The human rights case against Volkswagen in Turkey

War is not only a question of ethics and humanitarian disaster. It is bad news for business.

For a car giant like Volkwagen whose business model is built on consumer appeal, it made sense to stop and pause when Turkey attacked the Kurds in Syria. A USD 1.4bln Volkswagen investment in a new plant in Turkey is being put on hold by the management, and rightly so.

Unlike areas more or less immune from consumer pressure – like some financial sectors, for example – car buying is a people thing. It is done by regular people who follow the news and don’t want to associate themselves with or stimulate crimes against humanity and war crimes through their purchases. Investing in a war-mongering country simply is bad for an international brand.

As soon as the news hit that Turkey would be starting their military invasion against the Kurds, questions about plans for genocide appeared in the public discourse. Investing over a billion in such a political climate does not make sense.

By building in a new plant next to Turkish city Izmir, Volkswagen is not risking security as much. Izmir itself is far removed from Turkey’s southern border -- although terrorist attacks in the current environment are generally not out of the question.

The risk question rather lies elsewhere. Business likes stability and predictability. Aggressive economic sanctions which are likely to be imposed on Turkey by the EU and the US would affect many economic and business aspects which the company has to factor in. Economic sanctions affect negatively the purchasing power of the population. And Volkswagen’s new business would rely greatly on the Turkish client in a market of over 80mln people.

Sanctions also have a psychological “buckle-up” effect on customers in economies “under siege”, whereby clients are less likely to want to splurge on a new car in strenuous times.

So, it is not only about reputational damage, which Volkswagen seems to be concerned with. There are real business counter-arguments which coincide with anti-war concerns.

Dogus Otomotiv, the Turkish distributor of VW vehicles, fell as much as 6.5% in Istanbul trading after the news for the Turkish offensive.

Apart from their effects on the Turkish consumer, economic sanctions will also likely keep Turkey away from international capital markets.

While some commentators do not believe that Volkswagen would scrap altogether the deal and is only delaying the decision, it is worth remembering that the Syria conflict is a complex, multi-player conflict which has gone on for more than 8 years. Turkey’s entry in Syria is unlikely to end in a month. Erdogan communicated his intention to stay in Syria until the Kurds back down. And last week it was reported that Turkish forces are already using chemical weapons on the Kurdish population which potentially makes Erdogan a war criminal. For a corporate giant like Volkswagen, giving an economic boost to such a state would mean indirectly supporting war crimes.
As Kurdish forces struck a deal for protection with the Syrian Assad forces, this seems to be anything but a slow-down. Turkey has just thrown a whole lot of wood into the fire.
Volkswagen will find itself “monitoring” the situation for a long time. There is a case for making the sustainable business decision to drop the risky deal altogether, soon.
Iveta Cherneva is an author in the fields of human rights and security who previously worked for five UN agencies and in US Congress. Her commentary appears in Euronews, The New York Times, The Guardian, London School of Economics, The Fletcher Forum, Euractiv, EU Reporter and others.

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