In a recent speech Human Rights Commission president Gillian Triggs argued that businesses should be held accountable for governments' violation of human rights breaches. This is in the context of Australia's offshore mandatory detention policy. Writing in these pages a week ago, The Australia Institute's Richard Denniss made much the same argument.
The logic underpinning this argument is cynical: it is difficult to hold government to account when it acts "illegally", but it is easy to hold business to account. Bullying business becomes a substitute for lobbying government to change its policies.
This anti-business strategy dresses itself up in economic terms. Those businesses that engage in immoral or illegal behaviour will lose customers and/or find it difficult to attract long-term shareholders and/or borrow money from financial institutions. Parallels are drawn with the 1980s anti-apartheid divestment campaign and the current fossil fuel divestment campaign. It seems all so reasonable.
To be clear: Australia's mandatory detention system is deliberately harsh, and the existence of offshore detention camps is immoral; if it were illegal, however, the High Court would have said so. It isn't clear that a campaign of vilification against business is a solution to that harshness and immorality.
The fact is that opposition to Australia's offshore detention policies is a minority position. Offshore detention is very popular with the electorate. We saw that in the popular response to the Tampa crisis and the outcome of the 2001 election. We saw that again at the last election when both the Labor Party and the Liberal Party tried to outflank each other on how tough they would be on border protection. Those of us who oppose Australia's bipartisan harsh approach to asylum seekers have lost the political debate.
OPPOSITION IS TO PROFIT MOTIVE NOT THE POLICY
As such, the campaign against Transfield Services, soon to be renamed Broadspectrum, is a proxy political fight. The fact is the government has contracted the running of a government program to the private sector. It isn't the private sector that is immoral but rather the government program itself. It is here that people are getting themselves confused — their opposition is to the profit motive and not the policy. Does anyone really believe that the offshore detention camps would be a more palatable and moral proposition if run by the government itself? Perhaps people think that some other company rather than Transfield Services would make a difference. But why? The government sets the terms of the contract and any other organisation would have to comply with the same contract Transfield has agreed to. The problem here isn't Transfield, it is the government.
The thing is this: publicly listed companies have greater levels of accountability than do governments. In the first instance they are accountable to their shareholders on a day-by-day basis. If they perform poorly, or their business practices deviate from community norms, their share price will be marked down. Governments, on the other hand, face the electorate once every three years. Compared with public companies, the business of government is complex, opaque and secretive.
It cannot be unethical for a business to tender for a government project that enjoys bipartisan support and widespread legitimacy within the electorate. The profit motive itself cannot be unethical. The profit motive underpins consumer sovereignty, which in turn ensures producers produce those goods and services that best meet the needs of the broader community. The profit motive serves us well — it ensures business provides the best "bang for buck" in meeting consumer needs. It ensures resources are conserved and employed in their best and highest-value uses.
Earning a profit is ethical behaviour. Those businesses that deviate too far from community standards and values will quickly find themselves being unprofitable. The campaign against Transfield Services and so many other businesses is not about those businesses being unethical or behaving illegally, but rather a campaign about the profit motive itself. Business is a soft target. Ironically the very mechanisms that make business especially accountable can be deployed by anti-business activists to wage proxy fights against government policy.
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