Lawfare Daily: Bananas and Corporate Accountability for Human Rights

[Introduction]

Michael Posner: Because the U.S. federal government had already found, and the company had admitted, that it had paid this basically terrorist organization that was responsible for the murders, that the court in Florida should have jurisdiction to look at this case. And they did. And the 38 million dollar judgment is a result of that.

Natalie Orpett: It's the Lawfare Podcast. I'm Natalie Orpett, Executive Editor of Lawfare, with Mike Posner, Director of the Center for Business and Human Rights at New York University's Stern School of Business and a former Assistant Secretary of State for the Bureau of Democracy, Human Rights, and Labor.

Michael Posner: Over a period of several decades, we've seen, again, a demand for justice, a demand for accountability, and a recognition in the world that there is now a global economy where a lot of big companies are operating in tough places and making the wrong choices frankly.

Natalie Orpett: Today we're talking about a recent case out of Florida where a jury delivered a verdict against Chiquita Banana, awarding 38 million dollars to the families of people killed by a paramilitary group in Colombia, and what it means for the future of corporate accountability for human rights.

[Main Podcast]

So last week, a jury found Chiquita Banana liable for human rights abuses in Colombia that had occurred in the 1990s and early 2000s. The jury awarded the plaintiffs 38 million dollars in damages. And it's a really remarkable case for a number of reasons. But in particular, and what I wanted to speak with you about, is the finding of corporate liability for human rights violations and the fact that is so rare under U.S. law. So I want to come back a little bit later to why that is more specifically.

So just to get us started here, can you tell us a little bit about this particular case against Chiquita Banana?

Michael Posner: Sure, and I'm happy to be with you. This is, as you say, a case that’s 25 years old, and it relates to what Chiquita Brands was doing in Colombia in the late 1990s and early 2000s, where they were actually paying a paramilitary group that's been designated as a terrorist organization basically money to protect their assets and to engage in a fight against other paramilitary groups. Columbia is a country that had a range of conflicts, armed conflicts, over 50 years. And this is at the end of that process. There's now a peace process in place, but there was lots of violence, lots of political violence.

And this is an American company that basically was paying a paramilitary group with a horrible human rights record for seven years to protect its assets. So it's an egregious case and it's a case where typically things like this will happen and those who are the victims, the families of people who've been killed or injured really have no recourse to go after the companies that are implicated.

This is a case that's important, I think, because the, there'd already been a finding. And in fact the company had admitted that it had paid this company, had paid them for many years and in effect was implicated directly in some of the violence that was taking place.

Natalie Orpett: And let's talk about that admission, because if I understand you correctly, this relates to the, I believe it was a 2007 Information with the Department of Justice, where DOJ had charged Chiquita under the Antiterrorism Act for its conduct, and Chiquita had paid a 25 million dollar fine to DOJ, and of course that was under a criminal statute. This case that we're talking about today is a civil suit, but can you talk a little bit about that action back in 2007 as well?

Michael Posner: Yeah, and I think the Department of Justice criminal case in 2007 is the linchpin to what happened last week. The fact is that not only was this a private security group --- that's basically the way they probably characterize themselves --- who were paid by Chiquita to provide some sort of security for Chiquita's assets, but this is a group that was designated as a terrorist organization by the U.S. government. The U.S. government pursued a criminal action and in an agreement, the company said, yes, in fact, we're working with this group that's designated as a terrorist organization. In fact, they continued to pay them after that designation was made by the U.S. government, and then, as you say, paid a substantial fine. That's a criminal case. It didn't have the benefit of actually rewarding or giving compensation to the individual victims of the violation. And so on a parallel track, some lawyers, some advocacy groups decided that they wanted to pursue a companion case, a civil case, to get some damages, to get some compensation to the victims, and that's what was decided last week.

