To increase awareness of legal issues related to corporate sustainability, the
United Nations Global Compact (UNGC) and the International Bar Association (IBA), with the generous support of LexisNexis, are producing a video training manual,
Lawyers as Leaders: The Essential Role of Legal Counsel in the Corporate Sustainability Agenda. Read more
You can discuss issues raised in the videos through this blog.
Human rights module, June 2010 - summary. Watch video
Minimising risk
Mr Kell
Mr Sherman
Georg Kell, Executive Director of UNGC, and John Sherman, Co-Chair of the IBA CSR Committee, discuss some of the aims of the video and of corporate sustainability – including helping lawyers to identify problems and take proactive steps to minimise the significant legal risks which can arise from a lack of preparation and management. Risks range from community or political opposition leading to loss of legal licence to operate, to reputational damage, to costly litigation and other financial implications.
Respect for human rights
Navanethem Pillay
Navanethem Pillay, UN High Commissioner for Human Rights, stresses that business can have an impact on all human rights, both positively and negatively, and therefore businesses have a responsibility not only to comply with relevant laws, but to respect international instruments and make sure they are not complicit in human rights abuses. It is good for business too:
‘Effective incorporation of human rights considerations into business practice assists with business performance and with a business’s social licence to operate.’
Lawyers’ vital role
Caroline Rees
Caroline Rees, Director of the Governance and Accountability Program of the CSR Initiative of the Harvard Kennedy School of Government, states that governance gaps have enabled human rights violations and issues to go sometimes unacknowledged and often unsanctioned. Lawyers can play a vital role with respect to business and human rights, helping to manage risks to guard against harming individuals, the company or society.
Protect, Respect, Remedy
Professor John Ruggie
Professor John Ruggie (Special Representative to the UN Secretary-General on business and human rights)’s ‘Protect, Respect, Remedy’ framework has been implemented to educate companies and help establish an internationally accepted standard of conduct. Firstly, there is a state duty to protect human rights. Next, a corporate responsibility to respect human rights, and to have systems in place to demonstrate this both internally and externally. Strategies are required for remedy when things go wrong, for example setting up voluntary grievance mechanisms to deal with issues before they escalate, which can also save money:
‘Prevention is better than cure. It’s also cheaper than cure. Most of our measures are preventative. Is it cheaper to set up a grievance mechanism or to spend 12 years in an Alien Tort Statute case?’
Knowing and showing
Professor Ruggie addresses the question of whether a company being open and transparent in discovering issues regarding their operation and human rights could be vulnerable to attacks from adversaries. In his view, as with all things there is risk, but the alternatives could be far worse. Again, a proactive approach is recommended – rather than responding to external naming and shaming, establish a system which allows the company to know which problems to address, then to show what steps are being taken to solve them.
A proactive approach and selling the concept to management
Mark Nordstrom
Mark Nordstrom, Senior Labor & Employment Counsel, General Electric Company, echoes the idea of being proactive in getting to grips with human rights issues as increasingly work is done in emerging markets where legal frameworks supporting human rights may be less present. On the subject of convincing management of the need for proactive business and human rights strategies, Mr Nordstrom explains that he examined other companies which have unwittingly encountered problems both legal and reputational because of a lack of adequate preparation, and presented this to management. It is crucial to educate management on human rights issues, making them comfortable with the concepts and explaining the benefits.
He and fellow interviewee Debra Valentine, Group executive of Global Legal Affairs, Rio Tinto, also note that many existing company policies can be built upon, so it is not as daunting an undertaking as might be thought.
Voluntary principles
Debra Valentine
Ms Valentine advocates compliance with voluntary commitments, essentially treating them as legal obligations; documenting them, communicating them internally and externally and integrating them into compliance systems.
Ms Valentine discusses Rio Tinto’s human rights policies which make it easier to protect communities, employees and mine security.
Initiatives
Other initiatives Ms Valentine mentions include performing a communities diagnostic at regular intervals for all mining operations, issuing a human rights guide providing practical advice for people in the field, and producing a gender guide to ensure, among other things, that women would be involved in the decision making on mining projects. These are designed to bring benefits to the business and the community as a whole.
3 comments
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July 14, 2010 at 9:46 am
Jagan Devaraj
Safety standards in the construction industry in India improved significantly when multinational corporations got involved in India after liberalisation of the economy.
However, as we have seen in the case of Primark sourcing its products from emerging economies and the ethics surrounding that case, it is vital that not only the local partners of multinational corporations but also third party suppliers and partners are held responsible for breaches of human rights.
Is there a provision in future discussions and policies to look further down the supply chain to meet international regulations?
July 15, 2010 at 9:20 pm
John Sherman
The answer to your question is definitely yes.
In a June 30 paper to the OECD, Prof. John Ruggie, the Special Representative of the UN Secretary General on Business and Human Rights, outlined his view of the unique human rights issues presented by supply chain relationships: http://bit.ly/aVAFpB. It’s findings can be summarized as follows:
Companies have a responsibility to respect human rights, which means not to infringe on them. This requires companies to exercise due diligence to identify, assess, and correct human rights abuses caused not only by their operations but through their supply chain relationships.
A company can contribute to human rights abuse by its own actions, such as demanding last minute changes in its product specifications without adjusting price or delivery dates, resulting in labor violations by a supplier in a low margin business. In this case, due diligence requires that the company takes steps to address its own contributions to the abuse.
In addition, a company can also be implicated in human rights abuse merely through its link to the goods and services it buys, such as buying goods manufactured by slave labor, or hiring an external security firm that commits human rights abuse while protecting company facilities. In this case, due diligence requires that the company determine whether the supplier is crucial to its business and whether it has leverage over the supplier. The answers to these questions will help the company determine an appropriate response, which can range from attempting to mitigate the supplier’s abuse, and where that doesn’t work, to taking steps to end the relationship with the supplier.
August 23, 2010 at 11:20 am
olistik
Thank you for this initiative.
For further thoughts business and human rights:
http://olistik.wordpress.com
Olistik