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PILLAR 2: CORPORATE RESPONSIBILITY TO RESPECT HUMAN RIGHTS

Foundational Principles

11. Business enterprises should respect human rights. This means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved.

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Commentary

The responsibility to respect human rights is a global standard of expected conduct for all business enterprises wherever they operate. It exists independently of States’ abilities and/or willingness to fulfil their own human rights obligations, and does not diminish those obligations. And it exists over and above compliance with national laws and regulations protecting human rights.

Addressing adverse human rights impacts requires taking adequate measures for their prevention, mitigation and, where appropriate, remediation. Business enterprises may undertake other commitments or activities to support and promote human rights, which may contribute to the enjoyment of rights. But this does not offset a failure to respect human rights throughout their operations.

Business enterprises should not undermine States’ abilities to meet their own human rights obligations, including by actions that might weaken the integrity of judicial processes.

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12. The responsibility of business enterprises to respect human rights refers to internationally recognized human rights – understood, at a minimum, as those expressed in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work.

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Commentary

Because business enterprises can have an impact on virtually the entire spectrum of internationally recognized human rights, their responsibility to respect applies to all such rights. In practice, some human rights may be at greater risk than others in particular industries or contexts, and therefore will be the focus of heightened attention. However, situations may change, so all human rights should be the subject of periodic review.

An authoritative list of the core internationally recognized human rights is contained in the International Bill of Human Rights (consisting of the Universal Declaration of Human Rights and the main instruments through which it has been codified: the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights), coupled with the principles concerning fundamental rights in the eight ILO core conventions as set out in the Declaration on Fundamental Principles and Rights at Work. These are the benchmarks against which other social actors assess the human rights impacts of business enterprises. The responsibility of business enterprises to respect human rights is distinct from issues of legal liability and enforcement, which remain defined largely by national law provisions in relevant jurisdictions.

Depending on circumstances, business enterprises may need to consider additional standards. For instance, enterprises should respect the human rights of individuals belonging to specific groups or populations that require particular attention, where they may have adverse human rights impacts on them. In this connection, United Nations instruments have elaborated further on the rights of indigenous peoples; women; national or ethnic, religious and linguistic minorities; children; persons with disabilities; and migrant workers and their families. Moreover, in situations of armed conflict enterprises should respect the standards of international humanitarian law.

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13. The responsibility to respect human rights requires that business enterprises:

(a) Avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur;

(b) Seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.

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Commentary

Business enterprises may be involved with adverse human rights impacts either through their own activities or as a result of their business relationships with other parties. Guiding Principle 19 elaborates further on the implications for how business enterprises should address these situations. For the purpose of these Guiding Principles a business enterprise’s “activities” are understood to include both actions and omissions; and its “business relationships” are understood to include relationships with business partners, entities in its value chain, and any other non-State or State entity directly linked to its business operations, products or services.

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14. The responsibility of business enterprises to respect human rights applies to all enterprises regardless of their size, sector, operational context, ownership and structure. Nevertheless, the scale and complexity of the means through which enterprises meet that responsibility may vary according to these factors and with the severity of the enterprise’s adverse human rights impacts.

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Commentary

The means through which a business enterprise meets its responsibility to respect human rights will be proportional to, among other factors, its size. Small and medium-sized enterprises may have less capacity as well as more informal processes and management structures than larger companies, so their respective policies and processes will take on different forms. But some small and medium-sized enterprises can have severe human rights impacts, which will require corresponding measures regardless of their size. Severity of impacts will be judged by their scale, scope and irremediable character.

The means through which a business enterprise meets its responsibility to respect human rights may also vary depending on whether, and the extent to which, it conducts business through a corporate group or individually.

However, the responsibility to respect human rights applies fully and equally to all business enterprises.

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15. In order to meet their responsibility to respect human rights, business enterprises should have in place policies and processes appropriate to their size and circumstances, including:

(a) A policy commitment to meet their responsibility to respect human rights;

(b) A human rights due diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights;

(c) Processes to enable the remediation of any adverse human rights impacts they cause or to which they contribute.

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Commentary

Business enterprises need to know and show that they respect human rights. They cannot do so unless they have certain policies and processes in place. Principles 16 to 24 elaborate further on these.

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Operational Principles

POLICY COMMITMENT

16. As the basis for embedding their responsibility to respect human rights, business enterprises should express their commitment to meet this responsibility through a statement of policy that:

(a) Is approved at the most senior level of the business enterprise;

(b) Is informed by relevant internal and/or external expertise;

(c) Stipulates the enterprise’s human rights expectations of personnel, business partners and other parties directly linked to its operations, products or services;

(d) Is publicly available and communicated internally and externally to all personnel, business partners and other relevant parties;

(e) Is reflected in operational policies and procedures necessary to embed it throughout the business enterprise.

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Commentary

The term “statement” is used generically, to describe whatever means an enterprise employs to set out publicly its responsibilities, commitments, and expectations.

The level of expertise required to ensure that the policy statement is adequately informed will vary according to the complexity of the business enterprise’s operations. Expertise can be drawn from various sources, ranging from credible online or written resources to consultation with recognized experts.

The statement of commitment should be publicly available. It should be communicated actively to entities with which the enterprise has contractual relationships; others directly linked to its operations, which may include State security forces; investors; and, in the case of operations with significant human rights risks, to the potentially affected stakeholders.

Internal communication of the statement and of related policies and procedures should make clear what the lines and systems of accountability will be, and should be supported by any necessary training for personnel in relevant business functions.

Just as States should work towards policy coherence, so business enterprises need to strive for coherence between their responsibility to respect human rights and policies and procedures that govern their wider business activities and relationships. This should include, for example, policies and procedures that set financial and other performance incentives for personnel; procurement practices; and lobbying activities where human rights are at stake.

Through these and any other appropriate means, the policy statement should be embedded from the top of the business enterprise through all its functions, which otherwise may act without awareness or regard for human rights.

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Human Rights Due Diligence

17. In order to identify, prevent, mitigate and account for how they address their adverse human rights impacts, business enterprises should carry out human rights due diligence. The process should include assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed. Human rights due diligence:

(a) Should cover adverse human rights impacts that the business enterprise may cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships;

(b) Will vary in complexity with the size of the business enterprise, the risk of severe human rights impacts, and the nature and context of its operations;

(c) Should be ongoing, recognizing that the human rights risks may change over time as the business enterprise’s operations and operating context evolve.

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Commentary

This Principle defines the parameters for human rights due diligence, while Principles 18 through 21 elaborate its essential components. Human rights risks are understood to be the business enterprise’s potential adverse human rights impacts. Potential impacts should be addressed through prevention or mitigation, while actual impacts – those that have already occurred – should be a subject for remediation (Principle 22).

Human rights due diligence can be included within broader enterprise risk management systems, provided that it goes beyond simply identifying and managing material risks to the company itself, to include risks to rights-holders. Human rights due diligence should be initiated as early as possible in the development of a new activity or relationship, given that human rights risks can be increased or mitigated already at the stage of structuring contracts or other agreements, and may be inherited through mergers or acquisitions.

Where business enterprises have large numbers of entities in their value chains it may be unreasonably difficult to conduct due diligence for adverse human rights impacts across them all. If so, business enterprises should identify general areas where the risk of adverse human rights impacts is most significant, whether due to certain suppliers’ or clients’ operating context, the particular operations, products or services involved, or other relevant considerations, and prioritize these for human rights due diligence. Questions of complicity may arise when a business enterprise contributes to, or is seen as contributing to, adverse human rights impacts caused by other parties. Complicity has both non-legal and legal meanings. As a nonlegal matter, business enterprises may be perceived as being “complicit” in the acts of another party where, for example, they are seen to benefit from an abuse committed by that party.

As a legal matter, most national jurisdictions prohibit complicity in the commission of a crime, and a number allow for criminal liability of business enterprises in such cases. Typically, civil actions can also be based on an enterprise’s alleged contribution to a harm, although these may not be framed in human rights terms. The weight of international criminal law jurisprudence indicates that the relevant standard for aiding and abetting is knowingly providing practical assistance or encouragement that has a substantial effect on the commission of a crime.

Conducting appropriate human rights due diligence should help business enterprises address the risk of legal claims against them by showing that they took every reasonable step to avoid involvement with an alleged human rights abuse. However, business enterprises conducting such due diligence should not assume that, by itself, this will automatically and fully absolve them from liability for causing or contributing to human rights abuses.

