Human Rights
Companies have a responsibility to respect human rights. The baseline responsibility is not to infringe on the rights of others and address any adverse impacts that occur. The Guiding Principles on Business and Human Rights (the Guiding Principles), endorsed by the UN Human Rights Council in June 2011, provide a globally authoritative standard for how companies can meet this responsibility. The Guiding Principles state that companies should have in place policies and processes appropriate to their size and circumstances, including a process of continuous human rights due diligence, to “know and show” that they respect human rights. The Guiding Principles provide conceptual clarity and content to the corporate responsibility to respect human rights described in Principle 1 and 2 of the UN Global Compact. In other words, the corporate responsibility to respect human rights in Principle 1 of the UN Global Compact is the same one described in the
Guiding Principles. It should also be noted that the Guiding Principles include labour rights in the sphere of human rights for workers. Therefore, the responsibility to respect human rights also applies to Principles 1 to 6 of the UN Global Compact.
Additionally, business can go beyond addressing harm to human rights by taking steps to support and promote the realisation of human rights through core business activities, strategic social investment, philanthropy, public policy engagement, advocacy partnerships as well as collective actions, and there are good business reasons to do so. They should also establish operational-level grievance mechanisms as a key support tool to provide access to remedy for the rights-holders.
- Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
- Principle 2: make sure that they are not complicit in human rights abuses.
Labour
Labour conditions in offices, in factories, on farms and at natural resource extraction sites such as mines often fall significantly below international standards and national regulatory requirements and can lead to serious human rights abuses. In these contexts, businesses should respect international labour standards within their supply chains, including by ensuring that suppliers respect the rights of freedom of association and the right to collective bargaining, abolishing forced and child labour and eliminating discrimination.
In addition, workers in many countries may be vulnerable to other human rights abuses, including unsafe or hazardous work, excessive work hours, unpaid wages, degrading treatment by employers and inhibited movement. In order to avoid complicity in abuses, businesses should seek to ensure that they do not cause or contribute to the infringement on the rights of workers and that such infringements are not directly linked to their operations, products or services through their business relationships, including with respect to the right to freedom of movement, freedom from inhumane treatment, the right to equal pay for equal work and the right to rest and leisure. The rights of all peoples to work in safe and healthy working conditions and to have access to social protection measures are critically important as well.
- Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
- Principle 4: the elimination of all forms of forced and compulsory labour;
- Principle 5: the effective abolition of child labour; and
- Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment
Environmental impacts from supply chains are often severe, particularly where environmental regulations are lax, price pressures are significant and natural resources are (or are perceived to be) abundant. These impacts can include toxic waste, water pollution, loss of biodiversity, deforestation, long term damage to ecosystems, water scarcity, hazardous air emissions as well as high greenhouse gas emissions and energy use. Companies should engage with suppliers to address environmental impacts, by applying the precautionary approach, promoting greater environmental responsibility and the usage of clean technologies.
- Principle 7: Businesses should support a precautionary approach to environmental challenges;
- Principle 8: undertake initiatives to promote greater environmental responsibility; and
- Principle 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption
The significant corruption risks in the supply chain include procurement fraud and third parties who engage in corrupt practices involving governments. The direct costs of this corruption are considerable, including product quality, but often are dwarfed by indirect costs related to management time and resources dealing with issues such as legal liability and damage to a company’s reputation. Companies that engage their supply chains through meaningful anti-corruption programmes can improve product quality, reduce fraud and related costs, enhance their reputations for honest business, improve the environment for business and create a more sustainable platform for future growth.
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
Corporate clients who would like to discuss this topic further should contact:
Varun Sarda, Head of ESG Advisory