Top Ten Business and Human Rights Issues in 2012

To mark International Human Rights Day, IHRB has published its annual list of the Top 10 Business & Human Rights Issues for the forthcoming year.

Note: These ten issues are not ranked in order of importance.

As Western economies continue to struggle, public spending cuts take hold and unemployment rises, protection of workers’ rights is being squeezed in many countries. In some industry sectors, such as manufacturing, high commodity prices, means the ‘race to the bottom’ for sourcing labour is gathering pace...

With rising unemployment and a growing trend for low-paid labour to migrate from the formal to the informal sector, from permanent to temporary contracts, casualisation of work presents a very real concern for worker protection.

Workers in the informal sector cannot join trade unions; they do not enjoy the rights to and benefits of freedom of association, collective bargaining or worker representation. They do not have statutory employment benefits. Very often, they have no contracts. This is increasingly true for agricultural workers, those in the hospitality sector, home-workers in the apparel sector, for example.

While business has a responsibility to respect the rights of its workers, governments also have a duty to protect their citizens, and ensure social protection within a legal framework of proper enforcement of labour regulation. The Gangmasters’ Licensing Authority, a very effective regulation and enforcement mechanism in the UK overseeing the recruitment and employment of vulnerable workers in industries such as agriculture and food-processing, is at risk of being axed due to government cuts, leaving unscrupulous labour brokers and employers poorly regulated and vulnerable workers more open to exploitation.

The ITUC is one voice of many voicing growing concern about ‘the erosion of the protection granted to atypical workers, such as temporary, part-time, contract or fixed term workers, in many countries.’

A significant area of focus for application of the UN Protect, Respect, Remedy Framework in 2012 and beyond should be protection of workers’ rights in both the formal and informal sector as the pressure on prices drives labour costs down in many countries around the world, and public spending cuts continue to weaken labour regulation, enforcement and social protection.

For over a decade victims of human rights abuses around the world have turned to the U.S. Alien Tort Claims Act (ATCA) for redress in the form of monetary compensation. Of the over 100 cases filed (which include allegations of child abuse, providing support to or benefiting from security forces, and divulging the identity of Internet users), only a few have been admitted, and all have been dismissed or settled out of court...

Of the over 100 cases filed (which include allegations of child abuse, providing support to or benefiting from security forces, and divulging the identity of Internet users), only a few have been admitted, and all have been dismissed or settled out of court. Courts in the United States dealt with the cases under the principle of corporate liability, but they are divided about whether businesses can be held liable under ATCA.

In early 2012, the U.S. Supreme Court will hear Kiobel v Royal Dutch Petroleum Co. to address the issue. This case will determine whether victims of human rights abuses anywhere in the world can continue to sue their alleged perpetrators, including businesses, in U.S. civil court. The decision will have an important impact on whether the provisions of ATCA allow victims to seek justice against alleged corporate abuses.

It will also have repercussions for the future of human rights litigation. Victims will lose a unique avenue for redress if the Supreme Court denies jurisdiction to hear the cases, sending a discordant signal about corporate accountability in light of Pillar III in the UN Protect, Respect, Remedy Framework on business and human rights.

The UN Framework and Guiding Principles affirm that access to remedies for alleged human rights abuses by corporations is a key dimension in effectively discharging both states’ duty to protect, as well as corporations’ responsibility to respect human rights.

The Supreme Court’s review of ATCA highlights the current lack of available alternatives to seek redress for transnational human rights claims elsewhere, revealing the clear need worldwide for more accessible, responsive and less costly grievance mechanisms.

The UN Guiding Principles call on businesses to respect the human rights of “individuals belonging to specific groups or populations that require particular attention,” including children. There has been long-standing attention to children in the business and human rights arena, but it has focused almost exclusively on one dimension of children’s lives – working in inappropriate and often harmful circumstances – defined as “child labour”...

Other initiatives, also involving exploitation – such as sexual exploitation of children using or facilitated by the internet and sexual exploitation in tourism – are emerging.