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18. In order to gauge human rights risks, business enterprises should identify and assess any actual or potential adverse human rights impacts with which they may be involved either through their own activities or as a result of their business relationships. This process should:

(a) Draw on internal and/or independent external human rights expertise;

(b) Involve meaningful consultation with potentially affected groups and other relevant stakeholders, as appropriate to the size of the business enterprise and the nature and context of the operation.

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Commentary

The initial step in conducting human rights due diligence is to identify and assess the nature of the actual and potential adverse human rights impacts with which a business enterprise may be involved. The purpose is to understand the specific impacts on specific people, given a specific context of operations. Typically this includes assessing the human rights context prior to a proposed business activity, where possible; identifying who may be affected; cataloguing the relevant human rights standards and issues; and projecting how the proposed activity and associated business relationships could have adverse human rights impacts on those identified.

In this process, business enterprises should pay special attention to any particular human rights impacts on individuals from groups or populations that may be at heightened risk of vulnerability or marginalization, and bear in mind the different risks that may be faced by women and men. While processes for assessing human rights impacts can be incorporated within other processes such as risk assessments or environmental and social impact assessments, they should include all internationally recognized human rights as a reference point, since enterprises may potentially impact virtually any of these rights.

Because human rights situations are dynamic, assessments of human rights impacts should be undertaken at regular intervals: prior to a new activity or relationship; prior to major decisions or changes in the operation (e.g. market entry, product launch, policy change, or wider changes to the business); in response to or anticipation of changes in the operating environment (e.g. rising social tensions); and periodically throughout the life of an activity or relationship.

To enable business enterprises to assess their human rights impacts accurately, they should seek to understand the concerns of potentially affected stakeholders by consulting them directly in a manner that takes into account language and other potential barriers to effective engagement. In situations where such consultation is not possible, business enterprises should consider reasonable alternatives such as consulting credible, independent expert resources, including human rights defenders and others from civil society. The assessment of human rights impacts informs subsequent steps in the human rights due diligence process.

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19. In order to prevent and mitigate adverse human rights impacts, business enterprises should integrate the findings from their impact assessments across relevant internal functions and processes, and take appropriate action.

a) Effective integration requires that:

i) Responsibility for addressing such impacts is assigned to the appropriate level and function within the business enterprise;

ii) Internal decision-making, budget allocations and oversight processes enable effective responses to such impacts.

b) Appropriate action will vary according to:

i) Whether the business enterprise causes or contributes to an adverse impact, or whether it is involved solely because the impact is directly linked to its operations, products or services by a business relationship;

ii) The extent of its leverage in addressing the adverse impact.

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Commentary

The horizontal integration across the business enterprise of specific findings from assessing human rights impacts can only be effective if its human rights policy commitment has been embedded into all relevant business functions.  This is required to ensure that the assessment findings are properly understood, given due weight, and acted upon.

In assessing human rights impacts, business enterprises will have looked for both actual and potential adverse impacts. Potential impacts should be prevented or mitigated through the horizontal integration of findings across the business enterprise, while actual impacts—those that have already occurred – should be a subject for remediation (Principle 22).

Where a business enterprise causes or may cause an adverse human rights impact, it should take the necessary steps to cease or prevent the impact.

Where a business enterprise contributes or may contribute to an adverse human rights impact, it should take the necessary steps to cease or prevent its contribution and use its leverage to mitigate any remaining impact to the greatest extent possible. Leverage is considered to exist where the enterprise has the ability to effect change in the wrongful practices of an entity that causes a harm.

Where a business enterprise has not contributed to an adverse human rights impact, but that impact is nevertheless directly linked to its operations, products or services by its business relationship with another entity, the situation is more complex. Among the factors that will enter into the determination of the appropriate action in such situations are the enterprise’s leverage over the entity concerned, how crucial the relationship is to the enterprise, the severity of the abuse, and whether terminating the relationship with the entity itself would have adverse human rights consequences.

The more complex the situation and its implications for human rights, the stronger is the case for the enterprise to draw on independent expert advice in deciding how to respond.

If the business enterprise has leverage to prevent or mitigate the adverse impact, it should exercise it. And if it lacks leverage there may be ways for the enterprise to increase it. Leverage may be increased by, for example, offering capacity-building or other incentives to the related entity, or collaborating with other actors.

There are situations in which the enterprise lacks the leverage to prevent or mitigate adverse impacts and is unable to increase its leverage. Here, the enterprise should consider ending the relationship, taking into account credible assessments of potential adverse human rights impacts of doing so.

Where the relationship is “crucial” to the enterprise, ending it raises further challenges. A relationship could be deemed as crucial if it provides a product or service that is essential to the enterprise’s business, and for which no reasonable alternative source exists. Here the severity of the adverse human rights impact must also be considered: the more severe the abuse, the more quickly the enterprise will need to see change before it takes a decision on whether it should end the relationship. In any case, for as long as the abuse continues and the enterprise remains in the relationship, it should be able to demonstrate its own ongoing efforts to mitigate the impact and be prepared to accept any consequences – reputational, financial or legal – of the continuing connection.

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20. In order to verify whether adverse human rights impacts are being addressed, business enterprises should track the effectiveness of their response. Tracking should:

(a) Be based on appropriate qualitative and quantitative indicators;

(b) Draw on feedback from both internal and external sources, including affected stakeholders.

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Commentary

Tracking is necessary in order for a business enterprise to know if its human rights policies are being implemented optimally, whether it has responded effectively to the identified human rights impacts, and to drive continuous improvement.

Business enterprises should make particular efforts to track the effectiveness of their responses to impacts on individuals from groups or populations that may be at heightened risk of vulnerability or marginalization.

Tracking should be integrated into relevant internal reporting processes. Business enterprises might employ tools they already use in relation to other issues. This could include performance contracts and reviews as well as surveys and audits, using gender-disaggregated data where relevant. Operational-level grievance mechanisms can also provide important feedback on the effectiveness of the business enterprise’s human rights due diligence from those directly affected (see Principle 29).

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21. In order to account for how they address their human rights impacts, business enterprises should be prepared to communicate this externally, particularly when concerns are raised by or on behalf of affected stakeholders. Business enterprises whose operations or operating contexts pose risks of severe human rights impacts should report formally on how they address them. In all instances, communications should:

(a) Be of a form and frequency that reflect an enterprise’s human rights impacts and that are accessible to its intended audiences;

(b) Provide information that is sufficient to evaluate the adequacy of an enterprise’s response to the particular human rights impact involved;

(c) In turn not pose risks to affected stakeholders, personnel or to legitimate requirements of commercial confidentiality.

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Commentary

The responsibility to respect human rights requires that business enterprises have in place policies and processes through which they can both know and show that they respect human rights in practice. Showing involves communication, providing a measure of transparency and accountability to individuals or groups who may be impacted and to other relevant stakeholders, including investors.

Communication can take a variety of forms, including in-person meetings, online dialogues, consultation with affected stakeholders, and formal public reports. Formal reporting is itself evolving, from traditional annual reports and corporate responsibility/sustainability reports, to include online updates and integrated financial and non-financial reports.

Formal reporting by enterprises is expected where risks of severe human rights impacts exist, whether this is due to the nature of the business operations or operating contexts. The reporting should cover topics and indicators concerning how enterprises identify and address adverse impacts on human rights. Independent verification of human rights reporting can strengthen its content and credibility. Sector-specific indicators can provide helpful additional detail.

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REMEDIATION

22. Where business enterprises identify that they have caused or contributed to adverse impacts, they should provide for or cooperate in their remediation through legitimate processes.

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Commentary

Even with the best policies and practices, a business enterprise may cause or contribute to an adverse human rights impact that it has not foreseen or been able to prevent. Where a business enterprise identifies such a situation, whether through its human rights due diligence process or other means, its responsibility to respect human rights requires active engagement in remediation, by itself or in cooperation with other actors. Operational-level grievance mechanisms for those potentially impacted by the business enterprise’s activities can be one effective means of enabling remediation when they meet certain core criteria, as set out in Principle 31.

Where adverse impacts have occurred that the business enterprise has not caused or contributed to, but which are directly linked to its operations, products or services by a business relationship, the responsibility to respect human rights does not require that the enterprise itself provide for remediation, though it may take a role in doing so.

Some situations, in particular where crimes are alleged, typically will require cooperation with judicial mechanisms. Further guidance on mechanisms through which remediation may be sought, including where allegations of adverse human rights impacts are contested, is included in chapter III on access to remedy.

