On September 21, 2022, almost seven months into Russia’s full-scale war on Ukraine, Russian president Vladimir Putin announced partial mobilization in Russia. This decision enacted a law that obliges companies to assist with conscripting soldiers, making them directly involved in the war Russia wages in Ukraine.
The question is, how will they respond to such an obligation?
Business & Human Rights Resource Centre (BHRRC) asked 99 multinationals working in Russia about their response to the mobilization. Only 27 companies, or just a quarter out of almost a hundred, responded to the question, but even fewer have provided a somewhat clear explanation of what they will do. None of the companies said that because of the potential direct involvement in the war, they changed their mind and decided to withdraw from the country. None of the companies decided to accelerate the winding down process and the exit from the country. And none of the answers makes the companies look good.
Earlier this year, the 2022 Edelman Trust Barometer Special Report: The Geopolitical Business demonstrated that geopolitics is now a key issue for businesses to address. An average of 59% of respondents say that geopolitics is a responsibility of business. And now, more than ever, business is expected to be an ethical participant in society. Meanwhile, as indicated by the BHRRC’s survey, the multinationals that keep operating in Russia suffer from a complete lack of basic understanding of the companies’ responsibilities in the face of the war, neither those expected by the society and their consumers nor those outlined in the United Nations Guiding Principles on Business and Human Rights.
Moreover, those remaining in Russia don’t think about what message their reaction to mobilization as employers is sending to their employees abroad. The same Edelman Trust Barometer report showed a steep drop in employee advocacy and loyalty when a company’s response to the Ukraine crisis failed to meet expectations. And employees made those expectations clear – they are less likely to be loyal (by 24 points) and less likely to be an employer advocate (by 26 points) – if their employer’s response doesn’t meet their standard.
All the companies’ approaches towards the BHRRC questions about Putin’s mobilization and towards the mobilization itself fall into one of the following categories:
When directly asked about their response to the Kremlin’s mobilization call, most companies repeated their old statements about plans for scaling back and suspending shipments or simply refer to previous statements. In particular, these were the responses of Claas, Pfizer, H&M, Unilever, Samsung, Bosch, and Continental, which even directly refused to answer the inquiry and referred to the previous statement.
Some companies spiced the old statements with a deep concern for their employees in Russia. Pfizer even said the company “has a cross-functional team of people dedicated to maintaining the safety and well-being of our colleagues, and we are continuously assessing the risks to the most vulnerable.”
Similarly to the old statements, the companies also continued to promise to monitor the situation. “We continue to monitor and review the situation, including relating to the partial mobilisation,” Unilever answered. “Bosch is following the developments in the region with great concern,” responded the German multinational engineering and technology company.
However, none of the companies explained what could be the red line for it to withdraw from the country if the mobilization were still not enough for them to stop “monitoring the situation” and move on to decisively reacting to it in practice.
Some companies reported requesting exemption from the mobilization list for their employees, demonstrating the most proactive approach among all the respondents. In particular, this approach is popular among banks, which have collaborated with the central bank of Russia on implementing it. Among them is Raiffeisenbank, an Austrian banking group. The success of the collaboration is yet to be seen, since as of October 10, Russian Ministry of Defense still hasn’t approved the central bank’s list of the banks’ employees providing critical services, who therefore shall not be mobilized.
The same approach has been used by SAP, a German multinational software company, Bayer, a German multinational pharmaceutical and biotechnology company, and Roche, a Swiss healthcare company. “We are providing statements for employees in specific roles to be handed out to military recruitment offices requesting exemption from the mobilization list,” added SAP.
Nestlé has elaborated on the idea of supplying Russians with “essential goods”. Now, the Swiss food & beverage company also claims that its “employees in Russia should be considered essential given the critical nature of our sector: producing food.”
Given that the provision of essential/critical/basic goods has been repeatedly used by 27% of the multinationals publicly communicating about their presence in Russia, no doubt, many companies would want to learn from Nestlé’s experience of how to build on the “essentiality excuse” to shield the employees from conscription.
While some multinationals are looking for a way to avoid assisting the Kremlin with the mobilization, for the French retailer Auchan the problem is not the mobilization per se but the employees who get to be mobilized. Thus, its response to the mobilization is to distance the company from the employees once they are conscripted: “Under Russian law, any employee who is mobilized has their employment contract suspended and is therefore no longer managed or paid by their employer from that time. Auchan Retail Russia therefore no longer has any ties with the very few people mobilized to date.”
This is a very peculiar message that the company sends to its 30,000 employees working in its 230 Russian stores despite Auchan’s earlier claims that it has remained operational in the country to not deprive its employees of income.
Pirelli, a multinational tyre manufacturer from Italy, has one of the least complicated and time-consuming strategies to tackle the risks of getting involved in the Kremlin’s war efforts, and it is – do nothing if you can’t change anything. In response to the BHRRC, the company said that Pirelli Tyre Russia (PTR) is incorporated under Russian laws and “shall comply with the Russian laws and regulations, including the law on the mobilization on which it does not deserve any discretionary power.” And added: “Even if PTR had decided to cease production in Russia, this decision would not have altered the government’s recruitment plans in any way, plans that are beyond any control of PTR.”
To sum it up, the BHRRC survey highlights that the multinationals are aware that they must assist the Kremlin with the mobilization and, yet, try to find their way around the obligation in order to remain in Russia despite all the risks they are assuming there now. It’s time they stop being in denial that they can keep operating in Russia and, at the same time, stay away from the Kremlin’s war efforts. The B4Ukraine coalition calls on companies to leave Russia immediately before they get irreversibly directly involved in Putin’s war against Ukraine.