Amazon's Corporate Social Responsibility in Global Governance

 Global Governance & Corporate Social Responsibility

Multinational Corporations in Global Governance

The Case of Amazon’s Increasing Power

Introduction

It is not anymore the question of whether multinational corporations are getting more powerful in the arena of global governance. For scholars in transnational governance and corporate social responsibility, it is now clear and is a fact (Fuchs, 2005; Locke, 2013: 24-45). Instead, it is the question of how they are getting stronger. Answering this question will potentially allow governing state-actors to influence and control these profit-motivated actors.

In addition to raising a new question, we also need a new form of analysis, that is, case studies. Multinational corporations are now wealthier than some governments (Belinchón and Moynihan, 2018). Such actors need personalised approaches in order to mediate negotiations and to integrate agreements between state and non-state actors into strong practice, rather than keeping them on the level of empty words, promises and a ‘guiding role’. 

 

Amazon has been established by Jeff Bezos in 1995 as an online book-seller company. Since then, the firm has expanded into every area of goods, from clothes to houses and groceries, and has also developed its own streaming services (music, video, etc.) and products (Echo speakers, cables, batteries, etc.) (Hartman, 2020). Today, it is the fourth largest company by market capitalisation in the world, worth 1,233.4 billion US dollars (Statista, n.d.).

Therefore, this paper will explore the question of how Jeff Bezos’ Amazon is demonstrating its power in global governance by uncovering (1) how state and individual customer actors are all deeply dependent on its services, (2) how it is ‘stronger’ than state actors when it comes to Human Right – as Amazon is not ‘punished’ for its everyday-Human Rights violations –, and (3) what the desperate need of state actors to develop public-private partnerships (PPPs), to govern together with illegitimate private (corporate) actors tell us about the power of multinational corporations through the weakness of public governing bodies. The main argument in answering this question is that multinational corporations need individualised focus in research – e.g. in this paper Amazon – because they are independent, profit-motivated actors with unique structures and cases of Human Right- and other international law-violations, and they are wealthier than some states. For example, the specific case of Amazon’s warehouse-labour.

Within a power-centric theoretical framework – applying Fuchs and Surya’s work – this paper will first, analyse the existing literature, outlining the issue of academia by focusing on multinational corporations as a group, rather than as individual actors (Fuchs, 2005; Surya, 2003). Then, the theoretical framework and the analytical approach and data will be introduced, before diving deeper into the empirical analysis of Amazon’s dependency-circle, its Human Rights violations without harsh consequences and public actors’ struggle to include Amazon in public global governance and policy-making, in order to be able to create laws that Amazon will comply with. Otherwise, public governance could be ineffective – which, again demonstrates the public sphere’s weakness and dependency on the private sphere.

 

 

Literature Review: The Missing Case Studies of the Big-Picture-Based Academia

The existing literature argues the increasing power of multinational corporate actors in global governance. Fuchs, for example, disputes that corporations’ political power is increasing in instrumental-, structural- and discursive terms. Yet, he adds, their power remains vulnerable to changes in social norms and scandals; but this is questionable through a case-specific analysis of Amazon and in particular, its Human Right violation-scandals without consequences from the public, as we will discover later (2005). Other scholars in the debate on corporate power are more sceptical on business-power. Bartley, for instance, is concerned that corporations do not rule the world, it is only us who only look at their ‘ruling’ role, whereas they have other positions as well. For him, business actors are influential but not influencing agents (2018). Yet, we will see how businesses are desperately invited by governing bodies through PPPs specifically, to allow them influencing policy-making. Also, the power of multinational corporations is not controlled, because they achieve shady codes of conducts that allow them to find loopholes in public-policies for their (private) benefit (Locke, 2013: 24-45).

 

First, states, governments and individual people are all reliant on multinational firms’ services. Amazon in particularly, with its unique same-day or 1-day delivery – and developing drone-delivery – made millions of people dependent on its services. Despite the rumours and suits against the company, even those who are aware of their wrong-doing declare they have no option but to keep ordering through Amazon (Forde, 2018). Amazon’s broad and affordable range of products – from every-day use kitchen-items to houses – and the speed of delivery is unbeatable so far. Alibaba, the other e-commerce giant is far behind in sales (Patterson, n.d.). Although, there is a difference between them in the sense that ‘Amazon is a massive retailer for both new and used goods, and Alibaba operates as a middleman between buyers and sellers.’ (repricerexpress by Xsellco, n.d.)

 

Second, global governance’s core values of Human Rights are known for being ignored by these multinationals. For Locke in particular, it is a dream to assume that working conditions can change for the good of the employers (2013: 24-45).

