An investigative series by the New York Times and a performance piece by Mike Daisey featured on This American Life have put the spotlight on Foxconn, the Taiwanese company whose massive Chinese factories manufacture some of the world's most popular consumer electronics.

As well as working with companies like Dell, Motorola, Nokia and Hewlett-Packard, Foxconn assembles popular Apple products like the iPhone and iPad.

Here's a quick look at what we know about Foxconn. (The company disputes workers' accounts of abusive conditions. In a 2010 company report, Foxconn said it promotes "employee respect, an atmosphere of trust, and personal dignity.")

Working for Foxconn

1.2 million: number of workers employed by Foxconn in China, according to the New York Times.

40: Estimated percent of the world's consumer electronics manufactured by Foxconn.

7: seconds it takes Foxconn's workers to complete a single step of their work, according to a survey cited by the New York Times.

12: Hours in a typical work shift, according to interviews with Foxconn employees.

83.2: Average hours of overtime worked each month, according to a 2010 survey of Foxconn employee.

13: age of a Foxconn employee Mike Daisey interviewed outside the gates of a Foxconn plant in Shenzen.

91: cases of underage labor found by Apple's audits of its suppliers in 2010, the year Daisey visited China.

3,000: number of workers Foxconn could hire overnight, according to Apple's former worldwide supply demand manager.

10-20: percent estimated monthly turnover in Foxconn's workforce.

$7,500: amount founder Terry Gou used to start the anchor company of Foxconn Technology Group in 1974, according to the company website.

$5.7 billion: Terry Gou's estimated net worth as of March 2011.

Living Conditions

230,000: number of workers at "Foxconn City" in Shenzen, according to the New York Times.

13: tons of rice prepared each day at the central kitchen at Foxconn City.

$0.65: meal allowance for dinner at the Foxconn City canteen in 2010.

2: number of free swimming pools there, according to The Telegraph, which noted that the pools "are said to be quite dirty."

70,000: number of workers at Foxconn's Chengdu plant who live in company dorms, according to the New York Times.

20: number of employees sometimes packed into a three-room apartment.

200: Reported number of police officers who responded to a Foxconn dormitory riot.

Deaths

17: Number of reported suicides of Foxconn workers in China between 2007 and February 2011, according to Wired. Eleven workers died after jumping off buildings in the Foxconn Campus in Shenzen, which were then draped with preventive netting. (Wired noted that the rate actually seems to be below China's national averages.)

70: number of psychiatrists employed by Foxconn to prevent suicides, according to a 2010 announcement by CEO Terry Gou.

100: Estimated number of employees at a Foxconn factory in Wuhan who stood on the roof of a factory building this month to protest working conditions and wages. Several threatened to commit suicide, according to the New York Times.

$450: monthly salary a worker involved in that protest said employees had been promised for moving from the Foxconn campus in Shenzen to one in Wuhan.

34: continuous hours a Foxconn employee worked in 2010 before he collapsed and died, according to media reports.

4: workers killed last year by an explosion at a Foxconn factory in Chengdu, China that assembles iPads.

$22: approximate daily salary earned by Lai Xiaodong, a 22-year-old college graduate, working at a Foxconn factory in Chengdu, China, according to the New York Times.

$150,000: approximate amount the company wired Lai's family after he was killed in the aluminum dust explosion.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

Executives responsible for sustainability and corporate social responsibility (CSR) programs at large companies are overwhelmingly optimistic that those initiatives will be part of the “core strategies and operations” of global businesses in the next five years, according to a new survey.

Top sustainability and CSR priorities for those companies in the year ahead, the survey found, were human rights and workers’ rights, climate change, and the availability and quality of water on a global basis.

The survey was based on data from 498 professionals representing more than 300 member companies of BSR, a non-profit global membership and consulting organization that focuses on CSR and sustainability issues; some two-thirds of BSR members are large firms with annual revenue of $1 billion or more.  The results were released in San Francisco at the organization’s annual conference, with about 1,000 participants from more than 30 countries in attendance.

Despite a poor economy, large global businesses “are maintaining, if not extending, their commitments to sustainability,” said BSR President and CEO Aron Cramer.  According to Cramer, corporate managers are concluding that sustainability initiatives help cut costs and save money, particularly in environmental programs; drive “innovation” of new products and business models; and help to “future-proof” overall corporate strategy.

Executives polled in the survey said their biggest current leadership challenge is the integration of sustainability into core business functions.  While more than two-thirds reported that their companies’ communications functions (corporate communications and public affairs) were engaged in CSR/sustainability, far fewer reported engagement by critical operational functions such as investor relations (38%), human resources (37%) and finance (18%).

According to the survey, executives continue to acknowledge that the public does not have a high degree of trust in business, with only 2% sensing “a great deal of trust” from the public. To improve that situation, executives said, the two most important actions their companies should take are to “increase transparency of business practices” (55%) and “measure and demonstrate positive social and environmental impacts” (51%).

Among top subject area priorities, the survey found “a sizeable increase” in interest around water availability and quality over the past 12 months, with 54 percent noting it as a priority, up from 47 percent last year.  Other top priorities were human rights (65%), climate change (63%) and workers’ rights (61%).  BSR’s Mr. Cramer said increased interest in human rights and worker’s rights this year may have been driven by the release in July of the UN’s Guiding Principles on Business and Human Rights.

When asked to "rate your outlook regarding the extent to which global businesses will embrace CSR/sustainability as part of their core strategies and operations in the next five years," 22 percent of the executives said they were "very optimistic" and 62 percent "somewhat optimistic" that would happen.

John Ruggie

The principles grew out of a six-year consultative process which began in 2005, when UN Secretary General Kofi Annan appointed Harvard University Professor John Ruggie as his Special Representative for Business and Human Rights.  While implementation is still in its earliest stages, the Principles have been lauded by non-governmental organizations and endorsed by major corporations. The Coca-Cola Company has praised the “flexible framework” of the Principles; GE has said they will “no doubt serve as a lasting beacon for business entities seeking (to) grow their service and product offerings while respecting human rights.”

