and account for

environmental concerns40. Furthermore, the mobility of a mining company is limited to the location

33 Meredith Jones, Shelley Marshall and Richard Mitchell’s: ‘Corporate Social Responsibility and the Management of Labour in Two Australian Mining Industry Companies’, Volume 15, Number 1, January 2007.34 Rio Tinto and BHP Billiton.35 BHP Billiton in the 1990s had been under financial pressure and had therefore begun to implement a controversial industrial relations policy, mirroring, to some extent, that of its competitor Rio Tinto. This included a strategy of de-collectivisation and individual contracting. In 1998, Rio Tinto came under pressure from the International Federation of Chemical, Energy, Mine and General Worker’s Unions.36 They were becoming companies that operated in many different countries that crossed both legal and cultural borders. 37 Notably: FTSE4Good, SA8000, Dow Jones Sustainability index. All of which, will be considered further on to see whether their adaption made or could have any actual impact on the CSR. 38 Meredith Jones et al, pg. 57. 39 It was not incorporated for the reason that they were legally bound to do so, or that they felt it would be good social business practice to do so. 40 “Tilt and Symes, (1999) have noted that the finite nature of non-renewable resources, the diverse environmental impacts associated with their extraction, the particular economic importance of primary extraction, and the social impacts on local communities associated with mining activities are among the most important factors”. [Meredith Jones et al, pg. 59].

of the resources41; it is therefore a long-term investment42 that may have a perpetual impact upon

locals. It is therefore integral to possess good CSR practices and to have a concern for the impact of

operations on the community and environment. The cost appears to be a slackening in other CSR

practices. These were; the labour management and rights of the workers in relation to union

membership.

It was identified in this study that companies, including Rio Tinto and BHP Billiton, wanted to be seen

as adopting CSR practices but in reality, few actually integrated and committed to such practices

effectively. In concluding, it was argued that although it is hard to pin-point the exact effect of CSR

on labour management, both companies made very bold commitments to the principles of freedom

of association and collective bargaining as part of their CSR policies. Yet neither company has acted

consistently in line with these commitments43.

For the reasons outlined above, CSR should be of paramount importance for such companies on a

multinational scale and companies shouldn’t have to get to the point of public/international critique

before actually aiming to enforce good CSR practices. Although they committed and adopted many

policies44 and had some success statistically45, in practice they failed to deliver. It is evident that the

reputational risk that comes within this type of industry and the degree of multinational aspiration,

did contribute somewhat to CSR policies being adopted, albeit imperfectly46.

41 “Whilst operations may be global, mining companies must operate where the resources lie” (Allem, 2003).42 “Mining companies are less able to use the threat of exit in negotiations with unions or with governments. As a result of the long-term nature of operations, they may be more vulnerable to the claims of stakeholders” [Meredith Jones et al, pg. 59]. 43“Equally, it must be said that there is no clear indication that the labour management systems of Rio Tinto and BHP Billiton are evolving towards the kind of innovative workplace systems which would also, or in the alternative to collective structures, register as “desirable” practices in a CSR sense”. [Meredith Jones et al pg. 65].44 Notably Rio Tinto became an international signatory to the UN Global Compact, and endorsed the UN Universal Declaration of Human Rights and the US/UK Voluntary Principles on Security and Human Rights. As well as many other environmental indexes (see footnote below)45 They ranked highly in both the Business in the Environment annual Index of Corporate Environmental Engagement and the Business in the Community Index Corporate Social Responsibility Index.46 “At best then, it might be said that the adoption of CSR policy may have altered slightly some aspects of what otherwise appears to be trenchantly anti-union and unenlightened approach to employment relations”. [Ibid pg.62].