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 Issues of context

23. In all contexts, business enterprises should:

(a) Comply with all applicable laws and respect internationally recognized human rights, wherever they operate;

(b) Seek ways to honour the principles of internationally recognized human rights when faced with conflicting requirements;

(c) Treat the risk of causing or contributing to gross human rights abuses as a legal compliance issue wherever they operate.

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Commentary

Although particular country and local contexts may affect the human rights risks of an enterprise’s activities and business relationships, all business enterprises have the same responsibility to respect human rights wherever they operate. Where the domestic context renders it impossible to meet this responsibility fully, business enterprises are expected to respect the principles of internationally recognized human rights to the greatest extent possible in the circumstances, and to be able to demonstrate their efforts in this regard.

Some operating environments, such as conflict-affected areas, may increase the risks of enterprises being complicit in gross human rights abuses committed by other actors (security forces, for example). Business enterprises should treat this risk as a legal compliance issue, given the expanding web of potential corporate legal liability arising from extraterritorial civil claims, and from the incorporation of the provisions of the Rome Statute of the International Criminal Court in jurisdictions that provide for corporate criminal responsibility. In addition, corporate directors, officers and employees may be subject to individual liability for acts that amount to gross human rights abuses.

In complex contexts such as these, business enterprises should ensure that they do not exacerbate the situation. In assessing how best to respond, they will often be well advised to draw on not only expertise and cross-functional consultation within the enterprise, but also to consult externally with credible, independent experts, including from Governments, civil society, national human rights institutions and relevant multi-stakeholder initiatives.

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24. Where it is necessary to prioritize actions to address actual and potential adverse human rights impacts, business enterprises should first seek to prevent and mitigate those that are most severe or where delayed response would make them irremediable.

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Commentary

While business enterprises should address all their adverse human rights impacts, it may not always be possible to address them simultaneously. In the absence of specific legal guidance, if prioritization is necessary business enterprises should begin with those human rights impacts that would be most severe, recognizing that a delayed response may affect remediability. Severity is not an absolute concept in this context, but is relative to the other human rights impacts the business enterprise has identified.

Watch the video below to learn more about salient human rights issues and how to identify them.

PILLAR 1: STATE DUTY TO PROTECT

Foundational Principles

1. States must protect against human rights abuse within their territory and/or jurisdiction by third parties, including business enterprises. This requires taking appropriate steps to prevent, investigate, punish and redress such abuse through effective policies, legislation, regulations and adjudication.

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Commentary

States’ international human rights law obligations require that they respect, protect and fulfil the human rights of individuals within their territory and/ or jurisdiction. This includes the duty to protect against human rights abuse by third parties, including business enterprises.

The State duty to protect is a standard of conduct. Therefore, States are not per se responsible for human rights abuse by private actors. However, States may breach their international human rights law obligations where such abuse can be attributed to them, or where they fail to take appropriate steps to prevent, investigate, punish and redress private actors’ abuse. While States generally have discretion in deciding upon these steps, they should consider the full range of permissible preventative and remedial measures, including policies, legislation, regulations and adjudication. States also have the duty to protect and promote the rule of law, including by taking measures to ensure equality before the law, fairness in its application, and by providing for adequate accountability, legal certainty, and procedural and legal transparency. This chapter focuses on preventative measures while chapter III outlines remedial measures.

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2. States should set out clearly the expectation that all business enterprises domiciled in their territory and/or jurisdiction respect human rights throughout their operations.

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Commentary

At present States are not generally required under international human rights law to regulate the extraterritorial activities of businesses domiciled in their territory and/or jurisdiction. Nor are they generally prohibited from doing so, provided there is a recognized jurisdictional basis. Within these parameters some human rights treaty bodies recommend that home States take steps to prevent abuse abroad by business enterprises within their jurisdiction.

There are strong policy reasons for home States to set out clearly the expectation that businesses respect human rights abroad, especially where the State itself is involved in or supports those businesses. The reasons include ensuring predictability for business enterprises by providing coherent and consistent messages, and preserving the State’s own reputation.

States have adopted a range of approaches in this regard. Some are domestic measures with extraterritorial implications. Examples include requirements on “parent” companies to report on the global operations of the entire enterprise; multilateral soft-law instruments such as the Guidelines for Multinational Enterprises of the Organisation for Economic Co-operation and Development; and performance standards required by institutions that support overseas investments. Other approaches amount to direct extraterritorial legislation and enforcement. This includes criminal regimes that allow for prosecutions based on the nationality of the perpetrator no matter where the offence occurs. Various factors may contribute to the perceived and actual reasonableness of States’ actions, for example whether they are grounded in multilateral agreement.

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Operational Principles

General State Regulatory and Policy Functions

3. In meeting their duty to protect, States should:

(a) Enforce laws that are aimed at, or have the effect of, requiring business enterprises to respect human rights, and periodically to assess the adequacy of such laws and address any gaps;

(b) Ensure that other laws and policies governing the creation and ongoing operation of business enterprises, such as corporate law, do not constrain but enable business respect for human rights;

(c) Provide effective guidance to business enterprises on how to respect human rights throughout their operations;

(d) Encourage, and where appropriate require, business enterprises to communicate how they address their human rights impacts.

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Commentary

States should not assume that businesses invariably prefer, or benefit from, State inaction, and they should consider a smart mix of measures – national and international, mandatory and voluntary – to foster business respect for human rights.

The failure to enforce existing laws that directly or indirectly regulate business respect for human rights is often a significant legal gap in State practice. Such laws might range from non-discrimination and labour laws to environmental, property, privacy and anti-bribery laws. Therefore, it is important for States to consider whether such laws are currently being enforced effectively, and if not, why this is the case and what measures may reasonably correct the situation.

It is equally important for States to review whether these laws provide the necessary coverage in light of evolving circumstances and whether, together with relevant policies, they provide an environment conducive to business respect for human rights. For example, greater clarity in some areas of law and policy, such as those governing access to land, including entitlements in relation to ownership or use of land, is often necessary to protect both rights-holders and business enterprises.

Laws and policies that govern the creation and ongoing operation of business enterprises, such as corporate and securities laws, directly shape business behaviour. Yet their implications for human rights remain poorly understood. For example, there is a lack of clarity in corporate and securities law regarding what companies and their officers are permitted, let alone required, to do regarding human rights. Laws and policies in this area should provide sufficient guidance to enable enterprises to respect human rights, with due regard to the role of existing governance structures such as corporate boards.

Guidance to business enterprises on respecting human rights should indicate expected outcomes and help share best practices. It should advise on appropriate methods, including human rights due diligence, and how to consider effectively issues of gender, vulnerability and/or marginalization, recognizing the specific challenges that may be faced by indigenous peoples, women, national or ethnic minorities, religious and linguistic minorities, children, persons with disabilities, and migrant workers and their families.

National human rights institutions that comply with the Paris Principles have an important role to play in helping States identify whether relevant laws are aligned with their human rights obligations and are being effectively enforced, and in providing guidance on human rights also to business enterprises and other non-State actors.

Communication by business enterprises on how they address their human rights impacts can range from informal engagement with affected stakeholders to formal public reporting. State encouragement of, or where appropriate requirements for, such communication are important in fostering respect for human rights by business enterprises. Incentives to communicate adequate information could include provisions to give weight to such self-reporting in the event of any judicial or administrative proceeding. A requirement to communicate can be particularly appropriate where the nature of business operations or operating contexts pose a significant risk to human rights. Policies or laws in this area can usefully clarify what and how businesses should communicate, helping to ensure both the accessibility and accuracy of communications.

Any stipulation of what would constitute adequate communication should take into account risks that it may pose to the safety and security of individuals and facilities; legitimate requirements of commercial confidentiality; and variations in companies’ size and structures.

Financial reporting requirements should clarify that human rights impacts in some instances may be “material” or “significant” to the economic performance of the business enterprise.

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THE STATE-BUSINESS NEXUS

4. States should take additional steps to protect against human rights abuses by business enterprises that are owned or controlled by the State, or that receive substantial support and services from State agencies such as export credit agencies and official investment insurance or guarantee agencies, including, where appropriate, by requiring human rights due diligence.

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Commentary

States individually are the primary duty-bearers under international human rights law, and collectively they are the trustees of the international human rights regime. Where a business enterprise is controlled by the State or where its acts can be attributed otherwise to the State, an abuse of human rights by the business enterprise may entail a violation of the State’s own international law obligations. Moreover, the closer a business enterprise is to the State, or the more it relies on statutory authority or taxpayer support, the stronger the State’s policy rationale becomes for ensuring that the enterprise respects human rights.