Ever since the rise of multinational corporations, states – who were originally the exclusive violators and protectors of Human Rights – no longer have their monopoly over Human Rights. Corporate rise has formed this problem for the system that was designed for state actors, not profit-oriented private agents (Surya, 2003). Yet, there are opposing studies indicating that, although, litigation for Human Rights may seem ineffective – because corporations are barely found guilty and their cases get dismissed –, these movements may still have an influence on corporations’ Human Rights policy-development (Schrempf-Stirling and Wettstein, 2015). In the case of this paper’s case study, Amazon took a step towards transparency ‘by publicly disclosing on its website the names, addresses, and other details of over 1,000 facilities that produce Amazon-branded products’ in 2019 (Human Rights Watch, 2019). Although, the results of this move are not yet reported or seen.

 

Third, the fact that global governance desperately needs and develops networks of PPPs since the 1990s to involve profit-oriented corporate actors in public governance, is alarming (Pattberg and Widerberg, 2016: 43). Global policy-making is more successful today through PPPs, involving non-legitimised corporate actors in the process. Even though, this is problematic because these actors who are part of the policy-making but have not been elected by the public in any form are not truly accountable (Schäferhoff et al., 2009). Yet, although, global governance seems to be more prosperous, some scholars argue that the performance of these multistakeholder partnerships remain limited (Pattberg and Widerberg, 2016: 44-46). Although, Professor Pattberg adds that, besides that collaborations do not go beyond signing papers and the documents do not ‘translate into practice … uniting governments, markets and civil society’ in PPPs, they are beneficial, because they mean more diversity and inclusion, which is ‘better’. There is output (63% of partnerships), even though, there is still much room for development. Yet, PPPs leave room for greenwashing – by legitimising corporate practices through these partnerships (Pattberg, n.d.). Therefore, existing attempts to control multinational corporations seem to fail. They are (1) too powerful and important, (2) not respecting international values, such as Human Rights – and mostly without harsh consequences, and (3) inviting them into policy-making – despite the positive results – is problematic in terms of legitimacy, accountability and the loopholes that allow for greenwashing, for instance.

 

The literature above on the academic debate of corporate power demonstrates an issue: there is limited academic focus on specific case studies in the field – with particular multinational corporations in the centre. These enormous actors, who are now wealthier than some states, need personalised research and based on that, individualised specific behaviour, communication towards them and policy-making with them (Belinchón and Moynihan, 2018). Therefore, this paper will contribute to the existing literature with a case study of Amazon – one of the largest multinational corporations with rumours and findings of Human Rights violations, customer-dependency-circle and political power.

 

Theoretical Framework: Fuchs and Surya

This paper applies a power-centric theoretical framework, where Fuchs’ concept and definition of power – and its levels, or so-called ‘faces’ – will be used. Corporate power for Fuchs can be instrumental, structural and discursive. In his definition instrumental power is the power of lobbying (the ability to influence policy output). This includes corporate firms’ communication with public actors in policy-making – whether formally (through PPPs, for example) or through informal discussions outside (Fuchs, 2005: 774). Structural power is closely linked to the instrumental component. Structural power is the predetermination of the decision-making process’ behavioural options by the prevailing pecuniary structures.  (Fuchs, 2005: 775). In other words, structural power is about the power-systems standing as a framework, within which the previously mentioned instrumental power’s decision-making happens (Dür et al, 2015). This form of power mainly consists of provision of expertise and financial investments offered to public (legitimate) policy-makers.

Finally, discursive power builds on the power of ideology, norms and values, exceeding the aforementioned two forms of power by introducing normativity (Lukes in Heyward, 2007: 48-49). Discursive power can be framing (that of the corporate business’ own- or others’ identity) and legitimacy-development. Taking public roles in representing values and norms (particularly those which are popular) or taking a side in policy-debates help businesses gaining social legitimacy (Fuchs, 2005: 777-780).

Through the case-study, we will look at Amazon’s structural power (in society’s economic dependency on Amazon), discursive power (in its self-reports on Human Rights and through PPPs) and instrumental power (lobbying in policy-making through PPPs). Therefore, this understanding of corporate power will not only help us to define ‘power’ but to assess each component of ‘power’ and their significance or meaning in the case of Amazon. It is particularly crucial that Fuchs’ levels of power reflect the areas through which Amazon is studied in this paper: economic dependency, Human Rights violations and PPPs (2005).