Natalie Orpett: Right, and so my understanding is the fact, of course, as you say, that Chiquita had admitted to some of this conduct was really important in the litigation on the civil side, because not only the admission itself, but also some of the evidence that had come out in connection with DOJ's action became directly relevant to the civil suit in a way that that information may not have been accessible otherwise.

Michael Posner: That's right. And you see in there've been a number of cases where, groups like Earth Rights and others, Earth Rights International who brought this, was one of the lawyers in this case. It's often the case tha American courts are reluctant to get involved in adjudicating situations where there's been a human rights violation in some distant place.

The facts are hard to get at. The defendants are somewhere in the United States, perhaps a company like Chiquita, but the plaintiffs are from someplace else. It's very murky what's going on. This is a very easy case factually, because again, the U.S. federal government brought the criminal case, the company admitted to the wrongdoing, paid a fine, and the facts were more or less laid out.

The group has been designated, this paramilitary group is a terrorist organization. Their record of abuses is absolutely clear. It's already been established, again, by the Justice Department. And so these eight plaintiffs, these eight families of victims, come to a court in Florida now and they say, “we ought to be compensated.”

It's all been laid out. The court shouldn't have any problem dealing with the facts, even though this happened in another country.

Natalie Orpett: So let's talk about the legal claims that the plaintiffs brought, though, because the DOJ action, of course, was under a criminal statute --- as we've said, the Antiterrorism Act --- and that doesn't have a private cause of action.

So what were the legal claims? As you say, the factual record was fairly available, but the legal claims had to be something different on the civil side. What claims did the plaintiffs bring here?

Michael Posner: Well basically what they're saying, these are eight families of people who were killed and they say that this terrorist group, this insurgent group or armed group that was being paid by Chiquita, was responsible for killing their family members and that Chiquita brands paid this group and so is directly implicated in the violence that took place.

Again, this is a civil suit. They're asking for money damages, in effect compensation for wrongful death.

Natalie Orpett: Okay, so specifically, what were the laws because we'll come back to why this is so complicated as a broader matter to find corporate liability under U.S. law. But what were the legal claims in particular?

A wrongful death, but my understanding is that there were sort of two tracks in this litigation. One was claims against Chiquita executives and board members, which were under the Torture Victim Protection Act, and the claims against Chiquita were actually under Colombian law. Is that correct?

Michael Posner: That's right. And I think one of the things, maybe just by way of background, there have been a number of cases over the last 25, 30 years brought under an old statute called the Alien Tort Statute.

And it was supplemented by the Torture Victim Protection Act. I actually wrote the first version of that, which was adopted by the Congress in the 1990s. The idea of those laws is there's a crime, not a crime, but a tort, a violation of law, for something that's a violation of the law of nations, there's a broader public interest in going after those who are implicated in the violation, even though it occurred somewhere else, as long as the plaintiffs come to the United States, they can avail themselves of the court.

American courts have been reluctant, and increasingly so, to use those broader statutes in corporate cases. They're still used against, let's say, a police official in Paraguay or army generals from Ethiopia or the Philippines. But there's been a series of cases, a couple of which have gone to the U.S. Supreme Court, where the court has basically said, this is really not the way we want to use these statutes. So there's been a backtracking. And what again makes this case interesting, as you say, is that there was a parallel track. And this, by the way, this litigation's been going on for 17 years.

You have to be a marathon runner if you really want to get a result in these cases because a company like Chiquita has lots of resources. They're going to find every which way to slow it down and try to challenge what happened. But in this case, the Florida federal court accepted the notion that under Colombian law, this was a violation of Colombian law.

And again, because the U.S. federal government had already found and the company had admitted that it had paid this basically terrorist organization that was responsible for the murders, that the court in Florida should have jurisdiction to look at this case. And they did, and the 38 million judgment is a result of that.

Natalie Orpett: But what is the legal mechanism by which a U.S. federal court is hearing claims under Colombian law?