Where States own or control business enterprises, they have greatest means within their powers to ensure that relevant policies, legislation and regulations regarding respect for human rights are implemented. Senior management typically reports to State agencies, and associated government departments have greater scope for scrutiny and oversight, including ensuring that effective human rights due diligence is implemented. (These enterprises are also subject to the corporate responsibility to respect human rights, addressed in chapter II.)

A range of agencies linked formally or informally to the State may provide support and services to business activities. These include export credit agencies, official investment insurance or guarantee agencies, development agencies and development finance institutions. Where these agencies do not explicitly consider the actual and potential adverse impacts on human rights of beneficiary enterprises, they put themselves at risk – in reputational, financial, political and potentially legal terms – for supporting any such harm, and they may add to the human rights challenges faced by the recipient State.

Given these risks, States should encourage and, where appropriate, require human rights due diligence by the agencies themselves and by those business enterprises or projects receiving their support. A requirement for human rights due diligence is most likely to be appropriate where the nature of business operations or operating contexts pose significant risk to human rights.

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5. States should exercise adequate oversight in order to meet their international human rights obligations when they contract with, or legislate for, business enterprises to provide services that may impact upon the enjoyment of human rights.

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Commentary

States do not relinquish their international human rights law obligations when they privatize the delivery of services that may impact upon the enjoyment of human rights. Failure by States to ensure that business enterprises performing such services operate in a manner consistent with the State’s human rights obligations may entail both reputational and legal consequences for the State itself. As a necessary step, the relevant service contracts or enabling legislation should clarify the State’s expectations that these enterprises respect human rights. States should ensure that they can effectively oversee the enterprises’ activities, including through the provision of adequate independent monitoring and accountability mechanisms.

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6. States should promote respect for human rights by business enterprises with which they conduct commercial transactions.

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Commentary

States conduct a variety of commercial transactions with business enterprises, not least through their procurement activities. This provides States – individually and collectively – with unique opportunities to promote awareness of and respect for human rights by those enterprises, including through the terms of contracts, with due regard to States’ relevant obligations under national and international law.

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SUPPORTING BUSINESS RESPECT FOR HUMAN RIGHTS IN CONFLICT-AFFECTED AREAS

7. Because the risk of gross human rights abuses is heightened in conflict-affected areas, States should help ensure that business enterprises operating in those contexts are not involved with such abuses, including by:

(a) Engaging at the earliest stage possible with business enterprises to help them identify, prevent and mitigate the human rights-related risks of their activities and business relationships;

(b) Providing adequate assistance to business enterprises to assess and address the heightened risks of abuses, paying special attention to both gender-based and sexual violence;

(c) Denying access to public support and services for a business enterprise that is involved with gross human rights abuses and refuses to cooperate in addressing the situation;

(d) Ensuring that their current policies, legislation, regulations and enforcement measures are effective in addressing the risk of business involvement in gross human rights abuses.

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Commentary

Some of the worst human rights abuses involving business occur amid conflict over the control of territory, resources or a Government itself –where the human rights regime cannot be expected to function as intended. Responsible businesses increasingly seek guidance from States about how to avoid contributing to human rights harm in these difficult contexts. Innovative and practical approaches are needed. In particular, it is important to pay attention to the risk of sexual and gender-based violence, which is especially prevalent during times of conflict.

It is important for all States to address issues early before situations on the ground deteriorate. In conflict-affected areas, the “host” State may be unable to protect human rights adequately due to a lack of effective control. Where transnational corporations are involved, their “home” States therefore have roles to play in assisting both those corporations and host States to ensure that businesses are not involved with human rights abuse, while neighboring States can provide important additional support.

To achieve greater policy coherence and assist business enterprises adequately in such situations, home States should foster closer cooperation among their development assistance agencies, foreign and trade ministries, and export finance institutions in their capitals and within their embassies, as well as between these agencies and host Government actors; develop early-warning indicators to alert government agencies and business enterprises to problems; and attach appropriate consequences to any failure by enterprises to cooperate in these contexts, including by denying or withdrawing existing public support or services, or where that is not possible, denying their future provision.

States should warn business enterprises of the heightened risk of being involved with gross abuses of human rights in conflict-affected areas. They should review whether their policies, legislation, regulations and enforcement measures effectively address this heightened risk, including through provisions for human rights due diligence by business. Where they identify gaps, States should take appropriate steps to address them.

This may include exploring civil, administrative or criminal liability for enterprises domiciled or operating in their territory and/or jurisdiction that commit or contribute to gross human rights abuses. Moreover, States should consider multilateral approaches to prevent and address such acts, as well as support effective collective initiatives.

All these measures are in addition to States’ obligations under international humanitarian law in situations of armed conflict, and under international criminal law.

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ENSURING POLICY COHERENCE

8. States should ensure that governmental departments, agencies and other State-based institutions that shape business practices are aware of and observe the State’s human rights obligations when fulfilling their respective mandates, including by providing them with relevant information, training and support.

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Commentary

There is no inevitable tension between States’ human rights obligations and the laws and policies they put in place that shape business practices. However, at times, States have to make difficult balancing decisions to reconcile different societal needs. To achieve the appropriate balance, States need to take a broad approach to managing the business and human rights agenda, aimed at ensuring both vertical and horizontal domestic policy coherence.

Vertical policy coherence entails States having the necessary policies, laws and processes to implement their international human rights law obligations. Horizontal policy coherence means supporting and equipping departments and agencies, at both the national and subnational levels, that shape business practices – including those responsible for corporate law and securities regulation, investment, export credit and insurance, trade and labour – to be informed of and act in a manner compatible with the Governments’ human rights obligations.

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9. States should maintain adequate domestic policy space to meet their human rights obligations when pursuing business-related policy objectives with other States or business enterprises, for instance through investment treaties or contracts.

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Commentary

Economic agreements concluded by States, either with other States or with business enterprises – such as bilateral investment treaties, free trade agreements or contracts for investment projects – create economic opportunities for States. But they can also affect the domestic policy space of Governments. For example, the terms of international investment agreements may constrain States from fully implementing new human rights legislation, or put them at risk of binding international arbitration if they do so. Therefore, States should ensure that they retain adequate policy and regulatory ability to protect human rights under the terms of such agreements, while providing the necessary investor protection.

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10. States, when acting as members of multilateral institutions that deal with business-related issues, should:

(a) Seek to ensure that those institutions neither restrain the ability of their member States to meet their duty to protect nor hinder business enterprises from respecting human rights;

(b) Encourage those institutions, within their respective mandates and capacities, to promote business respect for human rights and, where requested, to help States meet their duty to protect against human rights abuse by business enterprises, including through technical assistance, capacity-building and awareness-raising;

(c) Draw on these Guiding Principles to promote shared understanding and advance international cooperation in the management of business and human rights challenges.

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Commentary

Greater policy coherence is also needed at the international level, including where States participate in multilateral institutions that deal with business related issues, such as international trade and financial institutions. States retain their international human rights law obligations when they participate in such institutions.

Capacity-building and awareness-raising through such institutions can play a vital role in helping all States to fulfil their duty to protect, including by enabling the sharing of information about challenges and best practices, thus promoting more consistent approaches.

Collective action through multilateral institutions can help States level the playing field with regard to business respect for human rights, but it should do so by raising the performance of laggards. Cooperation between States, multilateral institutions and other stakeholders can also play an important role.

These Guiding Principles provide a common reference point in this regard, and could serve as a useful basis for building a cumulative positive effect that takes into account the respective roles and responsibilities of all relevant stakeholders.

ABOUT THIS INTERACTIVE VERSION

This is an interactive version of the UN Guiding Principles on Business and Human Rights, prepared by Shift to offer a format that you can read and use online. Use the numbers above to navigate between the introduction and each of the three pillars. You can also download the PDF by using the button on the header of this page and share this resource on social media. In addition, you’ll see some of our resources and tools referenced throughout, to help you explore how the principles can be put into practice. If this is your first time engaging with the UNGPs, you may also want to visit our UNGPs 101 page, an introductory resource. Happy reading!

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The Special Representative annexed the Guiding Principles to his final report to the Human Rights Council (A/HRC/17/31), which also includes an introduction to the Guiding Principles and an overview of the process that led to their development.

The Human Rights Council endorsed the Guiding Principles in its resolution 17/4 of 16 June 2011.
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General principles

These Guiding Principles are grounded in recognition of:

• States’ existing obligations to respect, protect and fulfil human rights and fundamental freedoms;
  
• The role of business enterprises as specialized organs of society performing specialized functions, required to comply with all applicable laws and to respect human rights;
  
• The need for rights and obligations to be matched to appropriate and effective remedies when breached.

