Does your business need a human rights strategy?

May 20th, 2022 Posted by News 0 thoughts on “Does your business need a human rights strategy?”
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Companies must be prepared to meet their moral and business obligations when operations bump up against labour abuses or worse. That’s why it’s critical for companies to have a human rights strategy and proactively consider when and how to take the action needed to fulfill their moral obligations; meet shareholder, customer, and employee expectations; and keep other stakeholders satisfied. Authors of new research looked at business ethics and sustainability, including discussions with managers and human rights groups, and how businesses have addressed these issues in the past. They created a framework to help companies develop a business and human rights strategy that is applicable to their situations. The framework offers tools to help companies gauge their vulnerabilities, and identify approaches and tactics that will assist them in meeting their social and commercial responsibilities.

Three categories of human rights violations

In their research, the authors observed three broad areas where human rights issues ariseand that companies must consider when developing a strategy.

Abuse in the way a company’s products or services are made and delivered. 

This includes abuse by suppliers or contractors or within a company’s own operations. Managing human rights risks in the supply chain is becoming increasingly complicated as geopolitical environments change, supply chains become more complex, and human rights defenders leverage digital media to highlight abuses occurring right under our noses in areas that were previously unseen. Sometimes a job such as picking tomatoes, making clothes, or working on a construction site, may appear to be normal.

What might not be seen is the way people are being controlled through intimidation, inescapable debt, the removal of passports, or threats of deportation. A 2019 investigation in the U.K. revealed a slave ring involving more than 400 trafficked Polish workers who were being held in appalling conditions. The labourers were receiving a pittance to work on farms and in factories that supplied major supermarket and building supply chains, including Tesco, Waitrose, Sainsbury’s, Homebase, Travis Perkins, Argos, and Wickes. Unsurprisingly, the companies were unaware of the conditions their suppliers’ workers were subjected to. 

In fact, most companies today are vocal in announcing policies to weed out forced labour in their value chains. However, the prevalence of modern slavery in global supply chains has become so entrenched that sadly most multinational companies benefit from it somewhere, often very far down the chain, where they have little visibility or leverage.

Abuse in the way a company’s products or services are used. 

While companies may not knowingly create products that violate human rights, they could find themselves complicit when customers employ their products or services to do so.

Even if not legally complicit, then they are at least guilty in the court of public opinion. Caterpillar, a long-standing supplier of heavy machinery to the Israeli army, found its reputation at risk when evidence emerged of its equipment being used to demolish Palestinian houses and orchards.

Abuse by regimes where the company operates. 

It is difficult to identify a country where human rights abuses of one kind or another do not take place, whether in the form of forced labour, suppression of free speech, racial / cultural / gender discrimination or unlawful incarceration. The issue is nuanced, and countries differ in their views on what constitutes basic human rights. Companies can benefit from working closely with governments, but when a regime violates human rights, they can get embroiled in scandal. 

Three key decisions for your human rights strategy

The insights gleaned while assessing a company’s exposure to human rights issues can also be used during the development and execution of a response. To help business leaders work through this, we’ve created a decision tree that highlights the key choices that could be made and their potential consequences.

DECISION 1: Exit, Speak up or Stay silent

The first decision a company must make is whether to get involved. Based on the conclusions reached using the exposure matrix, business leaders must decide whether the issue requires further attention and possibly action. 

Is it serious enough to warrant divesting operations and/or possibly leaving the country? If not, what other options are available? Deciding on the best option is not always straightforward, nor is flight always the most appropriate action: pulling out of a country can not only seriously impact a business’s bottom line but also harm the communities in which it operates, such as by eliminating local jobs or ending prosocial initiatives the company has taken. 

If a business makes the choice to continue operating and to work to address systemic human rights abuses within its environment, it needs to develop a nuanced strategy and be very deliberate about how and with whom it interacts.

DECISION 2: A Collective or Individual Approach? 

If a company chooses to stay and take action, it must decide whether the issue is best addressed by the company individually or should be undertaken collectively with other organisations or stakeholders. An individual approach can be most effective when companies are influential and when time is of the essence. 

DECISION 3: Which Actions and Tactics Should Be Chosen? 

Having decided on a collective or individual approach, companies are faced with the question of whether to take direct action to stop human rights violations or whether more can be done by indirectly influencing the institutional settings in which they operate.

Adapted from an article by N. Craig Smith, Markus Scholz, Jane Williams 

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