(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
It is impossible to avoid, it is everywhere. Among honking cars, rickshaws, and pedestrians: The blue logo is always part of the street scene here in Dhaka. Composed of three blue balloons, or is it a blue propeller? On buses and bus stops, billboards or posters, faded t-shirts or as banners outside one of the many small shops where you can charge the calling card: the Telenor logo. In Bangladesh, the Telenor-controlled Grameenphone has more than 7.000 such outlets. The number of posters is far higher.
Even when you open the newspaper or turn on the TV, the logo is never far away. 16 percent of all TV commercials in the country are paid by Grameenphone; Even the news broadcasts are sponsored. Newspaper ad numbers are similar and Grameenphone's audio logo is the most popular ringtone in this mobile-savvy country. But you never see the name Telenor. In Bangladesh, the blue logo is associated with the Grameenphone.
Poll vs store shelf
After the Danish documentary "A Tower of Promises" in May showed strong criticism of Telenor's subcontractors, it has emerged that a total of seven workers have died in work accidents for the telecommunications company. The theory of corporate social responsibility indicates that the market will punish companies that behave badly. On August 27, Synovate (formerly MMI) published its new reputation survey in which 1132 Norwegians responded that Telenor's reputation is in free fall. But this does not seem to be reflected in the behavior of telecommunications.
Ny Tid has reviewed Telenor's quarterly results and found that the response from customers is the exact opposite of the answers in the survey from Synovate. From the first to the second quarter, Telenor has gained 48.000 new subscribers in Norway. This is in the same period as the massive media storm around Telenor was going on.
– That we fell down on the reputation survey was not surprising, after the extensive media coverage of the Bangladesh case, says Atle Lessum, information manager at Telenor. He concludes that the Bangladesh case has not had a major impact on the market and the number of subscribers.
- These figures do not say anything about customers' motivation. Are there other factors that may be relevant, have you run any new campaigns or acquired other companies during this period?
– We have focused on mobile broadband, but have otherwise not had any extraordinary advertising campaigns. After the revelations, we quickly came on the scene and said that we will clean up, and that ethics is just as important to us regardless of whether we work in Bangladesh or in Norway. We hope that this has contributed to the customers not punishing us by changing supplier, Lessum answers
- Logical flaw
Tor Wallin Andreassen, professor of marketing and head of the Department of Marketing at BI Norwegian School of Management, is surprised to hear that Telenor has gained 48.000 new customers at the same time as the company is sinking like a stone in the reputation surveys.
– This is in a sense a logical flaw. The only explanation I can think of is that the product is so attractive that it overshadows people's attitude towards the company, he says.
In the banking market, we find a similar example, where the giant DnB NOR performs poorly on the Norwegian Customer Barometer, but still makes money in buckets and buckets.
– There are thus some examples that a fall in reputation and customer satisfaction does not apply in cases where the products are very attractive. Many people like to think that there is a connection between the brand and customers' buying behavior, but that does not always have to be the case, says Wallin Andreassen.
- Does it have anything to say that the Telenor scandal took place in Bangladesh?
– Yes, it can play a role. Most people understand that the working conditions there are different than here, but that does not excuse the attitudes of the Telenor management, says Wallin Andreassen.
The solution he envisages is to make the markets more efficient.
– From a societal perspective, this market shortage is undesirable and one could imagine measures to make the markets more efficient through, for example, more critical consumers, more real alternatives or lower barriers to entry for the industries. In general, I think the market will punish companies that plummet down reputation rankings, so that the Telenor case is an exceptional case, says Wallin Andreassen.
Gunhild Ørstavik, advisor in the Forum for Development and the Environment, does not agree that the market itself can solve this problem.
– We are honking our ears full of the fact that we live in an over-regulated state. It is therefore incomprehensible to most people that there is no effective system that punishes companies that are responsible for such dangerous working conditions.
While markets and the economy have undergone rapid globalization over the past three decades, the political and legal fields have not undergone a similar development. On page 34 of this week's edition of Ny Tid, the French lawyer Yann Queinnec argues that the Telenor case and other similar cases show that the law must also work to a greater extent across national borders. Gunhild Ørstavik also believes that the Telenor case shows the need for stronger legal regulation from the authorities.
- This problem can not be left to consumers. When choosing a telecom operator, it is impossible to know whether it is Telenor or Netcom that takes the most social responsibility. In the office, we replaced Ventelo when it was revealed that they were hiding the money in tax havens. Now we have Telenor and we have not changed after the Bangladesh revelations, for who is de facto better, Ørstavik asks.
