Ten Things Executives Need to Know (and Do) About Human Rights
Human rights have been a concern for some companies since the anti-Apartheid divestment campaigns of the 1980s, but there has been no broad-based uptake of human rights as a business discipline. Relatively few companies have human rights in their corporate vocabulary.
This may be the year human rights go mainstream, thanks, largely, to the work of John Ruggie, serving for the past six years as the UN Secretary General’s Special Representative on Business and Human Rights.
Ruggie has forged a working consensus among companies, governments and advocates that human rights are not just a business concern, but that both governments and companies have human rights responsibilities. The Ruggie, or UN, Framework – “Protect, Respect and Remedy” – asserts that governments must protect against abuses by companies; companies must respect human rights; and victims must have access to remedies.
“Protect, respect and remedy” is a phrase that many executives will hear and be asked to explain over the next twelve months. This Spring, the UN Human Rights Council is expected to endorse Guiding Principles for both governments and companies to meet their responsibilities under the Framework. For the first time, companies have a clear roadmap for making human rights part of their compliance and corporate responsibility efforts. If you are, or advise, one of those executives, there are ten things you need to know (and do) about human rights:
1) Corporate human rights responsibilities go beyond legal compliance.
Respecting human rights means not violating them, but also means addressing any “adverse human rights impacts” companies may cause or to which they contribute. Companies can have adverse human rights impact in situations where no clear legal exposure exists and companies must respect human rights even when governments do not.
2) Consider the full range of human rights and all of your company’s activities and relationships.
A company’s activities and relationships determine the appropriate scope of corporate human rights efforts. International standards – international human rights and labor conventions – provide the list of relevant human rights. A chocolate brand sourcing cocoa from West Africa is expected to consider forced labor on cocoa farms. Internet and telecom providers must pay attention to freedom of expression and the right to privacy. Companies must consider the human rights issues in the places where they operate, as well as the rights affected by different business functions.
3) Adopt a human rights policy.
Start by referencing international human rights standards. The form is less important than a clear corporate commitment to respect human rights. The strongest efforts will align all relevant corporate policies, including compensation, procurement and lobbying practices.
4) Invest in human rights due diligence.
Assessing your company’s human rights impacts is the core concept in the “Respect” pillar of the Framework. If you haven’t considered how your company touches human rights, this is the year to start. Assess actual and potential human rights impacts in your company’s own operations; and the risk of complicity in relationships with business partners, suppliers, and others, prioritizing areas of heightened risk. Human rights due diligence is a dynamic, ongoing activity. Human rights impact assessments will become increasingly common.
5) Act on the findings.
Companies need specific procedures to prevent or mitigate potential human rights impacts and to remediate actual harm. Corporate philanthropy, for example, is not a substitute for meeting human rights responsibilities. Grievance mechanisms are part of the puzzle, but companies will also need to develop more robust forms of human rights impact management consistent with the UN Framework.
6) Track and communicate your human rights performance.
Ruggie stops short of calling for mandatory reporting, but emphasizes the need for human rights performance tracking. Credible due diligence demonstrates the steps you have taken to understand and prevent human rights impacts. Initiatives like the Global Reporting Initiative (GRI) offer performance indicators that can get you started, but each company will need to customize its own human rights metrics.
7) Ensure that corporate human rights initiatives contain effective grievance mechanisms.
The third pillar focuses on providing human rights victims with access to effective remedies. Companies can establish operational-level grievance mechanisms, such as a confidential hotline or other way for individuals to report human rights issues.
.8) The UN Framework is now the de facto human rights standard for companies and their stakeholders.
“Protect, Respect and Remedy” gives everyone a common language for addressing human rights and business, and is already having an impact. Governments will reference the Framework in efforts to regulate corporate conduct. Advocates will use the Framework to demand government and corporate accountability. Voluntary corporate, industry and multi-stakeholder human rights programs will align themselves with the Framework by revising codes of conduct, strengthening human rights due diligence, and establishing grievance mechanisms.
9) Stakeholders will use the UN Framework to hold your company accountable for respecting human rights.
The UN Framework will shape the ways investors evaluate your company and how advocates engage with your company. Investors recently used the Framework in a successful campaign urging a Toyota affiliate to divest a joint venture with the Burmese military. Human rights NGOs will shine a light on corporate human rights due diligence, or lack thereof.
10) Pay attention to how governments and companies connect the “Protect” and “Respect” pillars of the UN Framework.
Executives may be tempted to focus exclusively on the “Respect” pillar of the Framework, because it describes the responsibilities of companies. The connections among the pillars, however, are where the most challenging issues arise, and where there are likely to be significant developments going forward.
Two developments bear watching: 1) how governments foster corporate respect for human rights; and 2) how companies encourage governments to protect human rights. States may establish legal liability for legal persons (corporations) and take steps to regulate firms operating abroad. Specific measures on the horizon are human rights reporting requirements, and mandatory human rights impact assessments. Financial reporting requirements may be the first place where required human rights reporting appears, by redefining materiality to include human rights impacts. In the other direction, companies increasingly are raising human rights concerns with the governments of countries where they operate.
Executives who can translate “Protect, Respect and Remedy” for their company in 2011, will have a competitive advantage as human rights go mainstream for business.