Corporate ethics and corporate crimes

Several earlier posts focused on corporate responsibility for crimes against humanity during the period of the Holocaust (link, link, link). But we don't need to go to the period of World War II to find examples of crimes committed by corporations in support of their international business interests.

An especially egregious example was confirmed in 2018 when two former Ford Motor Company executives in Argentina were convicted of crimes against humanity for their cooperation with the military dictatorship in operations leading to the kidnapping and murder of twenty-four labor activists (link). The crimes occurred during the dictatorship of the 1970s, and the trial of executives and military officers culminated in 2018. Here is the summary of facts provided in the New York Times story:

A three-judge panel sentenced Pedro Müller, 87, then a manufacturing director at a Ford factory in Buenos Aires province, to 10 years, and Héctor Francisco Sibilla, 92, then the security manager at the plant, to 12 years for assisting in the kidnapping and torture of their colleagues.

The two executives “allowed a detention center to be set up inside the premises of that factory, in the recreational area, so that the abductees could be interrogated,” according to court papers.

These judicial findings establish the inexcusable behavior of Ford Motor Argentina. The question arises here, as it did in the case of Ford Werke during the Holocaust, the level of knowledge and control possessed by Ford Motor's parent corporation. This question is addressed in the New York Times article as well:

“It is clear that Ford Motor Company had control of the Argentinian subsidiary during the ’70s,” said Mr. Ojea Quintana. “Therefore, there is a direct responsibility of Ford Motor Company and that might give us the possibility to bring the case to the U.S. courts.”

Ford said in a statement the company was “aware of the verdict about the supposed participation of ex-employees of the firm in events related to human rights in the ’70s.” The company added that it “always had an open and collaborative attitude with judicial authorities supplying all the available information.”

It is evident that Ford's corporate position on its responsibility for these atrocities was ambivalent. The statement that the corporate headquarters is "aware of the verdict" is quite different from "FMC acknowledges and expresses remorse for these crimes that occurred in its Argentine subsidiary in the 1970s." 

Victoria Basualdo, Tomás Ojea Quintana, and Carolina Varsky address these issues of corporate responsibility in greater detail in "The Cases of Ford and Mercedes Benz", contained in The Economic Accomplices of the Argentine Dictatorship. In their very informative chapter they describe the background of the crimes committed at the Pacheco manufacturing plant in the 1970s:

Toward the mid-1970s, following a period of growth in the country’s automotive industry, workers at the Pacheco plant began mobilizing and organizing at the rank-and-file level, represented by some 200 factory delegates who not only stepped up their demands to management but also increasingly confronted their own national leadership at the Union of Automotive Transport Mechanics and Related Workers (Sindicato de Mecánicos y Afines del Transporte Automotor, SMATA). Pedro Troiani, a factory worker and delegate, and a member of the internal commission, was kidnapped and tortured inside the General Pacheco plant in April 1976. Later, when he testified in court, he talked about the implications and the impact of trade union activism on the way the company operated. In his testimony, he clearly explained that the internal commission received worker complaints that were not only about wages but also had to do with the working conditions and the pace at which they were forced to work, and that in 1975 the commission succeeded in signing an agreement that was highly beneficial to the workers. All of this, he said, had consolidated the commission’s position and the workers’ bargaining power in the company.

It was in that context that repressive policies were implemented, with increasing force after the March 24, 1976 military coup. Between March and May of that year, twenty-five workers in the plant were kidnapped, most of them members of the internal commission and the rest active unionists, who remained “disappeared” for thirty to sixty days. Some of them were kidnapped from their homes and taken to the Tigre police station, which operated as a clandestine detention center, while the rest were seized directly at the factory, where they were held for hours and then taken to the Tigre police station.

The relationship between company and armed forces in this process of repression of workers became apparent in different ways in the Ford case. First, the kidnapping victims have testified that they were picked up in F100 pickup trucks supplied by the company to the military. Second, there are numerous testimonies indicating that, as well as supporting the armed forces, the company asked the military to kidnap workers and trade union delegates. Arcelia Luján de Portillo, the wife of one of the victims, stated in her testimony that during a meeting she had with a military officer responsible for the kidnappings, whose last name was Molinari, the officer “opened a drawer and pulled out a list typed on a sheet of paper with the Ford logo, which he told me had ‘all the names that the company gave us of workers it wanted us to chupar,’” using the repression slang term for kidnapping and disappearing (literally, “suck up”). (159-160)

The authors make it clear that Ford's involvement was active and purposive, in support of business interests of the company:

Also, Ford personnel members participated in the interrogations of the kidnapped delegates, to extract information regarding trade union activities in the factory. One such interrogation was that of detainee Francisco Guillermo Perrotta, who was not a factory worker but one of the administrative employees, a category that until the mid-1970s had not been represented by a union. As an employee in the cost, material, and inventory analysis division, Perrotta had access to key information about the factory’s internal matters. He and another delegate from the financial area were tortured with an electric prod. During the torture session, in which his interrogators mentioned details and names that only very well-informed employees of the firm could know, Perrotta, who was wearing a hood, was able to identify the voice of the factory’s security chief, Héctor Francisco Sibilla, among the people present. Sibilla was a member of the armed forces and on July 26, 1978, after the kidnapping of workers, he was promoted to the rank of lieutenant colonel. After his time in the company, he was hired to work in security at the U.S. Embassy, a position he held until 2004. (162)

These sources make it plain that terrible crimes were committed in Argentina, not just by the military or a few rogue employees, but by the corporations themselves. Basualdo, Quintana, and Varsky quote the president of Ford Argentina in a speech given on May 13, 1980: 

As of March 1976 we were facing a challenge. In Argentina a process had begun, a change of system, a complete change in philosophy, which covered individual behaviors and the collective behavior of society as a whole. A change in mentality was necessary. In our case, we had to make a business decision and, with our actions and procedures, we showed what that decision was. Those representatives of destruction with no love of country and no God – whose eradication has cost the nation so much, and who still persist in small numbers – deserve only scorn from the decent men who work and study, day in and day out, to build this nation. (164)

This sounds very much like an unapologetic confession of a corporate decision to commit murder and other atrocities against "representatives of destruction" (labor organizers and activists).

What strategies exist to hold multinational corporations accountable for their subsidiary activities in many countries? One model that might be considered is a human rights analog to the Foreign Corrupt Practices Act. The FCPA was enacted in 1977 to create significant legal penalties against bribery and other corrupt practices in the conduct of international business (link), and the legislation has had significant effect on the practice of international business. Could we imagine an analogous set of laws and regulations that held corporate officers in multinational corporations legally responsible for crimes against humanity committed by agents of their international subsidiaries? And could such an enactment also provide for reasonably direct civil suits in US courts by foreign individuals in compensation for the damages they have suffered? A legal framework like this would present a new and behaviorally significant constraint on corporate crimes against humanity in other countries.

Ford Motor Company opened its archives in 1998 in order to demonstrate its lack of control of Ford Werke and its non-culpability for Ford Werke's use of forced labor. A similar level of transparency should have been demanded with regard to Ford's conduct during Argentina's military dictatorship.

(Here is a revealing article by Rut Diamint in The Conversation about the involvement of the US government in the dirty war in Argentina; link.)