 

The other component of the theoretical framework is Surya’s work. Although, his paper focuses on Human Rights violations by multinational corporations, this paper will demonstrate his model of four-fold inadequacy is in fact relevant to all the cases of power-levels of Amazon (structural power through the dependency on the firm, discursive power in Human Rights communication and PPPs and instrumental power in PPPs). For Surya, this four-fold inadequacy consists of (1) the lack of consensus on standards between public and private agents, (2) the profit-oriented interest of corporations in Human Rights, (3) the ‘overdose of dialogue and cooperation’ between the public and private spheres and (4) the indirect nature of the approach and the absence of sanctions on corporations (Surya, 2003: 17-21). Beyond Human Rights, disagreement on standards between public and private actors, for example, in terms of standards of sustainability are also formulated vaguely, resulting in ineffectiveness and greenwashing (Davidescu, 2020).

Therefore, this paper will use a power-centric theoretical framework that combines Fuchs’ concept of power and Surya’s four-fold inadequacy (Fuchs, 2005; Surya, 2003). This framework allows us to look at multinational corporate power – including that of Amazon – in global governance, while we are able to keep an eye on the negative effects coming with this multi-layer power (instrumental, structural and discursive) that weaken the global system of governance and urge us to pursuit reforms.

 

 

Analytical Approach and Data

This paper applies the aforementioned theoretical framework of power on the analytical approach of an exploratory case study of the existing presence of multinational corporations – like Amazon – in global governance. The focus will be particularly on (1) the economic dependency on multinational corporations and their services, (2) their unpunishment for Human Rights violations, and (3) their problematically illegitimate and unaccountable presence in policy-making through PPPs.

The data analysed is diverse, to minimise bias and increase the critical nature of the approach. Primary sources of organisational records range from Amazon’s own declarations on its promising approach to Human Rights, non-profit third-party reports critiquing its actions – including Human Rights Watch, Oxfam, Amnesty International and Green America. These reports and research-data are combined with (secondary source) academic research-findings, including that of Bartley, Dür et al., Fuchs, Surya, Locke, Lukes, Schäferhoff et al., Pattberg and Patterson.

An exploratory case study for this paper is most suited because it studies a phenomenon within a context (phenomenon of corporate power within the context of global governance), through data-gathering, and it allows for in-depth description of a specific case (in this case, that of Amazon). This mode of analysis investigates the questions of ‘what’, ‘why’ and ‘how’? The exploratory case study of Amazon has the benefits of (1) allowing a nuanced, narrowly focused analysis (due to the case study), and (2) providing space for critical assaying. Yet, this approach has the limitations of (1) the lack of generalisation and (2) possible subjectivity (Willis, 2014). Although, this paper will minimise these limitations by placing the specific case study within the general framework of multinational corporations’ power in global governance (see the Literature Review: The Missing Case Studies of the Big-Picture-Based Academia). In addition, subjectivity is minimised by the analysis of arguments not only in favour but also, against this paper’s purpose, for example, Schrempf-Stirling and Wettstein’s work. These sources support the validity and reliability of the exploratory case study from both, the academic/scientific and the non-profit organisational side as well.

As a result of the pandemic, all data have been collected online from Google Scholars, Google and the University of Amsterdam’s Online Library.

 

Empirical Analysis: The Case of Amazon

Structural Power: Economic Dependency

Firstly, we are reliant on Amazon’s services. It is us (individual customers), it is other businesses (e.g. Apple, who has ‘$30 million per month on Amazon’s cloud offering’ in order to secure its cloud-services for Apple customers, including iCloud and Apple Music), and it is states (FE Online, 2019; Statista, 2020). Amazon is the most used online shopping platform in the US – and is leading in other countries (like Germany) where it is present as well (Miva, 2019; Statista, 2019). Individual customers – even though, are often informed about Amazon’s Human Right violations – are dependent on Amazon, as today, it offers the fastest and often cheapest solution. A Prime Membership is an exclusively comfortable win-all: it secures the access of music, videos, grocery shopping, free one-day delivery and special deals as well (Amazon, n.d.a). Often, there is no other solution when a product is needed in a short period of time, but other times, people might feel ‘unintelligent’ not taking this all-in-one exclusive deal of the Prime subscription. As a result, businesses, who are selling their goods also become pendulous on Amazon – if they want to effectively reach customers, they need to appear in Amazon’s search results (Miva, 2019). According to over 60 Amazon-employee interviews, Jeff Bezos benefits of this dependency: Amazon’s policies with its partners change annually in a way that profits Amazon further. He does not allow sellers to make their products available at a lower price anywhere outside Amazon. He also ‘pushes them to use the company’s warehouses’ (where Human Rights violations happen), and above all, if they want their products to be seen in the search engine, they need to purchase ads on Amazon’s site in extra – knowing well, they have no other option to trade (Weise, 2019). Therefore, society’s dependency on Amazon demonstrates the exclusive strength of Amazon’s structural power (Fuchs, 2005).