As significant as these initiatives are, they represent only a narrow slice of the impacts that business can have on children’s lives – both positively and negatively.

The UN Guiding Principles approach offer the opportunity, and indeed a specific admonition, to consider all relevant impacts on children. They also note that as businesses consider which human rights impacts to prioritize, they should first seek to prevent and mitigate those impacts that are “the most severe or where delayed response would make them irremediable.” The growth period from birth to adulthood is a crucial one for children: they are going through rapid physical and psychological development.

Deprivations – of food, clean water, care and affection – in these developing years can have an irremediable impact on children for the rest of their lives. “Dealing with it later” is not an option for children. When choosing among competing priorities, this new dimension of “irremediable” may push impacts on children to the top of the list.

The Business and Human Rights Resource Centre has opened a new portal on children and business that is starting to capture the increasingly broader range of impacts that business may have on children’s rights. The recently launched joint UNICEF, Save the Children and the United Nations Global Compact Children's Rights and Business Principles Initiative aims to develop a set of principles that will help businesses “avoid the negative impacts that their activities may have on children, and contribute to a better future for everyone” and are expected to be launched in the spring of 2012.

Both initiatives should provide much needed practical guidance to business in thinking about children in their daily operations – and beyond.

The Internet is based on the premise of free expression and has enabled people to communicate, educate, entertain, and share information. During the Arab Spring, the Internet and cellphone technology have been used to mobilise, organize, and campaign for political change...

Some information technology companies have taken the commendable step of devising innovative tools to support dissidents, bloggers, and writers, such as encrypted technologies and ways to bypass restrictions by devising alternative routes.

But some companies have colluded with security forces by providing governments with surveillance technology to track down dissidents. Others have unquestioningly accepted government orders to restrict communication, or in the past, divulged the identity of users, leading to their arrest.

Technology companies will have to understand the consequences of their relationships with governments so as to ensure that they aren’t complicit in human rights abuses.

The Global Network Initiative is one step in that direction – it has developed principles participating companies have adopted to guide their decision-making. Pressure from watchdog groups continues, and other groups are widening Internet access in under-serviced areas or protecting digital rights.

The Silicon Valley Standard pushes the boundaries further.

These excellent initiatives and enlightened actions of companies to protect rights are necessary, but governments will be expected to do more to ensure that the right of freedom of expression is not undermined in the virtual world.

Indeed, the Special Rapporteur for Freedom of Expression has declared access to Internet as a human right, and some governments have stepped in, such as Sweden, the Netherlands, and the United States, and made made defence of freedom of expression in the cyberworld a priority.

Equal opportunity and women’s empowerment have been on the corporate responsibility agenda for some time. How will the new UN Guiding Principles make a difference to this critical dimension of the business and human rights agenda in the year ahead?

The UN Guiding Principles on Business and Human Rights describe women as “individuals belonging to specific groups or populations that require particular attention”.

This reflects an important point of principle: women are not just victims or vulnerable - not as a group, not all the time, not in all circumstances. Although there are many circumstances where women remain vulnerable – because of inherent discrimination, lack of protection or situations of poverty and conflict, there are also many contexts where women are critical forces in their communities, and as entrepreneurs and business leaders.

The Guiding Principles direct companies to consider the specific context of the specific women affected or who they may affect and adjust operations accordingly. This means more than inviting a few women to a public consultation. Meeting this aspect of human rights due diligence requires identifying and addressing the specific challenges that women and girls may be facing as a result of business operations -- considering for example, how women and girls may be disproportionately disadvantaged during land acquisitions where their legal rights are not recognised.

The Guiding Principles also highlight incorporation of gender considerations into key processes covered - impact assessments, monitoring, reporting, stakeholder engagement and grievance mechanisms. New tools like Maplecroft’s Girls Discovered database may help businesses not only start to grapple with identifying relevant sex-disaggregated data, but also to map some of the more detailed issues to be addressed during due diligence - such as women and girl’s access to land ownership, loans and non-land property.

The Guiding Principles also draw attention to a particular invidious and increasingly visible trend – gender-based and sexual violence in conflict zones.