John Ruggie recently joined the Corporate Social Responsibility practice of the law firm Foley Hoag as a senior adviser, working with the firm and its clients on issues related to implementation of the Guiding Principles; he continues his association with the Harvard Kennedy School, where he holds a chair in human rights and international affairs, and Harvard Law.  In the following interview with Business Ethics Magazine Editor & Publisher Michael Connor, Ruggie discusses implications of the Principles and why he thinks a newly-coined term – “human rights due diligence”- has already become a permanent entry in the lexicon of international business.

MICHAEL CONNOR: The new Guiding Principles rest on a framework that has what you call three pillars – “protect, respect and remedy.”  Can you explain those?

JOHN RUGGIE: Yes. The first pillar is simply that under the existing international human rights regime, states are required to protect against human rights abuses - not only those committed by state agents, but also by third parties.  So when a country adopts a human rights treaty or convention, there is the requirement that those whose rights are enumerated in those instruments are protected against abuse. By definition, third parties include business. States also have certain legal obligations under customary international law. The bedrock of the Guiding Principles is that they do not attempt to privatize human rights protection: it’s a fundamental duty of states.

Ruggie with UN Secretary-General Kofi Annan in 2004.

The second pillar is what I call the corporate responsibility to respect rights. I chose the word responsibility, rather than duty, because for the most part international law doesn't apply directly to companies.  It applies to states, and through what states do domestically, it applies to companies. The exception to the rule is corporate involvement in the most egregious human rights violations, including crimes against humanity, where domestic courts may apply international standards—as under the U.S. Alien Tort Statute. The corporate responsibility to respect human rights is a social responsibility over and above compliance with applicable laws. It is the minimum expectation society has of business conduct in relation to human rights. It means that as business goes about its business, it should not infringe on the rights of others. So manufacture your mouse traps, deliver whatever services you provide, but don’t infringe on others’ human rights in the process.

The third pillar - access to remedy - includes both judicial remedy, which again is a duty of the state to provide, and non-judicial grievance mechanisms which companies themselves may create to deal with issues before they escalate and turn into major campaigns or lawsuits.  The idea in the latter case is for companies to deal with grievances in an early stage.

MICHAEL CONNOR: What's the business case for concern about human rights?  Why should companies care?

JOHN RUGGIE: If you go to company websites, you won’t find one that says “we don’t respect human rights.”  They will invariably say - if they say anything on the subject, and more and more companies do - that they respect human rights.  I assume they do it in part because it's the right thing to do, and because expectations by external stakeholders have raised the issue on company agendas.  There are also very material reasons.  You’ll recall that way back in the 1990s Nike first got interested because there was a worldwide campaign against the company.  The extractive industry has been hit by lawsuits in courts in Europe and the United States probably more than any other sector. Internet and mobile telephone service providers are under growing legislative and social pressure for revealing user information to authorities and providing them with other tools to track down dissidents. And so on.

"It’s important to keep in mind that the principles are principles.  They're not a toolkit.  You don’t take it off the shelf and plug it in and get an answer."

MICHAEL CONNOR: So there's financial risk?

JOHN RUGGIE: There can be huge financial risks. We're still finishing a research project called the Cost of Conflict with Communities, which was triggered by a Goldman Sachs study about the international oil majors.  Goldman looked at 190 projects and found that the time from first approval to the time the first drop of oil was pumped out of the ground had doubled over the course of the previous decade, creating substantial cost inflation.  They looked into what the factors were and they discovered that it had a lot to do with various permitting issues, with resistance from communities, with demonstrations against projects, with lawsuits.

So we looked into this. One company went back over its own figures. It discovered that in a two-year period it had left $6.5 billion on the table.  Now that attracted attention.  We also did some work in the mining industry.  For a world-class mining operation, which requires about $3-5 billion capital cost to get started, there’s a cost somewhere between $20 million and $30 million a week for operational disruptions by communities.  Another estimate used by the mining industry is that an asset manager is supposed to spend between 5% and 10% of his or her time on community engagement issues.  We found that it can be anywhere from a one-third to 50%, and in some cases 80% of their time.  So there are opportunity costs, financial costs, legal costs and reputational costs.  All this has escalated tremendously, which is why companies themselves have been so interested in the UN mandate I’ve led.

MICHAEL CONNOR: Your report notes that we live in a world of “192 United Nations member states, 80,000 transnational enterprises, 10 times as many subsidiaries and countless millions of national firms, most of which are small and medium sized enterprises.  When it comes to means to implementation therefore, one size does not fit all.”  In that context, how do you go about getting these principles implemented?

JOHN RUGGIE: It’s important to keep in mind that the principles are principles.  They're not a toolkit.  You don’t take it off the shelf and plug it in and get an answer.  Issues of context, issues of industry sector, matter. The size of a company may matter. For example, you don’t want to impose the same sets of rules on a small or medium-sized enterprise that has maybe 100-150 employees and occasionally sources something from overseas that you would apply to a company that has 300,000 employees in all the countries of the world.  So it's a principles-based framework, not a rules-based system, and it certainly isn't a toolkit.  But whatever the granular operationalization that companies develop, it has to meet certain criteria, and that’s what the principles really are intended for.  They're benchmarks against which specific tools that are adopted by companies as a way they implement things can be measured by themselves and other stakeholders.

MICHAEL CONNOR: Are there specific countries or parts of the world that might be more affected by implementation of the principles?

JOHN RUGGIE: One of the things we found is that there's a negative symbiotic relationship between company involvement in human rights abuses and conflict zones -for example, the eastern parts of the Democratic Republic of Congo.  That's one of the types of situation that requires enhanced due diligence.  You're not operating in Denmark; you're operating in a conflict-affected area where the writ of the government is weak to non-existent. There are also sectoral differences: the mining industry and the oil industry, because of their huge physical footprint, have tended to generate community-related issues.  Footwear and apparel and the electronics industry have labor issues.  The IT sector has end-user issues. Pharma has access to essential drug issues. That’s why you can't write a detailed check-the-box toolkit for the globe.  But you can, as I say, provide benchmarks against which such things can be assessed.

"In just three years, the concept 'human rights due diligence' – which didn’t exist before—has entered into a variety of international and domestic policy arenas."

MICHAEL CONNOR: What's been the reaction from business so far?

JOHN RUGGIE: Business has been supportive. I made it a point to reach out to business literally from the beginning, first through the international business associations – the International Chamber of Commerce, International Organization of Employers, the U.S. Council for International Business and the like – and worked closely with them from the start.  And then individual companies started getting involved.  Over the course of the six years, we held 47 international consultations; business was invited to participate, as were other stakeholders.