Michael Posner: Let me make a broader point, which is why I think this is most interesting. There has been a period now of 30 years where there's been a discussion of business and human rights and a recognition that in the world in which we live --- a globalized economy where you have giant companies based in the United States or Europe or elsewhere operating in countries where laws are weak, where there's what I call a governance gap --- there needs to be a way to basically create some rules of the road. So a company like Chiquita that's operating in, whether it's in Colombia or Guatemala or Ecuador, operating in countries where the law is weak and where these violations are occurring, there needs to be some way to provide a remedy, some way to provide accountability for bad action. And it's happening in different ways, and there are other, the United States took an early lead on this, there's been a backtracking in the Alien Tort Statute. But I think we're seeing a range of things happening now that suggest that the momentum is in favor of some combinations of courts and administrative agencies beginning to take greater account of what's happening globally.

And so you have a new European law enacted just a month ago that calls for mandatory due diligence. It means that all 27 European countries are going to have a law that basically regulates supply chains, not only for European companies, but for American companies and Japanese companies, anybody who's operating in Europe.

And you also have governments like the United States in this case where there's a criminal action. The Department of Justice made a judgment. This is a terrorist organization funded by a private entity. And we are going to basically go after the private entity for supporting and financially underwriting this criminal activity.

And now on the heels of that, you have this case, again, 17 years of litigation with various theories. The important thing about this case is that a court in the United States has said that an American company operating abroad is going to be legally held accountable financially for supporting a group that's committing human rights violations.

I think we're going to see more of this here. We're going to see more of it in Europe. We're going to see more of it in Canada, Australia, a range of other countries. And again, it's going to be a combination of courts being more ambitious, litigants, lawyers, finding new and creative ways to get into court, but also more regulatory action, more laws that say you can't basically get a free pass just because something happens on a distant shore.

If you're a company operating in the world, then you have to expect that somebody's going to hold you accountable if you engage in gross human rights violations or underwrite them.

Natalie Orpett: And I agree. I think that there are some really important steps being made to progress on finding corporate accountability for human rights violations.

But as you say, this case is important because the families of the individual victims get some recompense monetarily, but also get a judgment from a jury saying that this company is culpable for what happened to your family members. And I think one thing that we haven't touched on yet that's important to emphasize as well is that the nine plaintiffs here were actually bellwether cases from a multi-district litigation. So these cases were representing, I believe, hundreds of plaintiffs bringing claims on behalf of family members. And I'm curious what you think of that posture and what it accomplishes to do this as a multi-district litigation. Of course, there's another case actually starting in July against Chiquita as well.

But for this one in particular, hundreds of people represented via this multi-district litigation get this verdict from a jury. What does that tell them? What does that accomplish?

Michael Posner: I think in all of these human rights cases people who are on the receiving end, those who either themselves or their family members are either killed or injured by gross abuses, often have a feeling in their own country that there's no legal remedy.

There's no way to basically be compensated. And this means both financial compensation and some official recognition that there was a wrong done to them. And so in this case, as you say, for not only the direct plaintiffs, but for the group of litigants over these many years to feel that there is now a court judgment in the United States, that Chiquita has been held accountable, held liable, that it's paid a multi-million dollar judgment, that there's more coming, I think it sends a really important signal of accountability; and it will never bring their family members back, those that were killed, but it does give them some sense of justice and a sense that there is some meaningful human rights remedy for what's happened.

We're going to see, I think, more efforts to do this sort of thing and to use even class action kinds of litigation. I was involved 20 years ago in a case involving Ferdinand Marcos in the Philippines. It was a case in Hawaii where there were 10,000 torture victims and their families who brought the case against the Marcos estate.

So I think the key here is to find the representative litigants whose cases are strong. Who illustrate what the problem is, what the violations were, and try to have it be as comprehensive as possible so that more people can feel that sense of remedy, and so that the resources, the remedy, and the damages can be shared among a larger group.

Natalie Orpett: And what are those strong cases? What do you look for when you are trying to find the ideal bellwether cases that can represent this larger population of claimants?