The UN SRSG on Sexual Violence in Conflict has drawn attention to sexual violence in the very same countries covered by the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act - the Democratic Republic of Congo (DRC) or adjoining countries – highlighting the very real risk to business of potential involvement in this war crime and crime against humanity.

Companies need to understand the issue of women’s rights and leadership in these diverse contexts in order to fully live up to their corporate responsibility to respect human rights.

The UN Guiding Principles and Protect, Respect, Remedy Framework did much to clarify the duties and responsibilities of States and business, but perhaps their most tangible contribution to improving human rights performances of business lies in the Framework’s emphasis on community consultation within human rights due diligence and remedies...

Gauging human rights risk revolves around understanding the specific impacts on specific people given a specific context of operations. Undertaking meaningful consultation with potentially affected groups informs these risks and allow business the opportunity to respond before individuals and communities are impacted.

Where these risks materialise, developing operational-level and community-level communication and grievance mechanisms to address issues as they occur would see many initial problems avoid escalation into public protest, conflict and involvement of security forces, or protracted and costly litigation.

Recent findings from OECD National Contact Points (NCPs) point to the increasing importance placed on business prioritisation of local consultation in genuinely attempting to meet their human rights responsibilities. [see Footnote]

With the new breakthrough over divergent standards from the global consensus around the UN Guiding Principles and closely aligned updates of the OECD Guidelines and IFC Performance Standards, 2012 must see meaningful progress in overcoming some of the other historic barriers (intentional or not) to effective community consultation, such as limits on community information and awareness, questions of trust or confidence, barriers to access such as language, and securing free, prior and informed consent of indigenous communities prior to undertaking operations.

Footnote: See: Final Statement of Norwegian NCP Re Intex Resources; Revised final statement by the UK NCP on the complaint from Corner House et al. against BTC Corporation; and Final Statement by the UK NCP, Complaint from Survival International against Vedanta Resources Plc.

Major investors such as pension funds, shareholders, and other stakeholders such as consumers – can all potentially steer corporate values and objectives so that business respects human rights. Despite the growth in socially responsible investing, it is essential for consumer and investor pressure to develop into using more rigorous, evidenced based and articulated tools to guide business incentives and behaviours...

The ongoing economic and financial crisis has shown the destructive potential of the financial sector. Yet some investors and financial institutions have been methodically working through the process of improving research, metrics and reporting around the incorporation of environmental, social and governance considerations into their investments and some have made an explicit commitment to address and support the Guiding Principles in their work.

The human rights community must engage in this area and and do some hard thinking about how to build human rights concerns into such tools in order to leverage the enormous potential of the financial sector to support economic activities that do not undermine human rights, but in fact facilitate their realisation. The financial sector needs to collaborate on this long journey – starting with their investments and lending. It includes incorporating accountability and transparency principles into operations, paying attention to financial sector reform, and providing access for the vulnerable.

Increasingly sophisticated tools and metrics around the human rights dimension of consumption, combined with the power of the internet, are turning NGO activism into important market signals that can create value for society as well as business. But much more is needed: systems that provide credible information on human rights issues relevant to purchase decisions, going beyond core labour standards and moving into the wider range of rights – how are they defined, how are they measured, what does impact mean, and how can those be improved? The Universal Declaration calls on “all organs of society” to play their part. In 2012, mainstream investors must step up too.

Accountability, non-discrimination, and transparency are cornerstones of the human rights framework. Corruption undermines them all. In early 2011, when Mohamed Bouazizi wanted the licence to sell vegetables at a market in Tunisia, local authorities sought bribes before granting him permission to trade. Frustrated after many attempts, in an act of protest he set himself on fire and sparked the Tunisian uprising and the Arab Spring...

In India, politicians who issued licences to provide 2G mobile telecom services to companies at suspiciously low prices, were charged with corruption after a sustained campaign in the media and on the streets.

In the United States, businessmen accused of insider trading and disregarding conflicts of interest for private gain have been found guilty.