Poll vs store shelf
After the Danish documentary "A Tower of Promises" in May showed strong criticism of Telenor's subcontractors, it has emerged that a total of seven workers have died in work accidents for the telecommunications company. The theory of corporate social responsibility indicates that the market will punish companies that behave badly. On August 27, Synovate (formerly MMI) published its new reputation survey in which 1132 Norwegians responded that Telenor's reputation is in free fall. But this does not seem to be reflected in the behavior of telecommunications.
Ny Tid has reviewed Telenor's quarterly results and found that the response from customers is the exact opposite of the answers in the survey from Synovate. From the first to the second quarter, Telenor has gained 48.000 new subscribers in Norway. This is in the same period as the massive media storm around Telenor was going on.
- That we fell down on the reputation survey was not surprising, after the extensive media coverage of the Bangladesh case, says Atle Lessum, information manager at Telenor. He concludes that the Bangladesh case has not had a major impact on the market and the number of subscribers.
- These figures do not say anything about customers' motivation. Are there other factors that may be relevant, have you run any new campaigns or acquired other companies during this period?
– We have focused on mobile broadband, but have otherwise not had any extraordinary advertising campaigns. After the revelations, we quickly came on the scene and said that we will clean up, and that ethics is just as important to us regardless of whether we work in Bangladesh or in Norway. We hope that this has contributed to the customers not punishing us by changing supplier, Lessum answers
- Logical flaw
Tor Wallin Andreassen, professor of marketing and head of the Department of Marketing at BI Norwegian School of Management, is surprised to hear that Telenor has gained 48.000 new customers at the same time as the company is sinking like a stone in the reputation surveys.
– This is in a sense a logical flaw. The only explanation I can think of is that the product is so attractive that it overshadows people's attitude towards the company, he says.
In the banking market, we find a similar example, where the giant DnB NOR performs poorly on the Norwegian Customer Barometer, but still makes money in buckets and buckets.
– There are thus some examples that a fall in reputation and customer satisfaction does not apply in cases where the products are very attractive.
Many people like to think that there is a connection between the brand and customers' buying behavior, but it does not always have to be that way, says Wallin Andreassen.
- Does it have anything to say that the Telenor scandal took place in Bangladesh?
– Yes, it can play a role. Most people understand that the working conditions there are different than here, but that does not excuse the attitudes of the Telenor management, says Wallin Andreassen.
The solution he envisages is to make the markets more efficient.
– From a societal perspective, this market shortage is undesirable and one could imagine measures to make the markets more efficient through, for example, more critical consumers, more real alternatives or lower barriers to entry for the industries. In general, I think the market will punish companies that plummet down reputation rankings, so that the Telenor case is an exceptional case, says Wallin Andreassen.
Gunhild Ørstavik, advisor in the Forum for Development and the Environment, does not agree that the market itself can solve this problem.
– We are honking our ears full of the fact that we live in an over-regulated state. It is therefore incomprehensible to most people that there is no effective system that punishes companies that are responsible for such dangerous working conditions.
While markets and the economy have undergone rapid globalization over the past three decades, the political and legal fields have not undergone a similar development. On page 34 of this week's edition of Ny Tid, the French lawyer Yann Queinnec argues that the Telenor case and other similar cases show that the law must also work to a greater extent across national borders. Gunhild Ørstavik also believes that the Telenor case shows the need for stronger legal regulation from the authorities.
- This problem can not be left to consumers. When choosing a telecom operator, it is impossible to know whether it is Telenor or Netcom that takes the most social responsibility. In the office, we replaced Ventelo when it was revealed that they were hiding the money in tax havens. Now we have Telenor and we have not changed after the Bangladesh revelations, for who is de facto better, Ørstavik asks.
Consumers in Bangladesh
Is there a difference between consumers in Norway and in Bangladesh in this case? No, it seems that telecom customers think alike, regardless of citizenship and geography.
– When a Bangladeshi is to choose a mobile operator, there is one thing that applies. Price. Nothing else matters, says Md Hasan.
He is a telecommunications journalist for the Daily Star, the largest English-language newspaper in Bangladesh.
Although Norwegian and Bangladeshi telecom customers have a lot in common, the background for the choices they make is quite different. In the last decade, the proliferation of telephones in Bangladesh has undergone a slight revolution. Until 1997, there was only one mobile operator in Bangladesh, CityCell. Mobile phone was a status symbol, available only to the supreme elite. The price for a SIM card was 120.000 Taka (approx. 9.200 NOK), corresponding to more than an annual salary for the middle class.