Michael Posner: The first thing, the most important thing, is that you have a clear nexus, a connection to the party that you're targeting.

In this case, it would be the terrorist group, the armed group that Chiquita hired. And so you want clean facts. You want to be able to say that this paramilitary group basically killed my daughter, my son, my husband on this day. And I have proof of that. That's the first thing. And then the second thing in these cases is to make the connection, and this is often hard, between a global company and the wrongdoers.

In this case, what made it easier is that Chiquita, 15 years ago, reached an agreement with the Justice Department saying, yeah, we paid these people for seven years and paid a fine for that. So that's often the hardest piece to connect. We need clear facts in the case that the wrongdoer either killed or injured my relative, and secondly, that there's a direct connection with the global brand.

Natalie Orpett: And it seems to me that really one of the challenges in a lot of this litigation is evidentiary matters, not just, as you say, bringing finding the cases where the nexus is clear, but also just finding the actual evidence that you can admit at trial, getting through discovery and finding documentation of those connections.

Michael Posner: It's hard enough to do this in a U.S. context, proving facts of a crime or a related civil suit is difficult, it's always difficult. Unless it's on tape or you've got a confession, you're having to, in a painstaking way, make the connection between the perpetrator and the victim.

It's doubly complicated or 10 times more complicated if it's happening in a foreign country. And especially a country where you may not have the best local police, you may not have a local justice system that aids in this effort. Obviously the best result here would be that there would have been litigation in Colombia where the government there would have brought a case against this armed group and brought a case against Chiquita and held them accountable in the place where it happened.

But that doesn't happen very often. It's certainly more difficult to motivate a country, a government where the legal system is weak and takes a very long time. And so what you need to do in these cases is basically go out and do the fact gathering at a distance and basically make the case.

It took 17 years here to get to this place. But to credit to the lawyers, they did the painstaking work. They found the way into the court. They made the factual case, and they made the case that persuaded a jury that these families deserve compensation.

Natalie Orpett: Yeah, and I noticed actually that at one point in the litigation, Chiquita had actually moved to dismiss on the grounds of forum non conveniens, arguing that the case was more properly brought in Colombia.

And the court had held that no, the possibility of litigating there would not be an adequate substitute under the requirement for forum non conveniens. Which means the plaintiffs also had to convince a court of the ability of a country to have a justice system that could stand up to the ability to find some justice for these plaintiffs.

That seems to me in and of itself a real uphill battle.

Michael Posner: It's a huge uphill battle. And you can go back to the big chemical spill in India in Bhopal where Union Carbide fought for years to keep the case out of the United States. I was involved in a case involving Exxon as an expert witness.

That case took 21 years. It involved a similar kind of thing, and Exxon was very effective in trying to move the case to Indonesia, trying to delay, et cetera. A week before the case finally was going to go to trial, they settled. But you have to have a strong stomach to try to take one of these cases on, and a lot of patience, a lot of perseverance.

It's factually hard, it's legally hard, and you're dealing with big companies that have big checkbooks, and so they have the ability to string it along for a very long time.

Natalie Orpett: Which obviously makes it incredibly hard for the plaintiffs, the individual plaintiffs as well, to continue waiting and waiting for some sort of justice.

Michael Posner: That's right. It can be very frustrating, but at the end of the day, when you talk to people that are, again, the victims of these violations, there's a sense of, “I really need to find, I need some official recognition that a wrong was done to my family member.” It's about the money, but it's also about the official recognition and acknowledgement, an official acknowledgement that some terrible thing happened to my family member.

And so they're willing to wait. They're willing to pursue. It's not easy for them. It's emotionally exhausting. And there is often a sense this is not going anywhere. But once there is a judgment as there was here last week it's a very gratifying feeling and it does allow them to move forward with their lives.

Natalie Orpett: It strikes me the other complicating factor of delay is that it makes it even harder to gather the evidence. Because evidence can spoil over time, it can be harder to find witnesses, for example, to get all of the proof that you need, especially as the litigation becomes more complicated, gets narrower and narrower as to what is relevant and what needs to be admitted into court.