These Guiding Principles apply to all States and to all business enterprises, both transnational and others, regardless of their size, sector, location, ownership and structure.

These Guiding Principles should be understood as a coherent whole and should be read, individually and collectively, in terms of their objective of enhancing standards and practices with regard to business and human rights so as to achieve tangible results for affected individuals and communities, and thereby also contributing to a socially sustainable globalization.

Nothing in these Guiding Principles should be read as creating new international law obligations, or as limiting or undermining any legal obligations a State may have undertaken or be subject to under international law with regard to human rights.

These Guiding Principles should be implemented in a non-discriminatory manner, with particular attention to the rights and needs of, as well as the challenges faced by, individuals from groups or populations that may be at heightened risk of becoming vulnerable or marginalized, and with due regard to the different risks that may be faced by women and men.

Land Rights

Land is life. Regardless of geographical location and socioeconomic status, each person relies on land, at least to some degree, for the provision of basic human needs such as clean water to drink, nutritious food to eat, and safe housing to shelter in.

In many cases, the planet’s most vulnerable populations also directly rely on land in farming, hunting, gathering and carrying out other tasks for daily subsistence and in maintaining their and their families’ livelihoods and cultural identities.

Almost 75% of the world’s poor are affected directly by land degradation.

Business activities can have a wide range of impacts on people in relation to land. According to the UN High Commissioner for Human Rights, “[a]n increasing number of people are forcibly evicted or displaced from their land to make way for large-scale development or business projects, such as dams, mines, oil and gas installations or ports.” What’s more, “[i]n many countries the shift to large-scale farming has also led to forced evictions, displacements and local food insecurity, which in turn has contributed to an increase in rural to urban migration and consequently further pressure on access to urban land and housing.”

Land quality is closely linked to a healthy environment and sustainable access to natural resources. As such, land degradation connected to private sector activities can have significantly negative and widespread effects on people, for instance due to higher levels of water and air pollution or lack of access to firewood and other essential energy sources.

Access to, use of and control over land directly affect people’s enjoyment of their human rights. For example, “[f]or many people, land is a source of livelihood, and is central to economic rights. Land is also often linked to peoples’ identities, and so is tied to social and cultural rights.” Moreover, “the human rights aspects of land affect a range of issues including poverty reduction and development, peacebuilding, humanitarian assistance, disaster prevention and recovery, urban and rural planning, to name but a few. Emerging global issues, such as food insecurity, climate change and rapid urbanization, have also refocused attention on how land is being used, controlled and managed by States and private actors.”

Approximately 1.6 billion people depend on forests for their livelihoods, including around 70 million indigenous people.

Under the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), land-related human rights issues are of particular concern in the context of business impacts on indigenous populations. For instance, UNDRIP and other frameworks such as the International Finance Corporation (IFC) Performance Standards require the free, prior and informed consent (FPIC) of indigenous peoples for business activities that pose actual or potential impacts on their land and associated human rights.

As illustrated above, and depending on the specifics of the relevant corporate initiative, addressing land rights in the context of business activities may contribute to the achievement of an array of the Global Goals, including:

• Goal 1: End poverty in all its forms everywhere[i]
• Goal 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture[ii]
• Goal 3: Ensure healthy lives and promote well-being for all at all ages[iii]
• Goal 5: Achieve gender equality and empower all women and girls[iv]
• Goal 6: Ensure availability and sustainable management of water and sanitation for all[v]
• Goal 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all[vi]
• Goal 10: Reduce inequality within and among countries[vii]
• Goal 11: Make cities and human settlements inclusive, safe, resilient and sustainable[viii]
• Goal 12: Ensure sustainable consumption and production patterns[ix]
• Goal 13: Take urgent action to combat climate change and its impacts[x]
• Goal 14: Conserve and sustainably use the oceans, seas and marine resources for sustainable development[xi]
• Goal 15: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss[xii]
• Goal 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels[xiii]

So, how are companies currently supporting a world in which these goals can become a reality – a world in which land-related human rights are respected across all areas of business activity?

Examples illustrated by the case studies below include:

• Mining companies operating in the same region are engaging in similar initiatives around stakeholder engagement: Three diamond mines in the Northwest Territories of Canada are linked to independent monitoring agencies set up to protect the environmental and land rights of affected Aboriginal groups at all stages of the mines’ life cycles.
• A large buyer of a high-risk commodity is partnering with an international civil society organization: A global food and beverage brand is participating in a new model for socially and environmentally sustainable palm oil production that focuses on participatory and inclusive land-use planning and development.
• An oil and gas company is working with trained community members to support early-stage dialogue with indigenous populations: An extractives exploration project in Bolivia is working with community liaison officers to implement proactive engagement strategies with local indigenous populations based on past experiences and key lessons learned.

These case studies explore each of these innovative and evolving models in more detail. Each case study captures publicly available information on the initiative, alongside experiences and opinions from various actors involved.

The summaries do not claim to give a definitive account of a specific initiative or of all perspectives on that case study; instead, they are intended to serve as illustrative examples of how action toward corporate respect for human rights can make a critical contribution to the achievement of various goals and targets under the SDGs.

Key Takeaways on Land Rights

Individual Company Action

Individual Company Action

1. Legally binding agreements between the company, affected rights-holders, and relevant government authorities can provide clear parameters, valuable oversight mechanisms and robust accountability structures that aid in ensuring respect for land-related human rights.
2. A willingness to participate in new multi-stakeholder models can complement existing initiatives, address important gaps in current implementation efforts and place a company at the forefront of innovative efforts.
3. Working hand-in-hand with community representatives in formalized ways can bridge cultural and other contextual gaps when it comes to local engagement and relationship building around sensitive issues such as land rights.
4. Affected stakeholders may require support in order to effectively and meaningfully engage in consultation processes that are required or otherwise necessary to address land-related risks and impacts. Depending on context, such support might be in the form of financial resources, formal employment or expert guidance, and it may come from business where there is openness from stakeholders.
5. Prioritizing meaningful stakeholder engagement early and often can assist a company in avoiding any escalation of land-related conflicts or other challenges throughout the lifespan of a project. This may include early land tenure diagnoses to enhance the company’s understanding of land rights in the project area before entering into easements or purchases.

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De Beers and the Snap Lake Environmental Monitoring Agency

Supporting community-based oversight bodies to address Aboriginal rights

The challenge

The Northwest Territories (NWT) province in Canada is one of two jurisdictions in the country where Aboriginal peoples are in the majority, constituting slightly more than 50% of the population. The region’s geographical resources include diamonds, gold, natural gas and petroleum, all of which have attracted extractive companies to the area since the early 1900s.

While the mining and oil and gas industries have brought economic growth and job opportunities to the NWT at various stages, significant challenges have arisen in terms of preserving the land and natural resource rights of the Aboriginal population throughout the course of business activities.

“When we talk about ‘Land’ in the Northwest Territories, it’s with a capital ‘L.’ Land here means more than just actual territory. It’s about wildlife, water, air quality, entire ecosystems, and livelihoods for the people who live on that land. All of this depends on the integrity of the land; and there are deep cultural connections to the natural resources connected to both the land and the environment.”

Alex Power, Yellowknives Dene First Nation

The response 

Under the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), land-related human rights issues are of particular concern in the context of business impacts on indigenous populations. In this context, three diamond mines in the NWT have taken a distinct approach in understanding and managing risks to surrounding communities when it comes to land and the environment in connection with mining operations. The licensing and registration process for each mine has involved legally binding environmental agreements between the respective diamond company, the federal government, the NWT government, and affected Aboriginal groups in the area.

Each agreement requires the establishment of a community-based, independent environmental monitoring agency (EMA) to study potential and actual environmental impacts, including those that relate to impacts on people, and facilitate activities around the free, prior and informed consent (FPIC) of Aboriginal groups in relation to each mine. Each EMA acts as a public watchdog organization to ensure environmental regulatory compliance by the mining company and oversee inspection processes by government regulators.

The three EMAs in the NWT include: (1) the Independent Environmental Monitoring Agency (IEMA), covering Dominion Diamond Ekati Corporation’s Ekati mine; (2) the Environmental Monitoring Advisory Board (EMAB), covering Diavik Diamond Mines’ Diavik mine; and (3) the Snap Lake Environmental Monitoring Agency (SLEMA), covering De Beers Mining Canada’s Snap Lake mine. All three agencies facilitate multi-stakeholder dialogue and engagement across Aboriginal, company and government actors.

