India’s Business & Human Rights National Action Plan

In December 2018, the Indian government initiated the process of developing a Business and Human Rights National Action Plan (NAP) by releasing a zero draft - with a commitment to publish the final NAP in 2020. The Indian Ministry of Corporate Affairs led the process of drafting the NAP in consultation with other Central and State ministries. The zero draft is primarily a listing of relevant existing legislations and policies categorised under the three pillars outlined in the UN Guiding Principles for Business and Human Rights (UNGPs): protect, respect, and remedy. It does not present an analysis of the status or existing gaps in these legislations and policies. The most important part of the zero draft is its statement of commitment and an indication of the future course of action.

The vision of India’s NAP stems from the Gandhian principle of trusteeship that defines that the purpose of business is to serve all stakeholders.

The Context of India's NAP

The NAP is a policy document by which a government articulates its action to fulfil its commitment to implementing the UNGPs. The vision of India’s NAP stems from the Gandhian principle of trusteeship that defines that the purpose of business is to serve all stakeholders. Experts claim that the COVID-19 pandemic is a litmus test for the concept of stakeholder capitalism. An NAP becomes more relevant in the wake of COVID-19 in that the pandemic has exposed several systemic vulnerabilities in how businesses operate. Informal migrant workers in India are the worst hit, abruptly thrown out of work without food, shelter, and social protection - overnight. The International Labour Organization (ILO) estimates that 400 million Indian workers are at risk of sinking even deeper into poverty.

An NAP becomes more relevant in the wake of COVID-19 in that the pandemic has exposed several systemic vulnerabilities in how businesses operate.

The Guidance on developing the NAP recommends a five-phase process: initiation, assessment and consultation, drafting of initial NAP, implementation and update. The Indian government has acknowledged the importance of responsible business conduct since 2011 by introducing the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs). The NVGs were recently updated to National Guidelines on Responsible Business Conduct (NGRBC). In addition to these voluntary measures, the Securities Exchange Board of India (SEBI), which regulates stock markets in the country, has had mandatory environment, social and governance (ESG) disclosures for the top 100 companies listed on Indian stock exchanges since 2012. The mandatory ESG disclosures have gradually been expanded to now cover the top 1000 companies. These guidelines and the mandatory disclosures provide a good foundation to India’s NAP.

In February 2020, the NAP process moved to phase two of ‘assessment and consultations’. The Ministry of Corporate Affairs invited public comments and inputs to “inform the NAP development process”. An important part of phase two of the NAP development process is a ‘national baseline assessment’ that appears to be a glaring gap at this stage. Without an extensive baseline the NAP may fail to anticipate and address key implementation challenges.

For a NAP to be effective in the Indian context, it must put the rights-holder at the centre. Intersectionality has an important role in determining the effectiveness of the NAP for the most marginalised and most vulnerable groups such as Dalits (the economically and socially disadvantaged group at the bottom of India’s inequitable caste system), Adivasis (indigenous groups), women, children and informal sector workers.

A critical issue that the NAP must address is the dispossession of communities from their right to access and control over land, water and other natural resources.

Issues that India's NAP Must Address

A critical issue that the NAP must address is the dispossession of communities from their right to access and control over land, water and other natural resources necessary for their lives and livelihoods. Over 6.8 million people in India are affected by over 700 land conflicts. Another critical issue for the NAP to address is the lack of decent jobs. India faces an issue of extreme informalisation, low-skilled and low paying jobs, gender wage gap, prevalence of child labour, and forced/ bonded labour. Social protection, occupational health and safety, unionisation and collective bargaining remain a challenge in general but particularly for informal workers.

Some legislations such as the Labour Codes, Child Labour law, Maternity Benefit law, Land Acquisition Act, Recognition of Forest Rights Act could pose a conflict with the implementation of the NAP. For instance, the Child Labour (Prohibition and Regulation) Amendment Act, 2016 allows children to work in family enterprises after school hours raising concerns of increasing invisible forms of child labour.  Trade unions in India have opposed the recent labour law reforms claiming these to be ‘anti-worker’ as it makes it easier for businesses to ‘hire-and-fire’ workers while making collective bargaining more difficult for workers. State governments circumvent the process of acquiring land through the land acquisition laws by following a strategy of creating ‘land banks’ giving rise to land conflicts. A review of the status of existing laws, in consultation with affected communities and rights-holders, is therefore a crucial first step to identify gaps in legislations and implementation. The NAP must set clear goals and define accountability up to local levels.

The success of India’s NAP rests on the ability of the micro, small, and medium enterprises to adopt it.

India has a significantly large number of micro, small, and medium (MSME) enterprises. The success of India’s NAP rests on the ability of the MSME sector to adopt it. The government as well as large companies have a crucial role in building the capacity of the MSME sector through training, awareness and providing incentives.

The rising influence and dominance of technology on future of work, privacy and inequality is a growing area of concern in India. The NAP should take steps to embed accountability of technology companies on human rights issues beginning with rights of workers in the gig-economy.

A smart mix of voluntary and mandatory provisions is crucial for the NAP to create a level playing field for companies by mandating necessary minimums such as a mandatory Human Rights Due Diligence mechanism. The financial sector can play a facilitative role by aligning policy regulations in alignment with NGRBC and NAP to push for mandatory disclosures, mandatory due-diligence and grievance mechanisms in investments/ lending decisions.

NAP's Access to Remedy

Access to remedy poses a major challenge in the effective implementation of NAP. The limitation of National Human Rights Commission to accept complaints against non-State actors such as companies is a big gap. Lack of operational level grievance mechanisms could be another stumbling block for rights holder to access remedy mechanisms. Setting up multi-stakeholder committees within industrial MSME clusters could be a crucial missing piece in the implementation of Pillar 3.

The NAP process is an opportunity for India to demonstrate leadership in achieving sustainable and inclusive growth and position itself as the world’s largest sustainable and responsible economy. The NAP can serve as an important tool to guide Indian businesses to redefine its purpose and emerge out of this pandemic more humane.