When considering technology giants Apple, it appears that similar issues arise with regards to the

actual enforcement of CSR policies when the annual reports clearly outline the problems. These

issues arose because of the suicides of workers at Apple Foxconn plants. With technology companies

it seems that supply and demand outweigh the working and living conditions of its employee’s. 47

Former executives of Apple have said that the executives want to improve conditions within

factories, but the dedication falters when it conflicts with crucial supplier relationship or the fast

delivery of new products48. Even though Apple achieved record breaking profits, the executive said

that sales would have been higher if overseas factories had been able to produce more 49. Again, this

is an example of the duty to make profits outweighing the other duties of the director.

Apple does have a code of conduct50, as well as annual supplier responsibility reports51 which outline

that Apple does implement certain CSR reports. As chief executive Tim Cook said: “Workers

everywhere have the right to a safe and fair work environment [...] which is why we’ve asked the FLA

to independently assess the performance of our largest suppliers”52.

The results of the LPA will be published in March but they will likely detail issues that are known to

exist. After the Mail on Sunday exposed a factory in 200653, Apple conducted audits every year. More

than half the suppliers audited by Apple have violated at least one aspect of the code of conduct

every year since 2007 and in some cases violated the law, according to the social responsibility

reports. A summary of the 2012 audit states that the issues have pertained: 54 The same issues have

47 Executives at other companies, not just Apple, have also identified these similar problems. Acknowledging that This system may not be pretty, they argue, but a radical overhaul would slow innovation. Customers want amazing new electronics delivered every year. [See: http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?_r=1&pagewanted=all]48 Charles Duhigg and David Barboza, “In China, Human Costs Are Built Into an iPad, The New York Times, published January 25th, 2012. 49 http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?_r=1&pagewanted=all50 http://www.apple.com/supplierresponsibility/code-of-conduct/51 http://www.apple.com/supplierresponsibility/52 Rory Cellan-Jones, “Apple factories to face independent inspections”, BBC News, 13 February 2012 http://www.bbc.co.uk/news/technology-17015824. 53 “The stark reality of iPod’s Chinese factories, Mail on Sunday, 18th August 2006.54 “We uncovered some violations and worked with our suppliers to correct the issues” http://www.apple.com/supplierresponsibility/reports.html (paragraph 3)

continued to arise with no legal sanctions or independent bodies challenging the company55, as one

Apple executive stated:

“If you see the same pattern of problems, year after year, that means the company’s ignoring the

issue rather than solving it”.56

Apple’s website states that if an audit reveals a violation, then it must be remedied within 90 days

and make approach changes, “If a supplier is unwilling to change, we terminate our relationship”57.

The fact that these issues58 have been identified by the audit year after year seems evident that

Apple has monumentally failed in its CSR policies. This suggests that CSR is something companies

wish to be seen as adopting, rather than actually implementing. As was suggested above59, suppliers

saying that they will ‘try harder’ is not sufficient, responsible or socially acceptable. One

commentator has suggested, however: “If Apple learns its lesson soon enough, it may even seize the

opportunity to lead growth in social compliance in the tech industry”60.

The Importance of the Media, International regulations and Civil Society

groups in CSR:

With CSR not generally being recognised as a legal requirement but more of a moral or voluntary

one, the media is playing a more important role as a watch-dog. It has exposed companies who

aren’t acting socially responsible and communicating this to the consumer), which can have dramatic

effects61. For a company such as Apple, who relies heavily on its image and having a customer base

55 Unlike the case with the Australian Mining Companies above. 56 “Noncompliance is tolerated, as long as the suppliers promise to try harder next time. If we meant business, core violations would disappear”. Charles Duhigg and David Barboza, “In China, Human Costs Are Built Into an iPad, The New York Times, published January 25th, 2012 57 http://www.apple.com/supplierresponsibility/auditing.html58 Poor pay, poor living and work standards etc.59 “Noncompliance is tolerated, as long as the suppliers promise to try harder next time”60 Apple’s CSR Dilemma: Lessons Learned, February 9th, 2012, Lamson Consulting http://lamsonconsulting.com/blog/?p=19761 As was seen in the sabotage of Nike in the 90’s. Consumers and stakeholder will not tolerate companies being social irresponsible.

that tends to be “young and educated people who are often mindful of social and environmental

issues”62, being reported in such a light, has the very real risk of affecting its customer base.