 

Discursive Power: Human Rights

Second, Amazon advertises its commitment to ensuring the respect of Human Rights – set out by both, the United Nations (UN) and the International Labour Organization (ILO) – whether it is about its workers or customers. Amazon says it is dedicated to granting safety, healthy, diversity and inclusion, freely chosen employment and opportunities for employee feedback in its workplaces, promoting these with its third-party partners as well (Amazon, n.d.b). Yet, many Human Rights non-profit organisations (NGOs) have been imploring for Jeff Bezos’ mercy on its workers and adapting to Human Rights standards. For example, Oxfam has unrevealed Human Rights violations in the supply chain of Amazon’s Whole Food (against those working with seafood, sweet potato and tropical fruits) in many countries (Oxfam, 2020). This included poor wages, unbearable working conditions, intimidation and gender discrimination (Zoen in Oxfam, 2020). Since, Oxfam has collected 50.000 signatures from Amazon-customers, but consequences for the firm are not yet seen. Those signatories are also dependent on Amazon, as we have seen before.

 

Also, in 2020 Amnesty International has called on Amazon, to respect its workers’ Human Rights, after it has found multiple evidence on the company’s endeavour to monitor and filter ‘labour organizing threats against the company’ (Amnesty International, 2020). Besides the fact that Jeff Bezos declares that Amazon respects the rights of forming/joining trade unions, the findings of Amnesty International have not been denied. Workers who have spoken out on their unfair working conditions have been dismissed, regardless that Amazon is obliged to comply with the Human Rights set out by the UN (Amnesty International, 2020). Green America has added further Human Rights violations by Amazon – in addition to silencing its employees and resisting on their rights for unions – , including risking workers’ health in the United States and the supply chain, continuously trading dangerous electronical devices and their accessories, forcing Call Centre workers to sleep at their workplace, selling clothes made in factories that have previously been blacklisted for inadequate safety conditions and listening to- and giving out private information of customers (2019).

Yet, Jeff Bezos’ multinational company barely has any ‘serious’ consequences. The company’s value keeps increasing daily, which means its sales are expanding, despite the above analysed findings. As it has been argued, the world is dependent on Amazon’s services. Besides its customers, governments are not ‘punishing’ Amazon either. The discursive power is clear: Amazon is miscommunicating its approach to Human Rights – regardless the contradictory third-party reports (Fuchs, 2005).

 

Instrumental- & Discursive Power: PPPs

Last but not least, the need for PPPs – e.g. against climate change – illustrates how public/state actors are not anymore able to govern without involving corporate actors in policy-making. It is argued, that, regardless the transparency- and legitimacy issues with PPPs – discussed previously –, international policy-making and the standards set out are more effective when private actors are involved (Schäferhoff et al., 2009). Even though, others argue this greater level of effectiveness is still limited (Pattberg and Widerberg, 2016). Therefore, a takeaway here is that state actors are now forced to invite illegitimate corporate actors into policy-making, in order to have successful outcomes. Yet, this form of governance is still limited in effectiveness – even though, this path is more efficient than others where public profit-oriented actors are excluded. Consequently, there is a need to restructure this system of PPPs’ global governance in order to (1) win legitimacy, to (2) to develop transparency and to (3) become more efficacious – that is today still limited. The last point, efficiency could be a result of the above mentioned reconstruction of legitimacy and transparency: legitimate corporate actors would become more accountable and transparency would ensure their true commitment (Surya, 2003). Therefore, effectiveness would be evident, as multinational corporations would be responsible to the public, and transparency would allow for punishment from them (the public) as well, in the event of their loophole-action – like greenwashing. 

 

Jeff Bezos has funded a free preschool for children, close to Seattle in the United States. Concerns around this form of public-private partnership in education emerge. Instead of collaborating with local authorities and funding existing programs, this school – and its curriculum – entirely belongs to Jeff Bezos (Strauss, 2018; Au-Yeung, 2020). This case demonstrates a threat of entering public governance in education – particularly, because it is a preschool for underaged children, not a university for students usually 18 or above – through means which bypass the public institution. Although, the US society is in need of more free schools – they need Jeff Bezos’ institution. Therefore, both, the instrumental and discursive power of Amazon are seen through its participation in PPPs: the company is not only (illegitimately) participating in policy-making but (legitimately) governing bodies are dependent on its participation to achieve more successful – although, still limited – policies (Fuchs, 2005).