Corruption, or the abuse of power for private gain, distorts economic priorities, interferes with fair decision-making, and discriminates between various claimants of public goods in illegal ways. The links between human rights and corruption are evident.

From the poor unable to access essential services, to contracts being awarded to more expensive or less able businesses, from sub-standard equipment used in construction which can have health and safety consequences, to diversion of resources which could be deployed for more effective provision of public goods, respect for human rights is undermined by corrupt actions at every turn.

The commentary to the new UN Guiding Principles on Business and Human Rights stress that unless States take appropriate steps to investigate, punish and redress business-related human rights abuses when they do occur, the State duty to protect can be rendered weak or even meaningless. It also makes clear that procedures for the provision of remedy should be impartial, protected from corruption and free from political or other attempts to influence the outcome.

Global efforts such as the Extractive Industries Transparency Initiative show that efforts to increase transparency in transactions between companies and host governments can support efforts to root out corruption and protect human rights.

In 2012, scrutiny of corporate conduct and business relationships with governments is set to intensify. Activists who have used laws upholding the right to information will increasingly demand businesses to be brought within the purview of the law.

Whether to do business in countries with fragile or unaccountable governance inevitably poses challenging dilemmas for companies and for the international community. Any business action has an impact on the context. For example, just as conflict within a country can affect business operations, so too, the presence of companies can affect conflict...

Over the years, the international community has developed a more sophisticated understanding of the links between conflict, trade and human rights. Some governments have developed a range of measures to ensure that economic activity does not contribute to or exacerbate conflict, including through legislative means or sanctions mechanisms.

Political changes in the last year in a number of countries have raised new questions about whether existing measures to address the role of business in such contexts are effective and appropriate.

Examples such as South Sudan, which saw the end of a long war and independence for the country, the release of political prisoners in Myanmar and the Nobel Laureate Aung San Suu Kyi’s return to active politics after her release from prison, and the fall of the Gaddafi regime in Libya have changed the political and economic context of these countries.

In 2012, as the international community moves to lift restrictions and sanctions on these countries, businesses are set to explore new investment opportunities in these and many other fragile environments. When doing so, business leaders will have to carefully consider the legacy of past abuses and conflict, so as not to perpetuate them; take steps to ensure they do not become complicit in exacerbating any tensions; and act in ways that respect, and not undermine human rights.

Governments will also need to play their critical role in ensuring that companies implement the human rights due diligence steps outlined in the UN Guiding Principles and urge ongoing training and capacity development for business by using tools developed specifically for operations in high risk contexts.

Concerns continue to grow over the increase in land acquisition and use by business in developing countries, particularly in Sub-Saharan Africa, and its impact on the rights of communities that live or work on those lands. If the acquisition or use of land is made responsibly, and with due diligence, it can represent an opportunity for economic development and poverty reduction...

However, some of the more aggressive land investment deals have been described as ‘land grabbing’, and the prospects of sustainable livelihoods of farmers and indigenous peoples in local communities are under threat.

Even though the phenomena of land acquisition is not new, international NGOs such as Oxfam and Action Aid have recently mobilised efforts to tackle this issue, over the spate of large-scale evictions which lead to infringement of human rights. Business and governments must recognize the social, economic and environmental impacts of land acquisition on people, especially the most vulnerable and marginalized.

Guidelines such as the IFC Performance Standards on Social and Environmental Sustainability and the Principles for Foreign Investment in Farmland, for example, provide governments and investors with guidance on responsible land acquisition and use, and how to act with due diligence. The UN Food and Agriculture Organization is developing a framework in this regard and the Institute for Human Rights and Business has undertaken four international consultations leading to the recent release of draft guidelines for companies for land acquisition and use.

In future, businesses that do not engage with communities in land related questions will find themselves exposed to greater liability risks, particularly in countries where the government’s record of protecting human rights is poor. The UN Guiding Principles place the obligation of protecting rights on the state, but business has the responsibility to respect rights. Effective consultations with stakeholders from an early stage may provide a pre-emptive remedy to ensure that rights are not undermined at any stage of land acquisition or use.