A number of companies worked with us to pilot various projects. A group of Dutch companies, including Unilever and Shell, piloted the idea of “human rights due diligence” processes, which is one of the key elements in the Guiding Principles.  They spent a year examining whether they could make sense of this concept, and what it would take to make it work.  And then they issued a public report saying “Yes, this actually is a good idea, we can make it work.”

We also got five companies in different countries to pilot site-level grievance mechanisms to see how you make them work.  For example, Tesco set up a pilot in the Western Cape of South Africa for a network of fruit supplier farms.  Sakhalin Energy participated in a pilot in Russia of their natural gas operation on Sakhalin.  We had a Hong Kong-based company collaborating with us in its operations in Vietnam. Cerrejon Coal in Colombia participated. Hewlett-Packard collaborated in China.  So we tried to work with business to make sure that what we were going to propose would have legs by road testing ideas on the ground.

MICHAEL CONNOR: When you talk about human rights, what are the key conflict points?  What violations of human rights most often show up?

JOHN RUGGIE: Again, it varies by industry.  If you look at the extractive and infrastructure sectors, one of the main issues initially has to do with taking over land and resettling the population.  This has to involve adequate consultation and compensation. Particular issues relate to indigenous communities, which have special protections under many national laws and also under international law.  Then there’s issue of the physical security of the person: conflicts between companies and communities; security forces that shoot demonstrators; or, as has been often alleged and sometimes proven, security forces protecting company facilities that trade access for sex, or that rape and sometimes kill people.

In manufacturing, the issue invariably has to do with labor rights.  Do you remember the Foxconn story of last year, when there was a rash of suicides by workers?  Foxconn is a major Chinese supplier of electronic equipment, mobile, telephones, computers and the like, to western brands; those were workplace related grievances.  In the information technology and telecommunications area, a major problem in recent years has been privacy rights. The latter are not always easy cases; they pose dilemmas.  When Google faced the issue in China, they tried to figure it out: “What do we do? Can we move our servers? We don’t want to be complicit in putting dissidents in jail.  At the same time, we're in China and we can't outright violate Chinese law, otherwise we're not going to be here very long.”  One of the things we tried to do in the Guiding Principles is to better inform decision-making in dilemma situations, not to pretend that there are always easy solutions to be had.

MICHAEL CONNOR: The guidelines specifically state that businesses may be involved in adverse human rights activity either through their own activities or as a result of their business relationships with third parties.  Does that put a greater obligation on companies to closely monitor their supply chain relationships?

JOHN RUGGIE: Yes.  That's how this all started in the first place.  To go back to Nike in the 1990s, they didn't own any factories; they were buying from independent contractors.  Nike’s first reaction back then was, “This is not our problem, we're just buying stuff.”  But that argument didn't hold for very long.  So yes, it does put a greater obligation on companies to do adequate due diligence.  Now if you have 100,000 suppliers, as Wal-Mart I think does by now, you obviously can't monitor the day-to-day activities of each and every one of your suppliers.  So it becomes a risk-based approach.  Where are the areas of highest risk?  Companies have enough intelligence sources to know that. They can ask the question: “What are the sectors, what are the geographical areas, where we need to pay most attention?”  That’s part of the due diligence process.

"We now have a foundation on which we can build going forward.  It doesn't solve all the problems.  But at least we now know what the foundations are and how to frame future debate."

MICHAEL CONNOR: Take out your crystal ball for me if you can and look forward 10 years.  How broadly will these principles be embraced by countries and business?

JOHN RUGGIE: Yogi Berra said it was hard to make predictions, especially about the future (laughing). But judging from the reception and uptake so far, I think it's clear that some things are going to move fairly rapidly.  Before 2008, no one had ever used the term “human rights due diligence.”  It was introduced in my 2008 report.  It is now everywhere.

By everywhere, for example, I mean big companies - like GE and the Coca-Cola Company, which have endorsed the Guiding Principles, as have big law firms, like Clifford Chance.  Human rights due diligence is now also in the requirements of the OECD (Organisation for Economic Development and Cooperation) guidelines on multinational enterprises.  What's unique about the OECD guidelines is that they come with a complaints mechanism, so that people who feel that their human rights have been harmed can actually bring a complaint against a company to an office in any the 42 countries that adhere to the OECD guidelines.

The principle has been incorporated into a new ISO (International Standards Organisation) standard, ISO 26000.  The International Finance Corporation has updated the performance standards it requires of clients, which now reference the business responsibility to respect human rights.  The European Commission has incorporated the same principles, including human due diligence, into a new EU strategy on corporate social responsibility. In the U.S., the Dodd-Frank Act includes a due diligence element for companies sourcing certain minerals closely tied to conflict in the Democratic Republic of Congo.

So in just three years, the concept “human rights due diligence” – which didn’t exist before—has entered into a variety of international and domestic policy arenas. It is going to become standard operating procedure going forward.  Companies themselves have welcomed the principle and many are already applying it in practice because adequate due diligence can only be their friend: it provides protection in law suits and other liability issues.  It doesn't absolve companies when they commit wrongs, but if they can demonstrate that they’ve done everything possible to get things right, that can only be helpful.

Another element of the Guiding Principles that has had really good resonance inside the corporate community itself, particularly in the extractive industry, is the idea of site-level grievance mechanisms.  Again, that wasn’t anything that people generally did or talked about three years ago.  I remember being in Peru talking to a community leader; he had just led a community in a demonstration, a long shut-down of a mining operation run by an American mining company. It turned ugly, as these things often do, and people got hurt.  I met with him afterward and asked: “So what brought you to this point? Why did you close down the mine?”  He said something I'll never forget: “They wouldn't listen to us when we came to them with small problems, so we had to create a big one.”

Companies understand that it's better to deal with small problems before they escalate, particularly when they are embedded in a local community, as the extractives are.  I know of a number of companies - I don’t think they’ve announced it publicly, because they don’t want to get too far ahead of the game - that are rolling out site-level grievance mechanisms throughout their operations.