 

Results

Overall, this empirical analysis of the existing literature and data on the case study of Amazon demonstrated that (1) public dependency on private services remains an issue, (2) so does the non-punishment for Human Rights violations from the public and that (3) multinational corporate power is circularly reinforced through PPPs – as the illegitimate participation in policy-making ensures that Amazon’s visions and interests get legitimised through the outcome documents. As Surya has argued 18 years ago, there is a need to adapt to the new structure of global governance, where not only state- but non-state actors can legitimately be present at the table. The ‘four-fold inadequacy makes the system ineffective’ (2003: 56). This inadequacy includes the lack of consensus on standards, the profit-oriented interest in Human Rights, the ‘overdose of dialogue and cooperation’, the indirect nature of the approach and the missing sanctions (Surya, 2003: 17-21). As the case study of Amazon illustrates, since her words, not much has changed: international governance (beyond Human Rights and their violations) still needs a stronger mechanism and a reconceptualization of the guiding principles. Therefore, the need for the changes – based on the then existing Organisation for Economic Co-operation and Development (OECD) guidelines, the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and the UN frameworks – she proposed, is still relevant. As a solution, she has propounded a UN - World Trade Organisation (WTO) partnership, which today’s governors could still consider (Surya, 2003). Her points of the four-fold are still present – also, in the case of Amazon: sanctions on multinational corporations are missing due to the absence of a consensus on stricter policies, the profit seeking behind Human Rights as well as the disrespect of Human Rights (as Amazon demonstrates) and results remain at the level of dialogue (Amazon is not punished for violating international Human Rights standards and its discourse is still pro-Human Rights despite the rumours and scholarly findings on the opposite). 

The UN and the WTO would bring together public and private actors in a legitimate way: both institutions are globally legitimised through public governments. Yet, it remains to be answered by future research whether this move would negatively affect the increased effectiveness of policy-making through PPPs (Schäferhoff et al., 2009).

 

Conclusion 

This paper has pointed out the need for academic researchers to focus on multinational corporations in global governance individually. There is an urging necessity to analyse multinational corporations – that are getting larger and stronger than state actors – on their individual level.

We should not lay back when we read scholars arguing corporate power remains limited and vulnerable to scandals (Fuchs, 2005). The example of Amazon throughout this paper told us otherwise. First, the overall dependence on the firm’s services is alarming. Second, the well-known scandals and facts on Amazon’s violation of international Human Rights laws and norms without ‘serious’ consequences questions this power’s vulnerability. Third, public international governing actors’ struggle for developing PPPs also develops concerns about the still-controllable nature of business actors, doubting Bartley’s argument (2018).

 

The broader academic debate almost exclusively focuses on generalised issues and on the fact that businesses’ political power is increasing and what it potentially means (whether they remain vulnerable, whether they are influential or influencing, and whether they are controlled or out of control) (Fuchs, 2005; Bartley, 2018; Locke, 2013: 24-45). More importantly, the arguments on (1) economic dependency, (2) Human Rights violations and the (3) desperate need for PPPs have also been about businesses in general. They have provided a useful framework for this paper, but also highlighted the need for case studies, and Locke’s scepticism on the respect of Human Rights has been confirmed over Schrempf-Stirling and Wettstein’s optimism (Locke, 2013: 24-45; Schrempf-Stirling and Wettstein, 2015). The issue around corporate power within PPPs has also became clear through the example of Amazon (Pattberg and Widerberg, 2016; Schäferhoff et al., 2009; Pattberg, n.d.).

 

The case study of Amazon has led us to the conclusions of Surya, who has pointed out almost 20 years ago, that there is a need for global governance reforms. The system needs to reflect the new structure where non-state actors are also present. The four-fold inadequacy – of which the case of Amazon confirmed the lack of sanctions and profit-interest in terms of (the violation of) Human Rights, and the overly dialogue/cooperation-nature of their illegitimate involvement in policy-making (as they are not accountable) in PPPs (Surya, 2003: 17-21). Fuchs’ concept of ‘power’ has helped us to define Amazon’s power in terms of its structural power (through the economic dependency on Amazon), discursive power (via its own self-reports on Human Rights and through the PPPs it participates in) and instrumental power (through its independent policy-making within PPPs) (2005).

Surya’s findings are still relevant today, and this paper has confirmed her alarm for change through the case of Amazon. Yet, it remains a task for future research to look at whether her UN-WTO union would be the best resolution and whether it would truly effectively resolve the issues of the four-fold inadequacy.

 

 

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