During the 1990s Rio Tinto was of increasing international concern because of its industrial relations

policy and the impact of its mining operations on both, the environment and human rights. In 1998

they came under fire from the International Federation of Chemical, Energy, Mine and General

Worker’s Unions63. Albeit their efforts were defeated64, it attracted much media attention65. Such

efforts were attributable to why Rio Tinto began to incorporate CSR policies subsequently66.

Another prime example of the importance of the media’s correspondence to the public is in relation

to the James Hardie Inquiry of 200767. Following media coverage and public outrage about the

inadequate arrangements made by JHIL68 to compensate the victims of their asbestos negligence,

the New South Wales Government established an inquiry69. Although JHIL had no legal obligation to

provide such arrangements they were under a moral obligation to do so in an attempt to salvage

their commercial image and CSR. The inquiry indicated that in failing to provide adequate funding

and acting as they did, it resulted in very “adverse results to the public standing”70.

62 “Apple’s CSR Dilemma: Lessons Learned”, February 9th2012, Lamson Consulting.63 International Federation of Chemical, Energy, Mine and General Workers’ Unions (ICEM), Rio Tinto: Tainted Titan 1997 and Rio Tinto: Behind the Façade, 1998. 64 The CFMEU campaigned to make Rio Tinto firstly; appoint an independent, non-executive director to the company’s board and secondly; the introduction of credible workplace code of labour practice based on the core standards of the International Labour Organisation (ILO) [see: http://www.ilo.org/global/standards/lang--en/index.htm, accessed 08th March, 2012].65 Anderson and Ramsay, 2006.66 Meredith Jones et al, pg 60: “Contemporaneously with, and perhaps because of, these developments, the company also moved towards the adoption of a comprehensive CSR strategy”. 67 The James Hardie group of companies dealt in the manufacture and distribution of asbestos products at a time when the link between asbestos and health problems was known. The group’s negligence in the use of asbestos had ceased years before, but the liabilities accrued over the years, and continued to accrue for many years after [See: James Hardie Inquiry, 2004, vol. 1, p.19 at http://www.dpc.nsw.gov.au/data/assets/pdffile/0020/11387/PartA.pdf] 68 They tried to avoid their corporate social responsibility by seeking to shift the cost of their asbestos liabilities to the victims themselves and indirectly to the taxpayer – by utilizing an interposed subsidiary. 69 Report of the Special Commission of Inquiry into the Medical Research and Compensation Foundation (September 2004) (James Hardie Enquiry), at: http://www.dpc.nsw.gov.au/data/assets/pdffile/0020/11387/PartA.pdf] 70 James Hardie Inquiry, 2004, Vol.1, p.12.

As well as domestic stock exchanges and regulation, international regulation also plays a

fundamental role in the adoption of CSR71 because the CSR indexes, in particular, promote self-

regulation and constant improvement of companies CSR practices. The two groups of regulation are

‘reflexive regulation72’ and the second type outlines the minimum standards and principles which

companies might commit to in their operations73.

Arguably the most effective and respected74 of the reflexive regulations is the Dow Jones

Sustainability Index75 because it provides the highest standard of CSR among other such

instruments76. The reasons are threefold:

Firstly; it requires the disclosure about compliance with the ILO convention on freedom of

association and percentage figures of employees covered by collective bargaining or represented by

an independent trade union77. Secondly, details of the extent of consultations with trade unions over

organisational change must be disclosed78 and finally, the Index includes a section on “Human

Capital Development, and Talent Attraction and Retention”79. For a company to implement and be

regarded highly in this index has been argued to be increasingly influential amongst NGO groups,

company employees, journalists and other stakeholders80

Other such instruments include the SA800081 and FTSE4Good.

