Nike case raises large firms’ fears over release of information

Date:17/07/03

By Karen Carstens

THE concept of corporate social responsibility (CSR) has come under fire in the United States, where a controversial court case against Nike has prompted many multinationals to reconsider just what kind of information - if any - they may want to make public in future.

And in the EU, many firms fear what could come across as an open invitation to similarly attack corporate statements via proposed EU rules on "unfair commercial practices".

The European Commission, however, has argued that this would not be the case.

At the heart of the debate lies the question of what actually constitutes a "commercial practice" and how "commercial speech" is defined and used.

In the US case, a San Francisco-based activist has attacked Nike on the grounds that it has put out misleading information on improvements in working conditions at its foreign plants. The case hinges on whether the sportswear giant's efforts to respond to public attacks on its overseas operations amounts to "free speech", which is protected by the First Amendment of the US constitution, or "commercial speech", which is not.

So how does this relate to the concept of corporate social responsibility in Europe? According to some observers, including several multinationals, there are very valid legal concerns that the "unfair" commercial practices proposal - which heads to the European Parliament for a first reading this autumn - could also be "misinterpreted", with legal attacks being launched against CSR-style information. As a result, several firms in the United States have already threatened to clamp down on their information policies, which has caused an uproar among groups such as the American Civil Liberties Union.

Firms keeping a close eye on the draft EU directive reportedly include Nike and Proctor & Gamble.

A case in the United States against Nike has sparked fears amongst multinationals about what kind of information they give out.