AND ETHICS
6. CONCLUSIONS: HIV/AIDS AND CORPORATE GOVERNANCE FAILURES
ambiguous. South Africa agreed to form a joint committee with the industry to formulate regulations governing its national law. It also agreed to abide by the TRIPS agreement under the WTO: an agreement that largely favours global corporations. That is, the action left TRIPS itself largely unchallenged.
Following the withdrawal of the legal action in South Africa, 80 devel- oping countries, led by African states, called for a special session of WTO to discuss their concerns over drug patents. They sought a relaxation in the interpretation of WTO rules, especially when serious public health issues were involved. A number of developed countries, led by the US and the European Union, opposed any modifications to TRIPS and continued to support the drug companies’ patent protection rights. The resulting Doha Declaration in November 2001 did not amount to the clear commitment to the prioritisation of public health and access to medicines over commercial concerns. ‘This is a serious flaw since TRIPS as it is currently written can serve as the basis for future legal challenges to countries that override pat- ents in the interest of public health’ (Bello & Mittal, 2001).
Thus, the South African case amounts to little more than a one-off con- cession rather than setting a precedent for the restructuring of international regimes in this area. Indeed, developing countries are likely to find it in- creasingly hard to get cheap drugs from 2005, as new drugs will increasingly enjoy more rigorous patent protection following the implementation of tougher intellectual property laws under TRIPS (The Economist, 30 September, 2000). Sadly, the story from South Africa is not unique.
6. CONCLUSIONS: HIV/AIDS AND CORPORATE
In this section, I provide a brief exercise in ‘analytics’ (Dean, 1999) of this South African episode in order to explore the regime of corporate govern- ance practice in evidence here. The corporate governance aspects of this story concern the explicit decisions that the pharmaceutical firms made with regard to the provision or non-provision of HIV/AIDS drugs to countries in dire need. Thus they were presented with a clear ethical choice and it is reasonable to assume that their implicit or explicit corporate governance frameworks (that is, how they conduct their conduct) informed the decisions that they made.
Turning first the Dean’s (1999)issue ofproblematisation, we have in this story a clear example of a specific situation where a governing activity (in this case, the way in which the drug firms were conducting their own conduct) can be brought into question or problematised. It is through such powerful examples that the operation of regimes can be exposed.
Looking next at questions of how this corporate governance regime worked and was challenged, the details of the actions taken are readily discernible. But of greater interest are the insights that can be gained re- garding sources of corporate power and the accountability pressues to which the firms were exposed.
The primary source of corporate power was that the companies had suc- ceeded in commodifying specific R&D-based knowledge under a system that gave valuable property rights to those who ‘owned’ such knowledge. A system of intermeshing regimes supporting global capitalism rewarded the companies for apparently taking risks by guaranteeing their rights economic exploitation and protecting these rights. Thus, the companies’ regimes of governance were also interlocked with a globalised set of regimes including the WTO and international law. Together, these property rights and global systems facilitated the companies’ actions.
The visible aspects of these regimes reveal much useful data. Thus specific international agreements exist, even the most cursory examination of which reveals that the systems actively support and sustain the profits of phar- maceutical firms via a system of international property rights. The pricing policies of the firms also make their operations highly visible. And there were in addition the court papers filed in pursuit and defence of the case.
Thus in a very real way, the nature of this set of relationships is laid open for examination.
The technical aspects that sustain the regime of practice are also clearly visible here – the procedures and mechanisms used. Thus a framework of law and international agreements shaped the whole event. There were pro- cedures to be followed by lawyers, defendants and other organisational REBECCA BODEN 90
actors. The companies bonded together in an organised way and launched a joint action against the South African government.
Different types of knowledge and expertise also were at the heart of the incident. Thus the crux of the matter concerned ownership and deployment of scientific knowledges (and indeed a contest about who had the right to use them). A second important area of technical knowledge was accounting itself – used to sustain the companies’ decisions with regard to pricing and availability. Indeed, science and accounting were heavily intermeshed knowledges at this juncture, with one determining the access to the other.
And finally, there were matters of identities. Most interestingly, govern- ments of developed countries around the world, but notably the US and UK, at first closely aligned themselves with the pharmaceutical firms. But later, as the incident unfolded, they shifted their allegiances and began to identify with the opposition to the firms. The identification of the protestors around the world was plainly with campaigners in South Africa.