71 “In addition to these Australian-derived regulations where are various sets of international regulations which may also be an important catalyst for the development of CSR policies in Australian Companies” [Meredith Jones et al, pg.58]. 72 Promotes self-regulation and constant improvement of CSP practices. 73 Ibid. 74 In ‘Rate the Raters’ in October 2010, the DOW Jones Sustainably Indexes were identified as the most credible sustainable rating approach amongst 100+ rating organisations surveyed. http://www.sustainability-indexes.com/07_htmle/assessment/overview.html75 http://www.sustainability-indexes.com/ 76 Meredith Jones et al, pg.59. 77 Ibid.78 Ibid.79 Companies disclose and detail performance indicators used in executing skill mapping and development strategies, the share of performance-related compensation and to provide information about the satisfaction levels of employees. [Ibid]. 80 ‘Rate the Raters’ http://www.sustainability-indexes.com/07_htmle/assessment/overview.html81 After the enforcement of art.4 of CCL 2006 on CSR in China, more than 300 companies have strived to and have been granted the SA 8000 certificate.

The second type that outline the minimum standards include the ILO Declaration on Fundamental

Principles and Rights at Work82, the UN Declaration of Human Rights83, the OECD Guidelines for

Multinational Enterprises84, the US/UK Voluntary Principles of Security and Human Rights85 and the

Global Impact86. It should be noted that all of these are adopted on a voluntary basis and companies

choose to what extent they integrate the instruments. It is this that limits their effectiveness as

adequate CSR enforcement and acts more as a badge that a company can proudly parade in front of

its competitors87.

The final CSR ‘enforcer’ is public bodies. During China’s research report88 which collected the

opinions of various interests89, the National People’s Congress from Shanghai suggested the inclusion

of CSR in the new Company Act90. With their support and other various sources, the legislators

decided to incorporate CSR into Chinese company law. It is given statutory effect in art 5 of the CCL

200691. The importance of this should not be underestimated because Chinese law had not

acknowledged CSR prior to this. In doing so, corporations are now implicitly legally required to

observe social, moral and business ethics and undertake social responsibilities92.

82 See: http://www.ilo.org/dyn/declaris/DECLARATIONWEB.INDEXPAGE83 http://www.un.org/Overview.rights.html 84 http://www.oecd.org/department/0,2688,en_2649_34889_1_1_1_1_1,00.html 85 http://www.state.gov/g/drl/rls/2931.htm86 http://unglobalcompact.org/Portal/Default.asp? 87 “although international CSR standards will continue to play a very important role in strengthening CSR internationally, the Government and related organisations should try to build tailored standards on social and environmental responsibility and technical regulations based on the economic situation [...] disclosure on corporate social and environmental responsibility and behaviours should also be an important factor of implementing CSR more efficiently and completely”, Jingchen Zhao, “The regulation and steering of corporate social responsibility in China: stories after the enforcement of Chinese Company Law 2006”, International Company and Commercial Law Review, 2011. 88 K. Cao et al (eds) “A Research Report on the Amendment to Company Law”, Beijing: China Legal Publishing House, 205. 89 Notably; corporations, experts and the public90 They suggested that: “[...]in addition to protecting shareholders’ interests, company should also consider other social interest such as the interest of employees, consumers, creditors, local communities, environment, socially disadvantaged groups, and the general public [pp 13-30 of research report]. 91 It states: “[A] company must, when engaging in business activities, abide by the laws and administrative regulations, observe social morals and business ethics, be integrity and good faith, accept regulation of the government and the public, and undertake social responsibilities”. 92 Jingchen Zhao, “The regulation and steering of corporate social responsibility in China: stories after the enforcement of Chinese Company Law 2006”, pg.2, International Company and Commercial Law Review, 2011.