Thirdly, I think the national regulatory regimes in different countries have been as perplexed in the past by business and human rights challenges as business itself was.  But they too are beginning to realize that there are certain preventative measures - like human rights due diligence - which if you write them into policy requirements have tremendous potential positive consequences.  It's always harder to deal with issues after bad things have happened: you end up in the courts, with problems that might have taken place on the other side of the earth, and are costly to resolve.  In the past, we tended to think about effective remedy largely in terms of after the fact judicial remedy. Now the regulatory authorities in various countries are beginning to realize that there are a lot of preventative measures that can and should be used, which lower the incidence of corporate involvement in human rights abuse in the first place, and thereby also lower the burden on the rest of the remedy system.

Finally, judicial remedy will continue to evolve. Judicial reform in countries where the rule of law is weak and governments are corrupt is a slow process, but it is happening. And the web of legal liability for corporate involvement in egregious violations is expanding in the home countries of multinational corporations—a trajectory that will continue no matter how the U.S. Supreme Court rules on the applicability of the Alien Tort Statute to legal persons, such as corporations.

MICHAEL CONNOR: How does it feel, having spent six years on this project, now that it's done?

JOHN RUGGIE: It's not done.  It goes on.  When I wrapped up my mandate in June, I said to the Human Rights Council that this is not the end, but I believe it is the end of the beginning.  What I meant was that we now have a foundation on which we can build going forward.  It doesn't solve all the problems.  But at least we now know what the foundations are and how to frame future debate, which was all over the place in the past.

MICHAEL CONNOR: So is there a feeling of accomplishment about that?

JOHN RUGGIE: Yes.  I mean it hadn't been done before.  And I don’t have to travel as much (laughing).  I get to see my wife and talk to my son more often.

MICHAEL CONNOR: It seems a well-deserved change of pace.  Thanks, John, for speaking with us.

This interview transcript has been edited for length and clarity.

New documents published today cast doubt on News Corporation’s claims that top executives and editors at the now-defunct News of the World were unaware of widespread phone hacking at the paper. One of the documents had also been aggressively redacted by News Corp., which removed references that referred to top editors knowing about the hacking. We've posted the document, with News Corp.'s redaction revealed .

The document, a four-year-old letter from former News of the World correspondent Clive Goodman, asserted that other members of the staff were also using phone hacking and that the practice “was widely discussed in the daily editorial conference.” The letter also alleged that News of the World had promised Goodman, who was fired for phone hacking, that he could have his job back if he “did not implicate the paper or any of its staff.” Goodman, along with private investigator Glenn Mulcaire, both served jail time in 2007 for phone hacking, and the scandal died down after a limited investigation by Scotland Yard found no evidence of widespread hacking.

When News Corp. recently sent a copy of the letter to the parliamentary committee investigating the scandal, it removed or redacted the embarrassing allegations. But we know what the references said because Harbottle & Lewis, a law firm that conducted an internal review of News Corp., sent the committee another copy of the letter that left in those key details.

One committee member, Labor MP Tom Watson, told the Guardian that the letter from Goodman is "the most significant piece of evidence that has been revealed so far." In a statement, News International told the Guardian: "We recognize the seriousness of materials disclosed to the police and parliament and are committed to working in a constructive and open way with all the relevant authorities."

Check out the redactions that News Corp. tried to make. The Guardian also has an annotated version of the letter and a live blog tracking the latest on the scandal.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

The embattled media conglomerate News Corporation and its independent directors have not only hired top criminal defense lawyers, they’ve also hired former Justice Department prosecutors well-versed in U.S. bribery law.

The new hires are a sign that the company is taking the Justice Department’s preliminary investigation—and the potential that the inquiry may turn specifically to bribery—rather seriously. (Read our story on why News Corp. may have good reason to worry.)

The company has hired Mark Mendelsohn, who until last year was the Justice Department’s top enforcer of the Foreign Corrupt Practices Act—and an aggressive one, at that.

Here’s FCPA expert Richard Cassin, writing on the FCPA Blog about Mendelsohn’s enforcement record:

Mendelsohn's view of the FCPA and American anti-corruption policy wasn't complicated. He pushed enforcement against corporations of any size and from any country. … He also led the government's charge against individual FCPA defendants—among them KBR's Jack Stanley, entrepreneur Frederic Bourke, and the 22 shot-show defendants.

As the UK’s Guardian notes, a full investigation of possible FCPA violations would likely drag other News Corp. subsidiaries into the mess—a costly and time-consuming process, but one that Mendelsohn will be able to help the company navigate.

The company’s independent directors, meanwhile, have hired former federal prosecutor Mary Jo White, who in 2007 conducted a major internal investigation of Siemens when it faced bribery allegations. News Corp. has also hired former U.S. Attorney General Michael Mukasey, who in addition to having experience with internal investigations also has an unusual connection to the FCPA.

As we've noted, Mukasey was hired in March as a lobbyist for the Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce. His lobbying registration shows he’s working specifically to roll back aggressive enforcement of the Foreign Corrupt Practices Act.

The inquiry into News Corp. is still very early. So far the Justice Department has said that the FBI, in response to media reports and a request from lawmakers, is investigating whether News Corp. tried to hack into the voicemails of 9/11 victims and whether its payments to U.K. law enforcement violated the FCPA.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

Though News of the World shut its doors on Sunday, the UK's hacking scandal is deepening. Allegations of illegal activity have spread beyond News of the World to other Murdoch papers, and far beyond hacking into people's voice mails. With all the new details emerging, it's getting hard to keep track. Here's a brief rundown of the latest revelations. (For an explanation of the early days of the phone hacking scandal, see the chronology that follows this article.)

The News of the World drew fresh outrage last week as news broke that the family members of dead soldiers , murdered children, and 7/7 terrorist attack victims may have had their phones hacked by the paper. There have also been allegations that the paper hacked the email account of a soldier who died in Iraq.

Scotland Yard has been combing through 11,000 pages of documents seized from the home of Glenn Mulcaire, the private investigator who hacked phones for News of the World. The papers include around 4,000 names of potential phone hacking victims. Investigators are working through the list and contacting the victims -- as of yesterday, they'd only gotten in touch with 170 of them. Meanwhile, a News International senior executive is suspected of deleting "massive quantities" of phone hacking-related emails.

