Issues
There is a broad body of evidence showing how some business activity has had detrimental impacts on human rights, particularly in less economically developed countries. Case studies examples highlight, for instance, violations in labour rights and the role businesses have played in fuelling conflict.
All aspects of human rights are potentially relevant to businesses. The key international standards and obligations concerning human rights are set out in the International Bill of Human Rights and other key UN conventions, including the Convention to Eliminate All Forms of Discrimination Against Women and ILO labour conventions. The UN’s overarching framework to guide companies in their implementation of human rights is the United Nation’s Guiding Principles on Business and Human Rights (UNGPs) which are based on three key principles: (i) the state has a duty to protect human rights; (ii) companies have a responsibility to respect human rights; (iii) and there should be provision of access to remedy through judicial, administrative, legislative or other appropriate means (UN-OHCHR 2011).
Some businesses have attempted to address human rights issues in their operations. However, many do not use rights language and therefore do not recognise that they are. Others have little experience of carrying out human rights due diligence or identifying material issues. Participation by those affected by business action is also often inadequate.
As human rights permeates all aspects of corporate activity, businesses should carry out due diligence and risk assessments to identify which human rights concerns are most relevant to their operations. The underpinning elements of a human rights based approach are transparency, participation and redress.
Approaches
Donor approaches
Research analysing ten donor agencies rights-based approaches (RBA) to PSD finds that donor approaches tend to reflect their own national interests in terms of social attitudes, value systems and norms (Gibb et al. 2008). Many RBA to private sector development focus on changing existing power structures, holding governments to account for rights enforcement, and developing mechanisms for addressing and redressing rights issues (Gibb et al. 2008).
Business approaches
Some businesses and sectors have introduced voluntary initiatives, standards, and corporate social responsibility (CSR) approaches to help meet their human rights obligations (See also Regulations and standards). This includes multi-stakeholder engagement and collective approaches to corporate responsibility (UN Global Compact and UN-OHCHR 2007).
The value of multi-stakeholder engagement in Sudan
ABB is a Zurich-based electro-engineering company that provides power and automation technologies. Its operations in Sudan – including the Merowe dam, the Heglig oil field – came under significant criticism from both human rights experts and shareholders. Concerns were raised that the company’s presence and activities the region were abetting violations of civil and political rights in Darfur.
In the early 2000s, ABB began an in-depth examination of its human rights practices. The company engaged with three groups: consulting specialists, stakeholders on the ground in Sudan, and its critics. With the help of specialists, stakeholder opinions were mapped. A stakeholder forum meeting was established – allowing critics to present evidence – and employees were consulted. Following the process of multi-stakeholder engagement, ABB announced the suspension of new business activities in Sudan. Sudan was also added to the list of countries the company does not engage in new business activity in. Some of the lessons from ABB’s rights-based approach include:
- Identify human rights issues at an early stage.
- Ensure that the different components of the business are working in tandem to support human rights.
- Map and engage potential stakeholders. This includes commercial partners and investors, communities and individuals affected by business activity, relevant authorities, and local and international NGOs.
Source: Popper in UN Global Compact and UN-OHCHR (2007)
Examples of voluntary initiatives lead by the business community – often in partnership with civil society, government and donors – include:
Approaches that primarily promote transparency
- The Extractive Industry Transparency Initiative (EITI): The EITI standard aims to create transparency in the governance and management of revenue from natural resources, including the full disclosure of taxes and other payments made by oil, gas, and mining companies to government.
- Kimberly process (KP): The Kimberley process certification scheme was established in 2003 in an attempt to prevent ‘conflict diamonds’ entering the mainstream diamond market (Grant 2012).
Approaches that primarily facilitate participation and worker voice
- Dhaka Principles for Migration with Dignity: These are a set of human rights based principles that enhance respect for the rights of migrant workers at all stages of employment; from recruitment through to further employment or safe return.
- Electronic industry code of contact (EICC): The EICC establishes standards relating to working conditions and environmental impact in supply chains in the electronic industry.