And I wonder what your thoughts are on, given that complication and given what we had here, which was, as we've said, the prior DOJ action, Chiquita having actually admitted to a number of facts that were directly relevant to the plaintiff's claims here, what hope do other cases have for getting the requisite evidence if there isn't a prior DOJ action, for example?

Michael Posner: It's clearly much harder, and I'm an incrementalist, so I believe that we have to take these one at a time and try to build some momentum to make it easier, to make it faster, to make it more possible for more of these cases to be brought. But the lesson for me of this case, or one of the lessons, is that it's very important for the federal government here or elsewhere to look for ways to be part of the solution.

The criminal action, the fact that this was a designated terrorist organization under U.S. law, the fact that there was a settlement of a criminal case with a finding, an admission by Chiquita, that they were funding this terrorist organization makes this case so much easier. And others are going to have a harder time making the case if they don't have that set of facts.

Natalie Orpett: Yeah, and one other thing that was really unique about this case, I thought, is that much of the evidence came from this DOJ action, but much of it also came from a project that the National Security Archives was doing separately, and they were documenting as part of their project. Their general work is to document all sorts of national security related matters, and they had a project documenting human rights abuses in Colombia. And in the course of that, they had filed just, it seems like, a ton of FOIA litigation requesting documents from Chiquita and had to litigate many of those requests. I know at one point, Chiquita actually brought suit against the SEC to try to prevent it from making disclosures to the National Security Archives.

But my understanding is that a lot of, especially the documentary evidence, came from this National Security Archives project as well.

Michael Posner: Yeah, that's an important point. Again, if we take a snapshot of where we are and where we were two decades ago or three decades ago, you have now growing expertise outside of government.

The National Security Archive has done a fantastic job documenting a whole range of country situations and human rights situations using the Freedom of Information Act gathering data from human rights groups, local human rights groups, as well as international groups. You also have forensic teams.

There's a growing body of forensic doctors and anthropologists that have become much more proficient in gathering data from gravesites, from mass gravesites using DNA and the like, and so there's a much, I would say, richer, broader resource now available to the litigators to not only rely on, as in this case, the Justice Department, but to look for this web of organizations like the National Security Archive and like the Argentine Forensic Team and others who are basically now part of the picture, part of the international architecture that's made it possible for these kinds of cases to go forward.

A lot of those organizations are also providing resources to these international courts, the International Criminal Court or the specialized criminal tribunals for Yugoslavia and Rwanda, Sierra Leone and the like. So we're seeing, I think, the broader, more hopeful piece of this. It's slow. It's painstaking. It's very difficult. But over a period of several decades, we've seen, again, a demand for justice, a demand for accountability. And a recognition in the world that there is now a global economy where a lot of big companies are operating in tough places and making the wrong choices, frankly, supporting actions, supporting these paramilitary groups or others that are committing human rights violations, and that should not be tolerated.

And so it's some combination of government action, administrative action, regulatory, criminal, and the work of these non-governmental organizations that are making this happen. I think that's the trend forward. We're going to see more of it. It's going to be more effective and over time, it's going to become a more routine part of the way we look at the world.

Natalie Orpett: Great. I want to switch gears quickly from the evidentiary challenges that we've been talking about to, to drill down a little bit more on the complications around the legal arguments here. I wanted to ask you to drill down a little bit on the restrictions under the Alien Tort Statute that you were describing.

That was, for a period, the main vehicle through which human rights claims were being brought in the United States. And then we had Kiobel and Nestlé and Cargill out of the Supreme Court that really narrowed that as an option. And now, as you said, lawyers are being forced to come up with creative ways of bringing claims.

Can you talk through that evolution?