The Guardian reported yesterday that private investigators hired by News International papers targeted former Prime Minister Gordon Brown over the past decade, attempting to access his bank account, legal files, tax forms, and his son's medical records. News International today denied that they had "commissioned" anyone to access the son's medical records. Though it's still unknown exactly how this information was accessed, these revelations could implicate other News International papers, particularly The Sun and The Sunday Times.

Since late June, investigators have been trying to identify which Scotland Yard officers reportedly received a total of £100,000 in bribes from News of the World between 2003 and 2007. Yesterday, reports came out alleging that the News of the World bribed police officers in order to obtain contact information for members of the royal family. Scotland Yard accused News International in a press release of intentionally leaking this information to the press to undermine their investigation. (As we've reported, if they did in fact make these bribes, Murdoch employees have violated U.S. law.)

Today's New York Times also reports that top Scotland Yard investigators' phones had been hacked during the initial police inquiry in 2006, raising questions about whether police limited the scope of their now-famously flawed investigation for fear that News of The World might start airing their dirty laundry. According to the New York Times, some investigators' secrets did indeed make it into the media:

The lead police investigator on the phone-hacking case, Andy Hayman, left the Metropolitan Police in December 2007 after questions were raised in the news media about business expenses he had filed and the nature of his relationship with a woman who worked for the Independent Police Complaints Commission.

At the time, Channel 4 News [not owned by Murdoch] reported details of 400 text messages and phone calls that Mr. Hayman had sent to her.

John Yates, the assistant commissioner who has become a lightning rod for the police's handling of the phone-hacking case, had reportedly used frequent flier miles earned in the line of duty to pay for flights for his relatives.

Through all this, News Corporation has been gearing up to take over British Sky Broadcasting Group, also known as BSkyB. News Corp currently owns over a third of the company. The New York Times breaks down the details of the BSkyB deal and the actions Murdoch took this week to help its chances for survival. Parliament is expected to pass a resolution tomorrow opposing the takeover, but it would have no legal effect.

Though the weekly News of the World has closed, Murdoch's Sun seems geared to expand their operations to Sundays, raising concerns that the closing is merely symbolic.

Prime Minister David Cameron and Labour leader Ed Miliband are meeting tonight to discuss the details of an inquiry into the way the original police investigation was conducted, and a review of the UK's current system of self-regulation of the press. Currently, an independent body called the Press Complaints Commission exists as an arbiter to help the press regulate itself, and to maintain national standards of journalistic ethics in the UK. (Our managing editor wrote last week that "press commissions have never worked well" in the U.S.)

For breaking developments on the scandal, one of the best places to turn is The Guardian's live blog -- they've been out in front of this story since 2009. We're also constantly adding stories about new developments to our MuckReads feature, which collects the best watchdog reporting. Here are all the phone hacking stories.

_____________________________________________________________________________________

A brief chronology of the story thus far:

July 7, 3:20 p.m.: Rupert Murdoch2019s News International just announced its decision to close News of the World, the paper that's been accused of hiring private investigators to hack into cell phones and staging a widespread cover-up to conceal it.

We've invited two esteemed journalists who've been covering the story to guest edit our #MuckReads feature for the day: Don Van Natta, Jr. (@dvnjr), investigative reporter at the New York Times, and Sarah Ellison (@sarahlellison), contributing editor at Vanity Fair. They've been sharing the most essential reporting about the scandal and their thoughts on why each piece is significant. It2019s a great resource for those just coming to the story to get oriented.

Here's a brief summary to get you started:

The scandal goes back to 2005 (The Guardian has a useful timeline of the whole affair; here's another from the Times), when Prince William and members of the royal staff suspected their voice mail was being tampered with and asked Scotland Yard to investigate. If you're wondering how that's even possible, the New York Times has an explanation of how phone hacking works.

In 2006, News of the World royal editor Clive Goodman and a private investigator named Glenn Mulcaire were arrested and charged with hacking the cell phones. The two men served some jail time, and the editor of News of the World resigned. Scotland Yard and the U.K. Press Complaints Commission, an independent body that oversees the self-regulation of the press, conducted inquiries that didn2019t result in any shocking new findings. The story died down.

In July 2009, an investigative report by the Guardian's Nick Davies drew fresh attention to the case. Davies found that, far from being a one-off event, the phone hacking had been more widespread2014and that the paper had made massive payoffs to keep the story quiet. Ellison notes in #MuckReads that the payoffs were the News of the World's first and fatal step into denial that has led them to their untenable position today.201D

In response, the Press Complaints Commission criticized the Guardian's story, saying that there was no evidence the hacking was more widespread than News of the World initially said.

As court cases began to reveal new details about the extent of the phone hacking, a September 2010 story in the New York Times raised questions about how much News of the World editors and reporters knew and why Scotland Yard hadn't been very aggressive in pursuing the case. Van Natta Jr., one of the three Times reporters on the story, recalls a top Scotland Yard investigator's defense of the weak police response: "We were not going to set off on a cleanup of the British media."

In April, Scotland Yard opened up a new investigation and arrested a former News of the World editor and two reporters. In a June Vanity Fair piece, Ellison took a broad look at the scandal, looking at what's at stake and how this kind of thing could have happened.

This week, the Guardian reported that the News of the World had hacked into the voice mail of a murdered school girl and deleted some messages, triggering calls for a public inquiry.

Here's a list of the reported phone hacking victims so far and a round-up of phone hacking-related denials.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

Imagine you're a Fleet Street reporter at a British tabloid with a pocketful of cash. You meet a trusted source at a pub, a police officer who tells you about the royal family's confidential schedule in exchange for a small gratuity. You hand over a few quid and rush off with a photographer to stake out a health club where Camilla Parker-Bowles is toning her abs.

Guess what: If you work for Rupert Murdoch, you may have violated U.S. law. What the government nails you for could depend on how you and your bosses account for the sketchy deal with the cop.

If you're entirely honest in the company's internal books and enter the payment as a "bribe," you've just created an irrefutable piece of evidence that can be used against you and your company in a prosecution by the Justice Department for violating U.S. statutes against overseas bribery. If, as is more likely, you file an expense account which refers to the cash payment as "taxis" or "office supplies," you stand a chance of being pursued by the Securities and Exchange Commission for keeping fake records.