“Our approach is to engage early and often with potentially affected communities, going beyond the minimum requirements of the law to capture issues and concerns that aren’t yet fully addressed in legislation. We also share learnings from our experiences with SLEMA across the whole of the organization, integrating a better understanding of these issues across procurement, human resources, senior management and other functions.” 

– ALEXANDRA HOOD, DE BEERS MINING CANADA

Key aspects of the initiative

As an example of the EMA approach to addressing land-related human rights risks to Aboriginal groups associated with mining activities, De Beers and the work of SLEMA involves the following components and activities to date:

1. Secretariat with an Executive Director and an Environmental Analyst. Led by the Secretariat, the agency is charged with: “(1) Reviewing and commenting on the design of monitoring and management plans and the results of these activities; (2) Monitoring and encouraging the integration of traditional knowledge of the nearby Aboriginal peoples into the mine’s environmental plans; (3) Acting as an intervener in regulatory processes directly related to environmental matters involving the Snap Lake Project and its cumulative effects; (4) Bringing concerns of the Aboriginal peoples and the general public to De Beers Canada Mining Inc. and the government; (5) Keeping Aboriginal peoples and the public informed about Agency activities and findings; and (6) Writing an Annual Report with recommendations that require the response of De Beers Canada Mining Inc. and/or government.”

“De Beers has been very proactive in its engagement with SLEMA. Our assessment is that they want to do a good job and have this be a positive case study that they can learn from. They’re quite focused on engagement and want the project to be wrapped up nicely. They place particular importance on the role of SLEMA in bringing traditional knowledge into the picture and incorporating this information in the company’s decision-making processes.

De Beers and other companies must understand that, if they want to do business in these types of regions, they have to do it in collaboration with the impacted communities. The SLEMA model is a smart approach that should be replicated, synchronized, adequately resourced and shared wherever possible.” 

Philippe di Pizzo, Executive Director, SLEMA

2. Agency board comprised of eight representatives from the four signatory Aboriginal groups, including the Tli Cho Government, Lutsel k’e Dene First Nation, Yellowknives Dene First Nation, and the North Slave Metis Alliance. The board “strives to involve Aboriginal traditional knowledge and conventional science in its assessment of mining activities and environmental reports submitted by De Beers and government inspectors.”
   
3. Technical panel made up of scientific experts who are familiar with the NWT and who have reviewed the mine’s annual reports, wildlife monitoring program, Aquatic Effects Monitoring Program Design Plan, and the Interim Closure and Reclamation Plan.
4. Traditional Knowledge (TK) panel comprised of Elders from the affected Aboriginal groups that have hunted, trapped and lived in the area of the mine site. The TK panel provides “advice on water and fisheries issues and wildlife and habitat issues.” The group has a particular focus on the mine’s current closure activities and on ensuring that this stage of the project is monitored for the long-term stability of the land once the company leaves.

“It is incredibly important to have an independent oversight body for these types of business projects, where surrounding communities are impacted in numerous ways. It’s really key for Aboriginal groups to have an expert body to go to, because we’re under-resourced, particularly where multiple projects require our consultation and participation. These oversight bodies also carry a lot of weight in terms of credibility as they are directed by multiple groups, maintain full independence and blend scientific and traditional knowledge.” 

– ALEX POWER, YELLOWKNIVES DENE FIRST NATION

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PepsiCo’s Participation in Oxfam’s FAIR Company-Community Partnerships

Piloting new models to address risks to land rights in the palm oil industry

The challenge 

Palm oil is the most widely consumed vegetable oil on the planet, with global use more than doubling over the past 15 years. Currently contained in approximately half of all consumer goods, this high-yielding agricultural commodity is found in packaged foods like margarine, ice cream and chocolate, as well as non-food products like body lotion, soap and biofuel.

The production of palm oil, while highly efficient as compared to all other oil crops, requires considerable swaths of land to be cleared for palm nurseries and plantations. Industry analysts have estimated that, in order to meet projected demand growth, global palm oil production “will need additional land that would be equivalent to the total area of Bangladesh” by 2050.

Land expansion is therefore key to the sector’s ability to keep up with this rapid increase in global demand. As a result, businesses along palm oil supply chains have long faced significant public criticism around the industry’s contributions to deforestation, biodiversity loss, climate change and other environmental impacts. The sector has also been linked to significant human rights violations related to communities’ land and natural resource rights, food insecurity and land conflict. More recently, the production and processing of palm oil has been connected to reports of child labor, forced labor and other labor-related impacts.

With the aim of improving environmental and social sustainability in the industry, various palm industry stakeholders came together to form the Roundtable on Sustainable Palm Oil (RSPO) in 2004. The RSPO’s primary mechanism in working to achieve this goal is “a set of environmental and social criteria which companies must comply with in order to produce Certified Sustainable Palm Oil.” With the immense amount of land involved in palm oil production, the RSPO’s focus thus far has been on certification among large-scale producers. At the same time, a significant amount of the sector’s land use is among smallholder farmers whom current certification mechanisms do not often reach and where risks to people and the environment are often among the most severe.

“The main issues linked to the palm oil sector are connected to the industry’s rapid growth, which requires additional land. The key risks and impacts are therefore around deforestation and greenhouse gas emissions, but also around land grabs and land degradation, both of which directly impact people.

There is a particular lack of visibility around these issues when it comes to smallholders, who are bringing land assets to out-grower schemes that often fail to take an inclusive approach with smallholders and communities. These long-standing palm oil models are therefore characterized by exploitation and vast changes in land use without adequate social and environmental protections in place.”

– JOHAN VERBURG, OXFAM NOVIB

The response

As a significant buyer of palm oil, PepsiCo is an important actor in addressing land-related human rights issues in the industry. The global food and beverage company has identified land rights as one of its salient human rights issues – the human rights at risk of the most severe impacts in the company’s operations and supply chains. PepsiCo’s salient human rights issues also include land-related issues such as the human right to water and vulnerable workers such as women.

A key milestone in PepsiCo’s approach to the sustainable sourcing of palm oil was its 2014 commitment to “zero tolerance” for land grabs across its supply chains following Oxfam’s Behind the Brands campaign and associated advocacy efforts. In the past year, PepsiCo has also made a number of time-bound implementation plans regarding its land rights commitments in Brazil, Mexico, Thailand and Indonesia.

As the largest buyer of palm oil in Mexico, the company has published a detailed analysis of land tenure risks and impacts and is now carrying out training on high conservation value (HCV) and high carbon stock (HCS) assessments, as well as separate capacity-building programs with the national association of palm oil mills and producers, smallholders and the federal government.

As part of these ongoing efforts, PepsiCo made a commitment in February 2018 to participate in Oxfam’s FAIR Company-Community Partnerships, which “offer an alternative business model that addresses sustainability issues holistically, ensuring respect for human rights, protection of the environment, and inclusive economic development through a multi-stakeholder, landscape-based approach.”

With an initial focus on Indonesia in its work with PepsiCo, the FAIR Partnerships project and its acronym stand for: (1) Freedom of choice, including free, prior and informed consent; (2) Accountability, including transparent agreements and grievance mechanisms; (3) Improvement and sharing of benefits, including improved yields and resource use efficiency; and (4) Respect for rights and the environment.

“When individuals and communities understand their rights regarding land and land tenure, it contributes to them being in a secure position where they are better able to claim the full range of their other human rights.We know that the challenges and issues in palm are systemic and we can’t change them alone. We need to collaborate with others, and the FAIR Partnerships project’s role as a multi-stakeholder platform is key in this regard.This is about further developing smallholder farmers and women, protecting the environment, and implementing our commitments on land rights. We’re building on our experience and learning in other sectors and geographies to maximize positive outcomes for people with this project.”

Natasha Schwarzbach, PepsiCo

Key aspects of the initiative

The FAIR Company-Community Partnerships “require the active participation of multiple global and national companies in the palm oil value chain, local government agencies, civil society groups, and farmer organizations.” Following the development of its conceptual model in 2014, the initiative was co-created with sector stakeholders for two demonstration projects that began initial field-level activities in 2017. As the project is taken to scale, it will reach multiple locations in Indonesia, the Democratic Republic of the Congo and Nigeria.

PepsiCo is the first buyer to publicly support the FAIR Company-Community Partnerships. In addition, the initiative has “engaged with numerous commodity sector and financial sector companies” including “plantation and mill companies, consumer goods manufacturers, commercial and development banks, and institutional and impact investors.” In these engagements, the project’s approach is to “collaborate with buyers and investors to engage and support palm oil producers who, in turn, engage smallholder suppliers and their host communities.”