Michael Posner: So let me go back, say a few sentences about the Alien Tort Statute. It was enacted in the first Continental Congress in 1789. And it basically says that an alien can bring an action in tort that violates the law of nations. Nobody kept good records then, so we don't exactly know what they meant, but people have a sense that it was to protect diplomats, perhaps to deal with pirates on the high seas. But the statute basically lay fallow for 200 years. And in 1980, a case was brought in New York --- the Filártiga case --- to revive this sleepy statute, and it basically was a case brought by the family of a young man who had been tortured in Paraguay and his torturer was in Brooklyn in the United States; he was picked up and held by immigration authorities, and the case was brought, a civil case against him for violating the law of nations, and that was defined as torture.

And there were a series of cases involving government officials that took the same tact, with some considerable success. Somewhere along the way, people --- lawyers --- got the idea, let's now apply this to companies. And there were a couple of early successful cases, the most prominent a case involving a pipeline in Burma, in Myanmar, that was built with slave labor and that the oil company Unocal, which is now Chevron, was involved in building. That was the first and probably most successful application of the Alien Tort Statute to a company. There's another case involving Yahoo in China, some other cases as well, but there was a real pushback by big companies. And they launched a pretty effective concerted effort to challenge the idea that this law ought to be applied to companies, especially foreign companies.

And the biggest case, Kiobel, involved shell oil in Nigeria. Again, a case of violations of human rights in the Niger Delta. And the Supreme Court basically said almost that this really shouldn't be applied to a company, and especially a foreign company. And there have been several other cases that have tested the proposition, but at least I would say the current U.S. Supreme Court frowns on the application of this old statute in corporate settings. It's possible there's still room to find a new way into it, but I think what most lawyers would say is we now need to find some alternative ways into the courts.

Natalie Orpett: So you've said a couple of times, there are a wide number of actors besides the courts, besides private litigants who can try to take action to push for more corporate accountability.

So I'd be interested in particular for your thoughts on how specifically the government should look for ways to be part of the solution in that area.

Michael Posner: Sure. So I run a center at a business school at NYU. We spend a good amount of time trying to figure out how much can you expect companies to do on their own.

There are some things that companies will do, but it's increasingly clear that companies need the prod of a government regulating their conduct. And so we're seeing that in different ways. The United States, going back 45, 50 years, enacted the first anti-corruption law in 1977. It's called the Foreign Corrupt Practices Act.

And it's now the law of the world. If you want to do business in the United States, you better tell your employees, don't bribe a foreign official, or we're going to fine you. And so there's cases brought all the time against big companies for engaging in corruption worth hundreds of millions of dollars. Siemens was fined 800 million dollars about 10 years ago, 15 years ago.

And we've now seen this percolate more directly into issues relating to supply chains, labor practices. We've seen it now begin to percolate into the conduct of social media and technology. And leading the way is the European Union. And we've seen in the last several years, several European states --- France, Germany, the Netherlands --- adopt national laws that basically say, if you're going to do business in our country, we're going to pay attention to your global business operation, both with regard to environment, but also human rights.

And so that's now beginning to take shape in a very serious way. And it is, I think, going to be more and more where this is going to play out over the next 10 years. The United States passed a law overwhelmingly called the Uyghur Forced Labor Prevention Act two years ago. Passed the House 425 to 1.

You have a hard time finding very many things that 425 members of the U.S. House of Representatives agree on. But this is a law that basically says you cannot import things into the United States that are produced with any aspect, any goods or services coming from Xinjiang province in China, the place where the Uyghurs have been subjected to forced labor.

So you're seeing different kinds of regulation, but it seems to me that some combination again of government agencies regulating and the courts providing a remedy through litigation is the way we're going to begin to develop these, what I call rules of the road for a new global economy.

Natalie Orpett: And is the Uyghur Forced Labor Prevention Act a good model, generally?

That's, as you say, quite narrow in application, especially if you compare it to laws, domestic laws, in Germany and France and the new EU legislation that's going to require all EU countries to come up with more domestic laws. Th those are all much broader. The Uyghur Forced Labor Prevention is really region specific and group specific.