News International Limited, the British arm of the Murdoch empire, is a subsidiary of News Corp., a publicly traded American company which also owns The Wall Street Journal and Fox News (not to mention the Sunday Times of London, The Times of London, and the British tabloid The Sun.) Because of this, experts say, News Corp. and all of its subsidiaries come under the Foreign Corrupt Practices Act, a Watergate-era law which makes it a crime for U.S. companies to participate in bribery abroad.

The scope and number of payments remains unclear. British press reports say more than $160,000 was paid by News of the World reporters to police officers. The issue came to light last week after News International turned over a trove of internal emails to authorities.

"A small number of officers may have taken illegal payments. That is fundamentally corrupt," Met Commissioner Sir Paul Stephenson told the BBC. "If true, I will be determined to root them out, find them and put them in front of the criminal court."

After years of relative quiet, the United States has substantially stepped up the resources to prosecute companies for violating the bribery law. There are 150 open investigations of American companies, according to the law firm Gibson Dunn & Crutcher. In 2005, the Securities and Exchange Commission and the Department of Justice combined for a total of just 12 FCPA enforcement actions. By 2010 that number had jumped to 54, the law firm reports. We've written previously on this subject when it involved payments by Albert Jack Stanley , a former executive at KBR.

Unless information emerges that News Corp. executives in the United States were aware and condoned illegal behavior, it is doubtful whether the company or individual executives would face criminal prosecution in the United States, several defense lawyers said.

A prominent academic, Michael Koehler, who tracks prosecutions on his blog the FCPA Professor , is not as sure the global news giant will escape criminal prosecution.

"Look at the 2011 enforcement actions on my blog," he says. "None of these involved high level officers or board members."

But lack of evidence of executive complicity in bribery doesn't protect the parent company from civil actions. Where News Corp. may be most vulnerable is under the "Books and Records" and "Internal Controls" provisions of the FCPA, according to lawyers who practice in this field.

Even if News Corp. subsidiaries recorded the bribes accurately in their books, it could land the company in difficulty with the SEC. Since the bribery was permitted in the first place, the charges would also open up the company to questions about its internal controls.

Fines for these violations can be steep. In 2009 and 2010 combined the Justice Department charged over 50 individuals and collected nearly $2 billion in criminal fines, said Assistant Attorney General Lanny Breuer in a recent speech. In 2010, the SEC brought in almost $530 million in corporate FCPA settlements, according to Koehler's blog. Part of what makes it so lucrative for the government is that the SEC often requires the companies "disgorge" the gains they made from illicit activities and pay interest on them.

How the SEC would calculate the value of a scoop or a racy headline that resulted from a police bribe is an open question. Does one include a bump in weekly circulation? The long-time loyalty of readers? Until it was abruptly closed last week, The News of the World, the Sunday paper most closely linked to phone hacking, had Britain's largest daily circulation, with 2.7 million readers.

"What was the increased revenue because of this sensational headline is more art than science," says Koehler. "You could come up with some ballpark number."

Another cost to News Corp. would be the company-wide review the SEC or DOJ would likely demand. The company would have to satisfy the Feds that similar payments weren't made to government officials in other countries. These company reviews are part of the reason why FCPA inquiries can last for years, according to Koehler.

The statute of limitations on civil FCPA charges is five years. Reports about the illegal bribes seem to date back to 2006 so regulators would likely be mindful of the calendar. Companies are often rewarded for cooperating with the inquiries. "Raising a statute of limitations defense is not exactly cooperation mode," says Koehler.

News Corp also depends on the government for its broadcast licenses. Fox Television Stations Inc. has 269 active licenses with the Federal Communications Commission, according to the agency's website. An agency spokesman would not comment on whether FCPA violations might put those licenses in jeopardy as well.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

I have been working in corporate citizenship for two decades, so I have seen the good, the bad the ugly – and learned a lot on the way. Here’s my top ten list of observations to pass on based on McDonald’s own journey thus far:

1. Create a CSR strategic framework
Society was much simpler, from 1955, when McDonald’s was first established, to the late 1980s. We built the “trust bank” by being community leaders, giving back, and having programs that were fun and engaging for our customers.

Then came the late 1980s and 1990s. Society changed and the Internet became a force of nature. McDonald’s was under attack by activists who thought we created too much garbage, hurt the planet, and exemplified the perceived evils of globalization.

By 2000, we learned we couldn’t be reactive anymore. We needed to play offense and get strategic with our CSR efforts. We created several governance bodies and structured processes to help us identify, manage and progress on a variety of social and environmental issues in a strategic manner.

Currently, we have six areas of focus. We are a food business, so nutrition and sustainable supply chain are important. People fuel our business, so people and community are also priorities. Then there is our responsibility to the environment. And at the core of everything we do is a commitment to sound governance and ethics.

2. Sustainability isn’t an initiative
CSR is not a program, initiative or function, but a mindset that is incorporated into every aspect of business planning and operations. At McDonald’s, this comes quite naturally because our values are at the core of everything we do and from the beginning we’ve been committed to doing the right thing. Our founder, Ray Kroc, said, “If we treat our customers right, take care of our franchisees, and always do the right thing—then we will make money and profit.” To me, this statement is equitable to a definition of CSR. If you live and put your values into practice every day, you will end up being a sustainable organization.

3. CSR starts at the top
CSR has to be driven by the top boss and senior management. Otherwise, CSR is peripheral and subject to measures of convenience. Management needs to integrate, allocate the necessary resources, and have it placed in strategic plans. Jim Skinner is our current CEO. He has led a tremendous turnaround over the past seven years. And his leadership on CSR is strong and unwavering. He put CSR right into our business plan. We call it our Plan to Win. Smack dab in the middle it says, “We are going to be a socially responsible company.”

4. Aim for the Smart Zone
It is a real stereotype to think that being socially responsible is a high cost. If you control your own strategies, most CSR efforts bring forth efficiencies, measures that use less resources, or bring a connection or relevance to consumers.

So aim for the Smart Zone. Merely following the law and regulations will merely make you a follower. The sweet spot is staying ahead, but staying smart at the same time.

For example, we have our big suppliers report their environmental performance – the amount of energy, water, and waste produced per pound of product sold to us on an annual basis. We do this so that we can work with them on continuous improvement, but we also initiated this for cost saving reasons. Less energy, water and waste should equals lower cost of production – and we are seeing that in the results.