Grameenphone was established in Bangladesh in 1997 and invested heavily in expanding the network outside the big cities as well. Until 2005, the Grameenphone was almost exclusive, then the underbidding competition began. Call rates are now below a tenth of what they were four years ago. The price of a SIM card is down to 100 Taka. With increased competition, Grameenphone's market share has declined. In 2006 they had 63 per cent of the mobile market, in June 2008 the share is down to 47 per cent.
- Has the child labor scandal not had anything to say for the customers?
– To answer this, you must understand the media image in Bangladesh, says Hasan and points out the latest advertising statistics from the monthly magazine Bangladesh Brand Forum which, like Norwegian Propaganda, monitors the national media image.
It shows that in May, 16 percent of all ads on Bangladeshi TV were paid for by Grameenphone. Five of the six mobile operators are on the list of the ten largest advertisers. Together, they contribute one in three advertising dollars.
- The media has become dependent on advertising revenues. They dare not be critical for fear that the ads will disappear, says Hasan.
- What have these cases meant for Grameenphone and Telenor's reputation?
- The majority in Bangladesh can neither read nor write. But among the business elite, this issue is hotly debated. Many claim that Grameenphone has developed into a disgusting company that will go over corpses to make money, says Hasan. He goes on to say that people do not associate Grameenphone with Telenor, which is why most people blame Yunus.
- If there is anyone who can be harmed, it is Grameen. This is despite the fact that four out of six mobile operators are involved in the scandal, says Hasan.
Standards vs. Enforcement
Telenor and Grameenphone have not received any punishment either in Bangladesh or in Norway after the revelations of miserable working conditions and fatal accidents. The Norwegian state owns 54 percent of Telenor, but does nothing but expect improvement. The solution is social responsibility, Telenor CEO Jon Fredrik Baksaas has repeatedly emphasized. Telenor will, voluntarily, take more and better social responsibility.
The signs that voluntary social responsibility alone is not enough are getting closer. "Ten years of ethical guidelines have not improved the situation in the globalized textile sector. On the contrary ", writes Pia A. Gaarder in the Norwatch report" Mighty branded clothes ".
What about the really bad companies – those who behave so badly that they have been thrown out of the Norwegian Petroleum Fund? Both the arms manufacturer Lockheed Martin and the supermarket chain Wal-mart have suffered this fate, without the market having punished them. In the last year, the two companies have risen 36 and 17 percent on Wall Street, respectively, while the very controversial seed producer Monsanto has risen as much as 66 percent. We could have made the list longer. There are a number of examples of companies that are exposed to harsh criticism doing well both on the stock exchange and among consumers.
This is the backdrop for the large-scale conference "Decent Work Agenda" which will be held in Oslo today, 5 September. Among the guests are Mary Robinson, President of the Ethical Globalization Initiative, Secretary General of the World Trade Organization (WTO) Pascal Lamy, and Norwegian Foreign Minister Jonas Gahr Støre. According to the ILO, the most important points in this agenda are to promote basic labor rights, employment, social security systems and tripartite dialogue in working life.
Åsmund Arup Seip is a researcher at the research foundation Fafo, and has written the report on "Decent Work" which the organizers – the Ministry of Foreign Affairs, the international workers' organizations ILO, LO, NHO and Financial Times – recommend reading before the conference.
– The "Decent Work" agenda contains many fine goals, but does it also contain some concrete mechanisms and methods for how to achieve these goals?
- The ILO has certain sanction options, but there has been criticism that this is one of the ILO's weak points. What the ILO can do is give a country a correction, ie a shame hook practice, says Arup Seip. He believes this may work in some cases, but that it has little effect on the worst countries.
- In order to put in place heavier staffing mechanisms, such as financial sanctions that really work, the ILO must cooperate with other institutions. There is a discussion about such a collaboration the ILO now wants, says Arup Seip.
It is precisely the question of how workers' rights can be enforced that is the big blind spot in this debate. At the conference on 5 September, the most difficult point will hardly be to get the business representatives to agree that the employees should have decent working conditions, but what measures should be used to achieve this.
- The problem is not that there is a lack of international standards, but that there is no effective way to enforce them. This is what Njål Høstmælingen, researcher at the Norwegian Center for Human Rights, says.