“The FAIR Partnerships project is rethinking the ‘business as usual’ growth model for palm oil production, processing, and trade. It’s taking a holistic approach that zooms in on company-community relations to more effectively include smallholders and impacted communities in land use planning and development.The businesses involved, including PepsiCo, are key ambassadors for this new model as it builds on other collective, multi-stakeholder efforts such as RSPO. Our goal in the long term is to move from commitments around what you should not be doing as a company, for instance ‘zero tolerance’ for land grabs and other human rights violations, to alternative models that are more positive and focused on implementation.”

– JOHAN VERBURG, OXFAM NOVIB

While the project remains in the early stages of implementation, the initiative is currently focused on demonstration projects that can then be scaled up based on “the proven business case, lessons learned, and impact measured.” The main components of these demonstration projects will include:

• Participatory mapping and land use planning to “establish multi-functional mosaic landscapes in which stakeholders … arrive at optimal combinations of export crops such as palm oil, local food crops and conservation areas, notably forest and peat land” in order to enhance food security, safeguard land rights and diversify incomes. Local government authorities will be invited to support this landscape approach.
• Direct engagement from palm oil companies to their host communities and small producers “at an early stage, when a company and host community start to (re-)consider relationships in palm oil production, especially at the moment of new plantings or replanting.”
• Capacity building with local civil society organizations, service providers and government actors, as well as environmental organizations and other relevant platforms in order to align, and not duplicate, efforts.
• Engagement with commodity markets and capital markets, which aim to “execut[e] their sustainable palm oil policies and [meet] sustainability objectives, notably taking deforestation out of their value chains and ensuring smallholder inclusion.”
• Monitoring, evaluation and learning systems that build out data collection methods and guide joint learning.

“FAIR Company-Community Partnerships bring together a wide range of salient human rights issues in the palm oil industry, providing an avenue for companies to address their most severe impacts more holistically. Implementation of commitments around land rights and corporate respect for human rights takes time and resources, but PepsiCo has taken an important step in committing to this project. The lessons they learn through their involvement will be valuable not only to PepsiCo but to wider industry efforts.”

Chloe Christman Cole, Oxfam America

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Total’s Community Liaison Officer Approach to Dialogue with Indigenous Groups in Bolivia

Going beyond compliance to engage rights-holders early and often

The challenge

Land rights and land tenure issues have a particularly complex history in Bolivia. Rich in gas reserves, the landlocked country in western-central South America has undergone various stages of political turmoil due in no small part to conflict over who controls these natural resources and associated landholdings.

Since 2003, Total Exploration and Production Bolivia (TEPBO), a wholly-owned subsidiary of French oil and gas company Total, has explored natural gas projects in Bolivia’s eastern lowlands, where several Guaraní indigenous territories are located.

“The operations in our business units may require land, for temporary or permanent use, including the possibility of physical and/or economic displacement and resettlement, which can, in turn, impact the human rights of neighboring communities. Depending on the specific societal context such as population density, land occupation and use, gender dimensions or livelihood patterns, there may be negative impacts on livelihoods.”

– TOTAL’S 2016 HUMAN RIGHTS BRIEFING PAPER

The company’s Incahuasi project, the development of which began in 2012, faced challenges in its relationship with Guaraní communities when, during excavation activities in preparation for the construction of a gas plant, archeological findings including artifacts and burial remains were uncovered. In response to these developments and corresponding tensions with local indigenous leaders, the company engaged a conflict transformation specialist, a historian specializing in Bolivian indigenous groups, and the Office of the High Commissioner for Human Rights in Bolivia to carry out cross-functional human rights workshops and awareness-raising among TEPBO staff.

“Access to land can be a significant issue, both in developed and developing countries, and it is a particularly important topic in areas where land is used by communities for farming, tourism or where there are cultural heritage concerns around land. It can also be especially complex in developing countries where land grabbing could be prevalent and where the land titling process is inefficient or not transparent. Our operations are sometimes located in these challenging environments. Some of our societal assessments and human rights assessments have shown that land access is a significant human rights issue in our operations.”

Total’s 2016 Human Rights Briefing Paper

The response

Under the umbrella of “human rights and local communities,” Total has identified its salient human rights – the human rights at risk of the most severe impacts in the company’s operations and supply chains – to include access to land. The oil and gas company’s salient issues also include land-related issues such as the right to health and the right to an adequate standard of living since “[n]oise, dust, emissions and other impacts could have implications for the health of local communities, their livelihood and access to ecosystem services – i.e. services delivered by nature to people – like drinking water.”

In the context of its experience with the Incahuasi Project, TEPBO reexamined its community relationship approach in the country, particularly when it comes to communication and participatory strategies for social and environmental impact assessments. In 2015, TEPBO began environmental and social studies of exploration activities for its Azero Project, which covers a land block adjacent to the Incahuasi Project area. The Azero block contains a national park, presenting heightened risk for additional land-related human rights impacts and associated company-community conflict. 

In its exploration and production (E&P) business segment, Total has instituted a Community Liaison Officer (CLO) program as part of its efforts to address these salient issues. CLOs are “typically members of the local community, whose language they speak and whose customs they understand,” and they are directly employed by Total’s business units to maintain a dialogue with local communities impacted by the operations of the company or its affiliates.

Implementing new strategies based on its experience with the Incahuasi Project, TEPBO has subsequently taken a distinct approach in its Azero Project. The company’s new model incorporates a key role for its CLOs and recognizes the need for heightened measures that go beyond expectations laid out in national regulations when it comes to community consultation and participation around land.

“Our approach in the Azero project in Bolivia has required that we go beyond compliance of local legal standards and put in efforts to engage in meaningful consultation with affected communities and reach international expectations. For that purpose, initiating early engagement, by conducting in-house baseline social studies with a participatory approach and with a highly trained and well-respected CLO team, has been challenging at times but a very fruitful experience that we are now aiming to replicate elsewhere. We’ve observed the communities that we’ve worked with knowing and claiming their rights based on this experience and now asking their leaders and other companies to meet these higher standards as well. Another important component has been engaging external stakeholders like International Alert, CDA, and Oxfam to consistently challenge us, bring constructive insights, and foster the effectiveness of our social performance.”

– CYNTHIA TRIGO, TOTAL

Key aspects of the initiative

TEPBO’s CLO approach to dialogue with the Guaraní groups potentially affected by activities associated with the Azero project includes the following components:

• Social baseline study at the start of exploration activities, conducted by a team of CLOs who were also social science professionals. The study took a participatory approach, involving a wide range of indigenous representatives, not just traditional leaders. The aim of the various in-person meetings that took place as part of the study was to provide early transparency around the project and multiple opportunities for input regarding potential impacts and mitigation measures.
• Subsequent social impact assessments, carried out by consultants but also taking a participatory approach with the affected communities who identified and validated the potential impacts of the project.
  
• Gap analysis by external experts around the concept of free, prior and informed consent (FPIC), drawing from the expectations set out in the International Finance Corporation’s Performance Standards.
• Building out of internal TEPBO “societal team” with experts in community engagement and relationship management in Bolivia, alongside ongoing engagement with key stakeholder groups such as local government authorities, local offices of international human rights organizations, and expert civil society organizations.

“Companies should start engaging potentially impacted communities as early as possible. Part of what we’ve learned from our experiences in Bolivia is that strong management systems around land and human rights issues need to be put in place at the exploration phase if risks and impacts are to be correctly understood and addressed. These issues can then be better integrated throughout decision-making processes and the company’s relationship with communities is then more likely to be positive throughout the course of the project. This engagement, early and often, is a smart investment, not simply an additional cost. For instance, our hiring of CLOs and investment in community relationship programs make good business sense in addition to being part of Total’s responsibility to respect human rights.”

Cynthia Trigo, Total

Gender Equality

Women and girls comprise half of the planet’s population; their empowerment is essential in expanding economic growth and promoting social development in a sustainable way.

Gender inequality remains an everyday reality for the world’s women and girls. It can begin right at the moment of birth and continue throughout the course of a woman’s life.

Despite critical advances over the course of recent history, women in all countries and across all socioeconomic levels in society can face various forms of unfair treatment, including discrimination, harassment, domestic violence and sexual abuse. Other forms of abuse that are particularly prevalent in certain countries or cultural contexts include forced marriage, honor killings, deprivation of education, denial of land and property rights, and lack of access to work and to health care.

An estimated 1 out of every 3 women worldwide has experienced sexual or physical violence at home, in her community, and/or in the workplace.

Women may experience human rights abuses at different points in their working lives, including during recruitment, hiring, promotion and termination processes, as well as in daily interactions with colleagues and supervisors.

