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Human rights in the modern business landscape

Human rights

Globalisation has been a powerful force in recent decades and has expanded the reach of many businesses. Because of this, the duty of organisations to take a responsible approach to human rights issues and the upholding of these standards has never been greater.

However, several competing corporate concerns have stolen the spotlight from human rights in recent years. From the environmental impact of businesses, such as ongoing logging activities and the subsequent deforestation of parts of the Amazon Basin, through to illegal criminal activities like major money laundering and fraud cases that grab the headlines, the issue of human rights in the business sector has been marginalised in much of the media.

It is now essential that businesses take seriously their role in both policing and supporting basic human rights, as corporate social responsibility (CSR) programmes can play a crucial role in raising the profile of human rights successes in future. Here we offer an overview of the issues as they stand today, looking at why business leaders must now understand that addressing human rights abuses throughout their operations should be a non-negotiable priority.

Ensuring inalienable and indivisible rights for all

Going back to the start, the UN drafted the International Bill of Human Rights in December 1948 in the aftermath of the horrors of World War II. The Universal Declaration of Human Rights has become an essential legislative driver in the fight to ensure rising standards of welfare worldwide.

Today, the UN's Office of the High Commissioner uses the 30 principles of this declaration as its framework for the laws and obligations surrounding human rights. The principles include:

•    The right to life, liberty and security of person
•    Slavery and the slave trade shall be prohibited in all their forms
•    Freedom of opinion and expression
•    Freedom of peaceful assembly and association
•    The right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment
•    The right to equal pay for equal work
•    Right to rest and leisure, including reasonable limitation of working hours

Importantly, the Declaration sets out the universal nature of these rights and entitlements, defining them as equal and non-discriminatory. In addition, it stresses that individuals should ensure their own rights and freedoms do not impinge on the rights of others.

However, as there is no binding law that governs international businesses in regards to their stance on human rights, the obligation for enforcement has, until recently, rested solely within the realm of the state – the role of business in upholding rights has been unclear.

This has left something of a regulatory vacuum, and the mobility and increasing reach of large businesses has meant that corporations which failed to achieve the expected standards have gone largely unchallenged. This was the clear conclusion of a report published in by Amnesty International in 2016, which argued that a lack of regulatory oversight by the UK government was allowing many of the country's largest telecoms providers to ignore their human rights responsibilities.

Obstacle Course: How The UK's National Contact Point (NCP) Handles Human Rights Complaints Under The OECD Guidelines For Multinational Enterprises reported that 60 per cent of human rights complaints submitted to the NCP in the last five years had not been investigated.

Amnesty International has called for a stronger regulatory response to possible offences across the telecoms sector and for businesses themselves to face sanctions.

Addressing the need for accountability

Although the state remains the primary guardian of human rights in the eyes of international law, efforts have been made to make businesses more accountable.

Unveiled in 2012, the UN Human Rights Council's Guiding Principles on Business and Human Rights has helped to provide a framework for ensuring global entities now adhere to a set of international standards in the upholding of human rights. It builds on six years of development of the UN's Protect, Respect and Remedy framework, which aimed to "identify and clarify standards of corporate responsibility and accountability for transnational corporations and other business enterprises with regard to human rights".

The primary aim of these documents has been to ensure greater accountability for businesses when moving their operations to countries where human rights abuses remain commonplace. It means that in states where a combination of weak governance and little respect for human rights can lead to offences, businesses themselves can now be held responsible.

The recent Institute of Human Rights and Business's Corporate Human Rights Benchmark (CHRB) 2017 examined 98 of the largest publicly-traded businesses in the world across three industries: agricultural products, apparel and extractors of natural resources.

It measured businesses against key criteria:
•    Developing the correct internal mechanisms to conduct exacting due diligence
•    Recognition that workers should not be expected to bear the cost of competitive pricing
•    Effective remediation for worker violations.

The exercise found only six of the benchmarked companies achieved scores above 50 per cent, and marked those that fell short as potential targets for litigation and prosecution if improvements in worker rights are not seen in the near future.

These developments come as the UN's guiding principles make clear that organisations have an explicit ‘duty to protect’ all who work for and with them in the wider supply chain, ensuring a legal obligation now rests with business leaders to protect their workers from human rights abuses.

Realities of working in a global marketplace

The reality for businesses operating across the world is that their operations have an impact on many diverse communities. They therefore have a board and complex set of obligations to ensure the measures and protections that they now implement are as robust as possible in addressing potential violations in such varied jurisdictions.

Human rights violations in business can include
•    poor and unsafe working conditions
•    use of child labour
•    low pay
•    human trafficking
•    lack of visibility into supply chains that could mask offences.

An increased focus on CSR can play a crucial role in highlighting, monitoring and addressing many of these unsatisfactory, illegal working practices.

The Business & Human Rights Resource Centre cites numerous examples of organisations taking steps to address possible human rights offences, including:

•    Building materials provider LafargeHolcim announced in May that it is acting to address reports of child labour at the operations of its subsidiary Hima Cement in Uganda.
•    UK supermarket chain The Co-op has released a damning statement on modern slavery within the supply chain. The company announced that it is working diligently to stamp out issues of human trafficking and worker exploitation at all of its partners.
•    Retail giant Walmart has launched an investigation into claims of forced labour conditions at a supplier in China, after a customer reportedly uncovered a note describing long working hours, beatings and malnourishment of workers at a prison in the Chinese region of Guangxi. The note was contained in a Walmart purse purchased in Arizona.

Highlighting the breadth of issues that businesses can now face, these examples show that companies must therefore now be prepared to take forthright steps to ensure compliance on all matters of human rights or face legal action.

Engagement and implementing standards

Corporations must understand that their practices have a lasting impact on communities in all nations in which they operate. For this reason, the issue of human rights and CSR have now become intrinsically linked.

Organisations need to develop an in-depth understanding of their existing position on human rights. When issues arise, companies must be able to demonstrate they have taken all necessary steps to pinpoint potential areas of concern and to act appropriately to mitigate this risk. For companies operating within the accountancy sector in particular, this requires due diligence into client partnerships and supply chains, and ensuring all aspects of corporate structure are transparent and fully understood.

Professional services firms can help organisations reduce risk in relation to human rights issues, as well as helping them overcome the challenges of implementing new standards, policy and practices. Collaborative relationships with full disclosure lie at the heart of this process. The benefits include stronger consumer buy-in to brands that embrace their responsibilities, with increasing levels of trust and int6ernal measures to handle risk all contributing to performance and growth.

An imaginative response to adopting higher standards of human rights has been seen in many industries, and events like the Second Business and Human Rights Research Summit held in Switzerland have brought together researchers and academics to discuss these ongoing efforts to tackle abuses.

The Summit highlighted a continuing call for more effective dialogue between businesses and the structures that support them at the international, regional and domestic level. Participants also debated human rights due diligence in cross-border corporate ventures when local communities object to such plans – such as in the mining industry.

Organisational engagement and the need for more corporate action on human rights is gaining prominence in academic, business and regulatory circles. Understanding the impact of CSR activities on the issue of human rights is becoming more important than ever.

Why should businesses take action?

With the reach and impact of many businesses extending further and further – geographically, virtually, culturally – the creation of implementable standards and ensuring businesses question their own methods for ensuring that human rights are effectively upheld is more important than ever. Safeguarding the rights of the individual, while simultaneously supporting stronger global partnerships and improvement in business performance, should be the goal of all responsible organisations and regulators, wherever they are based or operate.

Watch this space!

What are the distinctive challenges and opportunities for accountancy firms?

Find out from Praxity participants in our exclusive article coming soon.