The toolbox is full
In the international debate, a number of proposals are swirling about how a stronger global political level can contribute to enforcing workers' rights. Njål Høstmælingen thinks the proposal from Yann Queinnec (see page 34) to hold companies legally responsible for human rights is interesting, but believes it will be difficult to implement in practice.
- Some of these norms are vague and unsuitable for assessing business activities. In addition, many states have not acceded to the conventions, while other states give the go-ahead to enforce them.
- Is there in this context a difference between privately owned companies, and a company like Telenor, where the Norwegian state owns 54 percent?
– It is not so under company law. In relation to human rights, it may be possible to legally link these companies to the state directly, so that the state – but not the company – becomes responsible for human rights violations, says Høstmælingen.
In the government, the work with social responsibility is divided between a number of ministries. A separate report to the Storting on the topic will be published this autumn, and therefore Minister of Trade and Industry Sylvia Brustad is currently quite brief in her statements. She is responsible for the state's 54 percent of Telenor.
Brustad's answer to Yann Queinnec is that the most concrete thing the government will do is to expect.
– I expect companies with state ownership to be leaders when it comes to social responsibility. The companies' activities must be carried out in accordance with basic human rights, and requirements must be made of business partners for the same, Brustad answers.
Universal jurisdiction
A related publisher is presented by the lawyer Pia Goyer in a report from the Forum for Development and the Environment. She proposes a report that a proposal that is somewhat simplified is that Norwegian laws and Norwegian sentencing should apply to Norwegian companies and their subsidiaries abroad.
– Norwegian criminal law has universal jurisdiction for the most serious conditions. If a Norwegian does something that violates Norwegian law abroad, he can be punished for it in Norway. But the universal jurisdiction is rarely used. An important reason for this is practical conditions, as in the case of Aker Kvaerner and Guantanamo. The problem here was a certain degree of doubt about the legal and a large degree of doubt about factual matters, says Høstmælingen
- So this is primarily a resource problem?
- Yes, but cases such as drug trafficking, war crimes and human trafficking will probably be prioritized before an investigation of Norwegian business activities abroad. Some years from now, this resource issue may look different. The idea is good, and you might scare someone, he says.
Brustad will not take a position on the proposal in the report from the Forum for Development and the Environment.
- The starting point is that Norwegian companies must comply with the laws that apply in the countries in which they operate. The starting point in international law is that a state has sovereign jurisdiction over its own territory. It follows that other states do not have a similar jurisdiction. However, there are exceptions to this, for example, corruption is prohibited by Norwegian law both at home and abroad, says Brustad.
- The WTO has the muscles
The UN Special Envoy for Business and Human Rights is John Ruggie. He is working on a major project that aims to harmonize national laws, so that as many countries as possible get as equal laws as possible. Njål Høstmælingen supports this work. All countries' laws should be as equal as possible.
- All countries should have minimum rules, so some countries may want to go further. Then we need to strengthen enforcement mechanisms at the national level. In this way, the business community knows what they have to deal with, and competition distortion and uncertainty are avoided.
- A proposal is to link the enforcement of the ILO conventions to the trade agreements in the WTO. What do you think about it?
- I am positive to the extent that the ILO conventions are precise enough that they can be enforced. The WTO has the muscle to sanction breaches of its regulations, but it is important that the enforcement of the rules does not affect accidentally, says Høstmælingen.
Simon Pahle, a researcher at the University of Ås, spoke in favor of such a link between the ILO and the WTO in an essay in Ny Tid last autumn. Gunhild Ørstadvik also thinks this is an interesting proposal.
– It is positive that WTO chief Paskal Lemy is at the conference on 5 September. Although in some circles it is a curse in the church to expect something positive from the WTO system, several of us want to see if the regime's effective regulatory and sanction system can also be used to protect non-economic interests, says Ørstavik.
She believes that the workers' organization ILO is doing a good job, but does not have the muscles needed for the "decent work" agenda to be implemented.
– The government has occasionally been big in the mouth that they want to be an international leader in this field. So far, concrete measures are lacking. Conferences and high rhetorical cigar smoking do not change the world, she believes. But Ørstavik adds that good results can come out of the "Decent work" conference if the participants focus on how they can enforce the workers' rights through close and binding cooperation.
Thus, these proposals are served the "Decent work" conference as a light Friday breakfast. Back on the streets of Dhaka, there are many who will be interested in the conference participants being able to agree on schemes that are more effective than the current scheme, based on voluntary social responsibility.