5. Anticipate and manage emerging issues
No one likes to manage a crisis, so the idea is to stay to ahead of the curve and identify the issue when it is just starting to emerge, in academic studies or from NGO initiatives. This is easier said than done. My experience in business tells me that most business leaders are focused on the here and now or the very near future. However, waiting is a mistake. When you do, you lose control and end up being pushed into a reactive position, and that is never a good thing in business.

6. Manage the open and transparent society
With the power of the Internet, there is now a very radical transparency. People can get information and use this publicly in a matter of seconds. Take this seriously and dedicate resources to providing good and accurate information to as many stakeholders as you can.

7. Manage your planet footprint
We see managing our footprint as a business necessity to ensure we will have the resources we need to be in business well into the future. Good science tells us that we are straining our natural resources. Some estimates say that it will take ten more Earths to supply the needs of the population in just 40 years. We only have one Earth, and we all need to remember that.

8. Get engaged; don’t operate in an island
Smart companies develop a sophisticated stakeholder engagement plan that includes experts, NGOs, customers, media and others who can provide expertise and credibility. At McDonald’s, we’ve worked with a range of outside stakeholders over the years – Environmental Defense Fund, Conservation International, Greenpeace and others – to develop policies and programs that can improve our social, environmental AND business performance.

9. Manage CSR globally
CSR is not the same in every country. What is important to the U.S. is different from Australia, China is different than Brazil. So CSR efforts need to be decentralized in a global enterprise. The values come from the top, but the strategies and tactics will vary in the various geographic operations.

10. Tell your story, but humbly
Lastly, and a lesson we are still learning at McDonald’s, is to tell your story, but do so in a humble way. People want to know two aspects of your business when it comes to telling your story:

The first is obvious: What are you doing? What programs and progress are you making to be a responsible company?

The second is not obvious, and most often ignored by companies. It is all about HOW you are trying to be a responsible and sustainable organization. How are you engaging with society? How are you overcoming barriers and challenges? How are you testing new ideas?

Communicate in equal doses, both the WHAT and the HOW.

Bob Langert is Vice President, Corporate Social Responsibility for McDonald's. His responsibilities with McDonald’s include social responsibility efforts, including McDonald’s social responsibility reporting; global environmental management systems and issues; global supply chain issues (e.g., sustainable agriculture, biotechnology, animal agricultural and animal welfare programs); issues management; and part of McDonald’s “Balanced, Active Lifestyles” team.

This article was first published on the web site of the Boston College Center for Corporate Citizenship.

John Ruggie, Special Representative of the UN Secretary-General for Human Rights, in Geneva, Switzerland. March 2007.

The United Nations Human Rights Council today endorsed the Guiding Principles on Business and Human Rights proposed by UN Special Representative John Ruggie.  The principles provide guidance for implementing the UN “Protect, Respect, Remedy Framework,” which rests on three pillars:

1. The state duty to protect against human rights abuses from third parties, including business, through policies, regulation, and adjudication;

2. The corporate responsibility to respect human rights, implementing due diligence to avoid infringement and address adverse impacts;

3. Access to effective remedy for victims of human rights abuses.

The council’s vote marks more than the end of Ruggie’s successful mandate. It also signals the beginning of a new chapter in the struggle to address and eliminate human rights abuses involving business. Going forward, with a new UN working group building capacity for and driving implementation of the Guiding Principles, companies will implement the human rights due diligence called for in the Guiding Principles; governments will strengthen their policies and regulations in this area; and investors and non-governmental organizations (NGOs) will align their expectations and advocacy around the principles’ standard for corporate responsibility.

Today, most CSR executives (and corporate lawyers) are likely wondering, “What does this mean for my company?”

From Unproductive Dialogue to Global Consensus

Before addressing the implications for business, it is worth examining what it took to get us here. Ruggie achieved what seemed unthinkable in 2005 at the beginning of his mandate. Back then, facing intense business opposition and strong NGO support, the UN Human Rights Commission declined to act on the so-called Draft Norms, which would have assigned to business the same human rights duties as governments (albeit a subset of rights deemed business-relevant). In essence, the business and human rights dialogue was unproductive and lacked even a common definition of the problem.

Today, the debate is driven by clear definitions and a global consensus, despite many new and arguably more complex human rights and business challenges. The consensus among governments, businesses, civil society organizations, and investors, is particularly remarkable. Organizations as varied as the International Trade Union Confederation, the International Chamber of Commerce, NGOs like EarthRights International, companies like Coca-Cola and Total, the Chinese government representative at the UN Human Rights Council, and investors representing more than US$2.7 trillion in assets have all generally voiced their support for the Guiding Principles. Granted, some advocacy groups, including Human Rights Watch and Amnesty International, have voiced important criticism, suggesting that the principles’ standards for government and business are too low. But even these organizations likely will invoke the Guiding Principles in their efforts with business, while advocating at the UN level for more stringent standards.

‘Principled Pragmatism’ and Broad Stakeholder Engagement

Ruggie achieved this level of consensus in large part by relying on two important approaches: “principled pragmatism” and broad, inclusive stakeholder engagement. His mandate and the resulting standards did not compromise on fundamental human rights principles, and it was nonetheless pragmatic about what is achievable today. Crucially, the standards did not let perfect become the enemy of good. In this vein, Ruggie notes that while the Guiding Principles will not end business and human rights challenges by themselves, they will provide “a common global platform for action, on which cumulative progress can be built, step-by-step, without foreclosing any other promising longer-term developments.”

Ruggie’s emphasis on broad and inclusive stakeholder engagement was equally important in achieving the widespread support for the principles. He conducted 47 international consultations with governments, businesses, civil society representatives, and investors. Some engagements were open, others were behind closed doors, and all were supported by an online consultation that solicited input from a wider range of stakeholders.

Ruggie’s success underscores the importance of global and inclusive stakeholder engagement, which, combined with the team’s “principled pragmatism” will surely also guide the new UN working group’s efforts to implement the principles.

‘Know and Show’ Respect for Human Rights

So what does this mean for business? The principles are neither legally binding, nor do they establish new responsibilities for business. Rather, they clearly articulate society’s current, simple expectation: Companies have a responsibility to respect human rights. That means:

• Adopting a human rights policy commitment
• Ensuring non-infringement through human rights due diligence
• Addressing any adverse human rights impacts the company was involved in
• Measuring and reporting on performance.