- Ethical trading initiative (ETI): ETI is an alliance of companies, trade unions and NGOs that aims to eliminate workplace discrimination and exploitation.
- Social Accountability 8000 Standard (SA 8000): An auditable social certification standard for decent workplaces across all industrial sectors. It takes a management systems approach which sets out the structures and procedures that companies must adopt to comply with the standard.
Approaches that primarily facilitate accountability
- AcountAbility’s AA1000 framework and standards: This framework aims to improve accountability and the performance of organisations by improving the quality of social and ethnical accounting, auditing and reporting.
Guidance
A number of sector guides have been produced by the Institute for Human Rights and Business to aid specific industries implement the UN Guiding Principles, including in the extractive sector, the ICT sector, and the employment and recruitment sector.
Human Rights: A Call to Action is a project by the Global Reporting Initiative, the UN Global Compact and Realizing Rights which aims to improve understandings of human rights issues and provides guidance for how to embed human rights in global reporting standards (GRI, Realizing Rights, UN Global Compact 2009). A recent analysis of corporate human rights reporting found that there has been some progress in recent years. Particular strengths include innovations in the inclusion of stakeholders and outside voices in reporting – such as statements from independent review panels – and supply chain reporting (Umlas 2009). Persistent challenges remain, however, including a lack of performance and impact reporting (Umlas 2009).
Impacts
There is very limited evidence on the impact of human rights and other CSR approaches on businesses and private sector development. Some experts attribute the difficulty in assessing the impacts of CSR to the voluntary nature of many standards and principles, and the lack of easily measurable targets. Others caution that there is a contradiction between some companies’ commitment to CSR approaches and their actual implementation of principles (Slack 2010).
The Ethical Trading Initiative (ETI) commissioned an extensive independent evaluation of the impact of its members’ activities. The multi-country evaluation concluded that activities related to the ETI had a positive impact on workers’ and small producers’ lives (Barrientos and Smith 2006). Some of the most visible improvements were evident in health and safety, with measurable improvements in certain indicators, including fewer accidents (Barrientos and Smith 2006). Other impacts varied by country and sector, and included reduced regular and overtime hours, less employment of children and young workers, and the provision of state insurance and pensions (Barrientos and Smith 2006).
Some single case examples show further positive results. An independent assessment of the UN’s Global Compact, for instance, found that that it has accelerated or eased change within some participant countries (McKinsey and Company 2004). Participation in the Compact also helped companies attract additional resources for corporate citizenship and acted an as accelerator for policy change (McKinsey and Company 2004).
- The Business and Human Rights Resource Centre provides a broad body of evidence on the links between human rights and business activity.
- Barrientos, S., & Smith, S. (2006). The ETI code of labour practice: Do workers really benefit? Brighton: Institute of Development Studies. See document online
- GRI, Realizing Rights, & UN Global Compact. (2009). A resource guide to corporate human rights reporting. Amsterdam: GRI/Realizing Rights/UN Global Compact. See document online
- Gibb, H., Foster, J., & Weston, A. (2008). Human rights and private sector development: A discussion paper. Ottawa: The North-South Institute. See document online
- Grant, A. (2012). The Kimberly process at ten: Reflections on a decade of efforts to end the trade in conflict diamonds. In P. Lujala & S. A. Rustad (Eds.), High-value natural resources and peacebuilding. See document online
- McKinsey and Company. (2004). Assessing the Global Compact’s impact. McKinsey and Company. See document online
- Slack, K. (2010). Mission impossible?: Adopting a CSR-based business model for extractive industries in developing countries. Resources Policy, 37, 179-184. See document online
- Umlas, E. (2009). Corporate human rights report: An analysis of current trends. Realizing Rights, UN Global Compact and Global Report Initiative. See document online
- UN Global Compact, & UN-OHCHR. (2007). Embedding human rights into business practice II. New York: UN Global Compact and UN-OHCHR. See document online
- UN-OHCHR. (2011). Guiding principles on business and human rights: Implementing the United Nations ‘Protect, Report and Remedy’ framework. New York and Geneva: United Nations Office of the High Commissioner of Human Rights. See document online