Is there a way to, to expand that? Do you see that working, for example, specifically focused on other regions and other individuals, or is it a model for something that's much broader and would apply more globally?

Michael Posner: I guess I would say and, or. I think at this stage we're still testing different models.

What the Uyghur Forced Labor Prevention Act does that's different and more ambitious is to say there's a presumption that any product coming from Xinjiang province in China is the product of forced labor. So it's up to the company that is importing anything into the United States to say either there's nothing from Xinjiang or we can prove that there's no forced labor --- of course, you can't prove it because the province is closed to outside scrutiny.

So there's no way you're going to have an independent monitor or evaluator going to a factory or onto a farm in Xinjiang and evaluate what's going on. So it's more ambitious in its terms, but it's less ambitious, as you say, in terms of its scope. I think it will be interesting to see if other jurisdictions take that presumption of responsibility, burden of responsibility approach and apply it to other laws that are more general in their application.

I think we're going to see all of that play out. We're going to see things play out that are, again, the Europeans are looking at the mining industry, they're looking at technology, they're looking at labor supply chains. So we're going to see both broader application in different industries, broader application in terms of geography, but also a testing of what the standard is. And that's going to be a very important standard. One other thing I want to say that's I think going to be the real test of all this, companies are very nervous about this to be sure. And for example, the financial industry has been very adept at basically opting out of all that's going on in Europe.

But companies also are much more comfortable saying we do due diligence, we have policies and processes in place, we do the best we can. And my answer to that is it's nice that you have good policies, it's nice that you do a sustainability report, or you have a CSR office. Or you put something on your website.

The real test is whether or not your performance complies with the standard. And so I think where we're also going to see is a move to create industry specific standards. It's going to be different for mining than it is for agriculture, than it is for manufacturing, than it is for tech. And so in each of those industries, I think we're going to have to develop real substantive standards and metrics, a way to assess behavior and accountability.

At the end of the day, companies are going to need to know that, as the Florida court did this last week, there is the possibility you're going to be found non-compliant, and that's going to have a financial consequence.

Natalie Orpett: And do you imagine that those standards would be in relation to either law or regulation or set by industries as a matter of self-policing or setting up a structure that would create some aspirational norms.

Michael Posner: For the last 20 some years, I've been involved in and out, but I'm now chairing the board of a group called the Fair Labor Association. It's 60 apparel and footwear companies and, agriculture. Companies you've heard of; Nike and Nestle. It's multi stakeholder. Oxfam and other NGOs are part of it, universities are part of it, and they all have a presence on the board.

We've developed standards, nine standards, for labor practices relating to manufacturing. A set of metrics and a way to evaluate company specific conduct. Not just that they have an office, but what are they actually doing in the field. There are people monitoring a percentage of their factories to find out are the standards being met in practice.

But that's a voluntary system and most companies haven't joined. And so I think we need to go from that kind of interim step, what I would call a multi-stakeholder initiative, to government regulation. And I think the efforts like the Fair Labor Association are an opening to basically give governments guidance on what will that look like.

Governments are going to need to develop internal capacity to do in effect what the Fair Labor Association is doing for those 60 apparel companies or the handful of agriculture companies that are part of the organization. You need to have standards, you need to have metrics, you need to have a way to evaluate conduct, performance, and then you need to figure out what constitutes non-compliance and how you create accountability for that.

That's an ambitious undertaking. It's not going to happen overnight, but unless we get to that place, I think we're not going to really change the conduct of companies. They're going to say, we do due diligence. We have a committee that's studying this. We do a report. We're doing our best. We're on a journey. Companies always tell me they're on a journey. And I say, are you on a journey to make a profit? No, we have to be serious about this. We need real data, real metrics, real standards, and real accountability.

Natalie Orpett: Let's hope that the progress that you are optimistic for plays out and continues. I think that's a great place to leave it. Mike Posner, thank you so much for joining us.

Michael Posner: My pleasure. Thanks for having me.

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