A vexing and innocent question arising from this episode might be ‘How can it be that global firms nested within systems of corporate governance that place emphasis on social well-being reach decisions that plainly en- danger the lives and well-being of millions of people?’ In short, if we have corporate governance systems, how can immoral decisions be reached and actions taken?
The corporate governance regimes in place were very rational: the firms owned assets (knowledge) that, because of the profit maximisation imper- atives of the firm, it was essential to defend. The companies operated within a system of international law to defend those economic rights and engaged in the procedures in a clear, planned and (within the paradigm in which they were operating) wholly justifiable way. An intermeshing set of regimes of practice – international law, the South African court system and other gov- ernment systems and so on – combined to enhance the perceived rationality and correctness of the firms’ case. That the firms should have chosen to go to court in the first place is possibly indicative of their own belief in the rationality of their cause.
Moreover, this rationality was calculative in nature. It was supported by calculative techniques – most notably here by resort to accounting argu- ments to sustain the case on financial points. Thus it was by reference to accounting information that the companies sort to justify their pricing pol- icies. What we see in operation therefore is a rational, calculative regime of practice that is intermeshed with other, supporting, regimes.
What that rational, calculative corporate governance regime of practice produced was a fundamentally amoral set of initial decisions and actions on
the part of the firms. It may be that the reason for this lie in the entirely self- referential nature of the rationality of such regimes and their complete cap- ture and control of the calculative practices that sustain them.
Thus, this should have been a straightforward court case the likely out- come of which would have been victory for the pharmaceutical firms. Yet, without any legal compulsion or any other specific sanction, the pharma- ceutical firms, to a certain extent, backed down in this case. The story makes clear how this regime of practice operated and was sustained, but what led to its transformation?
Possible factors that contributed to the outcome include visibility and the deployment of counter-knowledges. Certainly, the involvement of high pro- file figures such as Nelson Mandela together with the media coverage that attended the episode made the operation of power here very visible indeed.
This exposed the amorality of the companies’ actions to public scrutiny, undermining their self-referential rationality. This in itself would not have changed things but for the consequential shift in identifications – especially as governments began to exert pressure on the firms.
There were two important counter-knowledges, both employed in very visible ways. Firstly, the action of TAC in seeking out alternative scientific authority on who had done the work was highly influential in shaping the outcome. And second, the challenge on the basis of the accounting infor- mation was perhaps the final straw in a teetering attempt at defending corporate privilege. Thus the calculative basis of the regime’s decisions was thoroughly undermined. Interestingly, these two counter-knowledges were deployed through the judicial system – itself a regime of practice.
Of course, this was far from a resounding victory for the campaigners and similar struggles continue elsewhere. But if politics is the continuation of war by other means, then this was a significant battle. What the story shows us is how regimes of practice (in this case, that of the corporate governance of the pharmaceutical firms) emerge, develop and are transformed. It also shows how all of these aspects of governance are intermeshed and impact on each other. It also demonstrates how visibility and the identifications that actors make are central to the unfolding drama. And finally, it shows the central role of expertise and its deployment.
This paper has sought to demonstrate that corporate governance is just one part of a system of interlocking regimes of practice that shape our thinking and lead to the exercise of power in contemporary societies. As such, it is not really possible or indeed helpful to conceptualise events such as those described here as ‘failures’. Rather, it is more useful to use such events as the means by which to peer beneath the surface of ‘corporate REBECCA BODEN 92
governance’ and to explore how it is a regime of practice that is influential in the exercise of power and an element in the assemblage that constitutes our
‘governmentality’. Of course, after Foucault, we know that no power is absolute (for power to be exist it must be exercised). It is episodes such as the South African case described in this paper, where regimes of practice are challenged and made visible that permit us some insight into how such regimes are constructed, deployed and transformed. Most importantly, such approaches can assist in exposing how decisions with ethical consequences for corporate social responsibility are made and legitimised.
NOTES
1. ‘Gangmaster’ is the term employed to describe those who procure gangs of temporary labourers on behalf of the primary employer. The term is often used in the agriculture sector for people who organise, say, gangs of fruit pickers. Gangmasters may be either part of the formal or informal economy.
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