In short, the principles call on companies to “know and show” that they respect human rights.

Even though the principles are simply a clearer articulation of existing societal expectations, the development of effective human rights management systems will feel new to many companies. There are about 80,000 multinational companies today, and, according to the Business and Human Rights Resource Center’s list, only 271 companies have human rights policies. That number is likely to rise significantly.

While the principles provide companies with more detailed guidance on human rights policies, due diligence, and operational-level grievance mechanisms, they are not intended to be an off-the-shelf tool. Ruggie’s mandate encompassed all business enterprises, and so, in theory, the Guiding Principles apply to a multinational company like GE as much as they do to the dry cleaner down the street. They are intentionally high level and allow for customization in some areas based on the company’s size, resources, and human rights risks.

In addition to guiding the way companies implement human rights management systems, the principles will also affect companies’ relations with government and civil society. While the principles are not legally binding, the UN endorsement of and broad consensus on the principles will likely lead to an alignment of public policy and stakeholder expectations for companies around the human rights management steps outlined in the principles.

Already, governments such as Australia, Canada, the EU, and the UK have applied the UN Protect, Respect, Remedy Framework in their public policy. We can expect governments to begin implementing the principles’ many recommendations directed at them, including, for example, encouraging or requiring corporate human rights disclosure.

In addition, investors and advocacy organizations will be more consistent in their demands for companies to demonstrate and ensure respect for human rights through the measures outlined in the principles. As mentioned above, a group of 29 investors, including asset managers such as F&C and the major pension funds, PGGM and USS, have endorsed the principles, and their human rights research and shareholder advocacy will no doubt be guided by them.

Ultimately, pressure on companies to act will increase and be more consistent, which will lead to more companies establishing the necessary management systems. Many companies have already or are about to begin this process. Johnson & Johnson recently adopted a human rights policy that aligns with the expectations articulated in the principles and the UN Protect, Respect, Remedy Framework. Goldcorp commissioned a human rights impact assessment referencing the framework. And Citigroup commits in its latest citizenship report to engage with stakeholders and peers to explore how banks can implement the framework and principles. With the UN’s endorsement of the principles, more companies will follow suit.

Faris Natour leads BSR’s human rights practice, advising companies on human rights strategy, policy development, human rights impact assessments, and other elements of human rights due diligence.

A recent short video of a TED conference presentation by Kathryn Schulz talked about being wrong.

Kathryn Schultz

Schulz, who wrote Being Wrong: Adventures in the Margin of Error, said at TED that we hate to be wrong; we do all we can to avoid thinking about our being wrong. We think that getting something wrong means there is something wrong with us: “so we insist we are right; it makes us feel smart, virtuous, and safe.”

The problem, she points out, is the internal sense of rightness we experience is not reliable. “Trusting too much in feeling you are on the right side of anything can be dangerous.” She illustrates her point by saying that is how we got a torpedoed economy and 200 million gallons of oil dumped into the Gulf of Mexico.

Her TED talk has other rich ideas about being human and stepping outside our “rightness,” but her concept of “error blindness” made me think of  a number of examples where being so wedded to one’s own sense of reality had backfired. Unfortunately for leaders, their backfires make headlines.

I was reminded of Renault’s espionage case; Alan Greenspan’s dogged devotion to a market theory; a county politician’s belief about what isn’t offensive; and how the Dodgers franchise has been jeopardized by divorcing owners’ sense of personal privilege.

Renault's Carlos Ghosn

Renault CEO Carlos Ghosn wrongly accused three employees in Renault’s electric car program of selling information to the Chinese based on what the French government called a mishandled internal investigation. The problem for Ghosn was compounded by his defending the spy claims in an interview on a national French television channel saying he had “certainties” about it.

Ghosn publicly apologized and, with those senior executives involved in the investigation, waived 2010 bonuses and 2011 stock option entitlements.  They endured a public reprimand by the French government, Renault’s largest stakeholder. A security agent was later arrested for fraud and the company is revamping its security operation.

For former Federal Reserve Chairman Alan Greenspan it was about the certainty of his view on how markets behave. He was forced to admit to the House Oversight Committee that his world view, considered by critics to have led to the economic meltdown, turned out to be flawed.

Then there are the everyday convictions which demean others. Orange County (CA) Republican Party official Marilyn Davenport sent an email message to her mailing list with President Obama’s face superimposed over a chimpanzee saying “Now you know why — No birth certificate.” County Republican Party Chair Scott Baugh, one of the recipients, asked for her resignation; thus far she has refused.

At the press conference this week, she apologized to anyone she offended, saying she hadn’t realized how much it would offend people: “I offended the black people” and “I humbly receive your rebuke.” She apparently ruled out that those not African America could also be offended.

Frank and Jamie McCourt

The divorce war of Dodger owners Frank and Jamie McCourt is a cautionary tale of what happens when leaders make it about their right to lead rather than how they are leading.

While they have played out their tug of war over team ownership, media criticism has escalated the past 18 months over their Dodger stewardship, divorce filing revelations about lavish personal spending, and the franchise’s financial integrity. TMZ.com is reporting that the IRS has begun an investigation of the McCourts.

This week, Major League Baseball (MLB) Commissioner Bud Selig announced the MLB was seizing control of the Dodgers and would appoint a trustee to oversee its operations. Frank McCourt’s brief response said the Dodgers were in compliance with MLB guidelines. In other words, as bad and public as this drama and increased debt have become, McCourt isn’t budging from the rightness of his position.

So with these illustrations and more you can think of, what can we do about hating to be wrong?

The most basic is to accept it is part of being human and figure out how to mitigate our vulnerability through our receptivity to information that may be in conflict with our world view. The more we stay open to the possibility we could be wrong, the more likely we are to get beyond our own “rightness” and experience a larger reality.

It is really akin to developing an entrepreneurial spirit to constantly question, test, and have a world view that is organic, not fixed; connecting rather than isolating.

As to the minds that create racist responses or narcissistic entitlement, being “wrong” may feel especially frightening so the control they impose makes “error blindness” more pronounced, their internal sense of rightness more fallible, the potential consequences of being wrong more dire, and ethical leadership more implausible.

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a thought leader on building leadership, trust, and reputation and writes The Week in Ethics, a weekly column where this article was first published.