To conclude, it seems apparent through the examples given above that although CSR is given

statutory affect in various jurisdictions it is still only a voluntary or at most a moral requirement. The

media, international regulations and public bodies/opinion will continue to play a critical role in

fighting for CSR practices. But, companies risk a lot by not incorporating CSR practices and

maintaining them and therefore it is there interest to do so:

“The management of non-financial risks may not necessarily maximise profits or shareholder wealth

in the short-term; however, failure to properly identify and manage these risks may cause

considerable detriment”93.

93 Shirley Quo, ‘Corporate Social Responsibility and Corporate Groups: The James Hardie Case, Company Lawyer, 2011.

BibliographyText Books:

Aled Griffiths, “Company Law” (1st edition, Pearson Education Limited 2007, 2009, 2011)

M Orlitzky, ‘Corporate Social Performance and Financial Performance: A Research Synthesis’ in A. Crane, A. McWillams, D. Matten, J. Moon and D. Siegel (eds) The Oxford Handbook of CSR (Oxford: Oxford University Press, 2008) p. 133].

Law Journals/review:

A.B. Carroll, “The pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders” (1991) 34 Business Horizons 39

Ahern Deirdre, “Directors’ duties, dry ink and the accessibility agenda”, Law Quarterly Review, 2012.

Jingchen Zhao, “The regulation and Steering of corporate Social Responsibility in China: stories after the enforcement of Chinese Company Law 2006”, International Company and Commercial Law Review, 2011.

K. Cao et al (eds) “A Research Report on the Amendment to Company Law”, Beijing: China Legal Publishing House, 205.

Meredith Jones, Shelley Marshall and Richard Mitchell, “Corporate Social Responsibility and the Management of Labour in Two Australian Mining Industry Companies”, Volume 15, Number 1, January 2007.

Shirley Quo, “Corporate Social Responsibility and Corporate Groups: The James Hardie Case”, Company Lawyer, 2011.

Qingxiu Bu, “China’s new approach to CSR in Congo: is the leverage turning to China?”, International Business Law Journal, 2010.

Newspapers/Reports:

Corporations and Markets Advisory Committee, “The social responsibility of corporations report (December 2006)].

Report of the Special Commission of Inquiry into the Medical Research and Compensation Foundation (September, 2004) (James Hardie Inquiry).

“Noncompliance is tolerated, as long as the suppliers promise to try harder next time. If we meant business, core violations would disappear”. Charles Duhigg and David Barboza, “In China, Human Costs Are Built Into an iPad, The New York Times, published January 25th, 2012

“The stark reality of iPod’s Chinese factories, Mail on Sunday, 18th August 2006.

Elizabeth Knight, “Victory for ASIC over Hardie, but how big and for how long?”, (April 24, 2009), Sydney Morning Herald

http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?_r=1&pagewanted=all

http://www.bbc.co.uk/news/technology-16832106

Film:

“China vs. the US – The Battle for Oil” (2007-SDTV-d0x).avi

Internet Links:

http://lamsonconsulting.com/blog/?p=197

http://www.sustainability-indexes.com/07_htmle/assessment/overview.html

http://www.ilo.org/dyn/declaris/DECLARATIONWEB.INDEXPAGE

http://www.un.org/Overview.rights.html

http://www.oecd.org/department/0,2688,en_2649_34889_1_1_1_1_1,00.html

http://www.state.gov/g/drl/rls/2931.htm

http://unglobalcompact.org/Portal/Default.asp

http://www.dpc.nsw.gov.au/data/assets/pdffile/0020/11387/PartA.pdf]

http://www.ilo.org/global/standards/lang--en/index.htm

http://www.apple.com/supplierresponsibility/auditing.html

http://www.apple.com/supplierresponsibility/reports.html

http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?_r=1&pagewanted=all

http://www.apple.com/supplierresponsibility/code-of-conduct/

http://www.apple.com/supplierresponsibility/

http://www.smh.com.au/business/victory-for-asic-over-hardie-but-how-big-and-for-how-long-20090423-agsh.html