Outside of the workplace, women are often particularly vulnerable to the social and environmental impacts of business activities. For example, in many developing countries, women and girls are primarily responsible for fetching and hauling water. When company operations contaminate local sources, it is they who carry the burden of walking, often for hours, to the nearest substitute, which can prevent them from working or going to school.

According to the UN Entity for Gender Equality and the Empowerment of Women (UN Women), gender “refers to the social attributes and opportunities associated with being male and female and the relationships between women and men and girls and boys, as well as the relations between women and those between men. These attributes, opportunities and relationships are socially constructed and are learned through socialization processes.”

Furthermore, gender equality “refers to the equal rights, responsibilities and opportunities of women and men and girls and boys. Equality does not mean that women and men will become the same but that women’s and men’s rights, responsibilities and opportunities will not depend on whether they are born male or female.”

Globally, working women still earn 24% less than men on average.

Women and girls comprise half of the planet’s population; their empowerment is essential in expanding economic growth and promoting social development in a sustainable way. In many cases, the full participation of women in the workforce would add double-digit percentage points to national growth rates. Evidence from around the world shows that gender equality advancements have a ripple effect on all areas of sustainable development, from reducing poverty, hunger and even carbon emissions to enhancing the health, well-being and education of entire families, communities and countries. In fact, “[e]quality between women and men is seen both as a human rights issue and as a precondition for, and indicator of, sustainable people-centered development.”

Globally, working women still earn 24% less than men on average.

As illustrated in the figure above, and depending on the specifics of the relevant corporate initiative, addressing gender-related impacts in connection with business may contribute to the achievement of an array of the Global Goals, including:

• Goal 1: End poverty in all its forms everywhere [v]
• Goal 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture [vi]
• Goal 3: Ensure healthy lives and promote well-being for all at all ages [vii]
• Goal 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all [viii]
• Goal 5: Achieve gender equality and empower all women and girls [ix]
• Goal 6: Ensure availability and sustainable management of water and sanitation for all [x]
• Goal 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all [xi]
• Goal 10: Reduce inequality within and among countries [xii]
• Goal 11: Make cities and human settlements inclusive, safe, resilient and sustainable [xiii]
• Goal 13: Take urgent action to combat climate change and its impacts [xiv]
• Goal 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels [xv]

So, how are companies currently supporting a world in which these goals can become a reality – a world in which the rights of women and girls are respected across all areas of business activity?

Examples illustrated by the case studies below include:

• An individual clothing brand is piloting a peer educator training program: A global apparel company is aiming to address issues around women’s health and equality in the workplace via peer-to-peer training, sensitization among senior management, and accessible complaint channels at the factory level.
  
• Actors along a global value chain are collectively addressing the human rights impacts associated with a specific product: The largest supermarkets in the United Kingdom are working together on a product-specific project that engages importers and local civil society groups, government actors, exporters, farmers and workers to promote decent work for strawberry pickers in Morocco who are women.
  
• Brands are playing a key role in a worker-driven social impact program that uses market enforcement mechanisms to drive positive change: The agricultural industry in the United States is seeing real transformation in the lives of women farmworkers who too often face gender discrimination and sexual abuse in the fields.

The case studies explore each of these innovative and evolving models in more detail. Each case study captures publicly available information on the initiative, alongside experiences and opinions from various actors involved.

These summaries do not claim to give a definitive account of a specific initiative or of all perspectives on that case study; instead, they are intended to serve as illustrative examples of how action toward corporate respect for human rights can make a critical contribution to the achievement of various goals and targets under the SDGs.

Key Takeaways on Gender Equality

Individual Company Action

Individual Company Action

1. Many human rights risks and impacts associated with women’s rights are intersectional, meaning that they do not exist separately from one another but are complexly interwoven. As such, gender issues may most effectively be addressed through holistic and coordinated approaches that recognize and link related issues (such as health, socioeconomic status, education, race, etc.) in activities and outreach.
2. Programs that equip affected women to raise awareness themselves and provide resources to their peers may be an empowering means of expanding the scope, sustainability and accessibility of such programs.
3. Buy-in from suppliers and behavior changes at the management level are key in enhancing the long-term impacts of initiatives that may be initiated by global brands but require sustained commitments from suppliers.
4. Strategic partnerships with technical experts and peer companies within a sourcing country are instrumental in addressing systemic issues affecting women.
5. Increased representation of women within worker committees and at all levels of a company may be essential in accurately reflecting gender-related risks and building the trust necessary to capture and address impacts.

Collective Action

Collective Action

1. Economic empowerment and social security are integral to reducing negative business impacts on the human rights of women and maximizing outcomes for sustainable development.
2. All actors along a global value chain can use and build their leverage in unique ways to facilitate change at the international, national and local levels.
3. Collaborative efforts across a specific sector can inspire and equip affected women to collaborate and organize among themselves, potentially contributing to longer term advancements in addressing risks and impacts.
4. Worker-driven standard-setting and feedback loops can capture risks and impacts in a way that traditional social policies and audit systems might not.
5. Market enforcement mechanisms are instrumental in driving real change on the ground and can be embedded in initiatives in ways that both ensure accountability and create benefits for all actors involved.

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Inditex’s Sakhi Health and Gender Equity Project

Implementing worker-centric strategies through peer educator programs

The challenge 

There are more than 1.5 million workers in Inditex’s supply chain, and the overwhelming majority of them are women. As such, a key objective of the global apparel brand is to “promote gender equality and women’s empowerment” across the company’s own staff and throughout its supply chain.

In India, women comprise up to 80% of the workforce in the factories that Inditex sources from. Most of these women are from rural areas with limited economic and educational opportunities. Human rights risks are particularly severe when it comes to their health and well-being. For instance, factory facilities may not be equipped to accommodate the reproductive health needs of women workers; and instances of harassment, abuse and discrimination inside and within the vicinity of factories may run high.

“The textile industry is a mainstay of the economy in many of the countries where we operate and women occupy most of the jobs in all stages of production. For this reason, Inditex’s supply chain is mostly female. And it is our duty and mission to contribute to all these workers having the best working conditions and enjoying the same opportunities as a man.”

 Inditex Annual Report 2016

The response

Inditex recognized these widespread challenges in its Indian supply chain and thus launched the Sakhi Health and Gender Equity Project in 2016 with the dual objectives of addressing women’s health risks in the workplace and preventing harassment or abuse.

The project is carried out in partnership with St. John’s National Academy of Health Services (Bangalore) and the Swasti Health Catalyst. The pilot phase of the program has so far been initiated at six factories within Inditex’s supply chain in India, covering a total of 4,290 workers to date.

Key aspects of the initiative 

Named after the Hindi word for “female friend,” the Sakhi project centers on a peer educator training program where senior women workers are trained to raise awareness at the factory level and educate their colleagues in the areas of health and gender equity.

“I know that these women [peer educators] will help another ten more, and that ten will help another ten more. So, I think this whole idea of creating awareness is cascading into something which is much bigger and not just restricted to this industry.”

– DR. DEEPTHI SHANBHAG, ST. JOHN’S MEDICAL COLLEGE

The Sakhi Health component of the project is carried out with St. John’s National Academy of Health Services (Bangalore) in the following ways:

• Awareness raising and sensitization workshops with workers, supervisors and factory management in the areas of reproductive and maternal health, nutrition, hygiene, HIV/AIDS, ergonomics and access to local health care services.

“The majority of workers at the factory level in the garment industry in South India are women; and many of them are coming from rural areas with very little information about their health and how to access basic health services. This is a risk for a company like Inditex that is sourcing from factories situated in South India. They have recognized this and are trying to skill up both workers and management through the peer educator program, which is periodically assessed and adapted.”

Dr. Naveen Ramesh, St. Johns Medical College

According to Inditex:

• Two factories have initiated these programs so far, covering 740 workers.
  
• Going forward, the project aims to bring together factory-level peer educators at periodic conferences to discuss challenges, share good practices and explore collective solutions.

The Sakhi Gender Equity component of the project is carried out with the Swasti Health Catalyst in the following ways:

• Sensitization training of top management and production heads in 100% of Inditex’s suppliers in India in an effort to raise awareness of gender equality issues primarily among men in senior management at the manufacturing level.
  

“We want to make sure that management at the supplier level is accountable for the successful running of these programs. It has to be a supplier run and owned project for the solutions to be sustainable and we are thankfully seeing this happen as suppliers are more and more building, on their own, the activities of the Sakhi project into their production calendars going forward.”

– CHRISTIAN CHANDRAN, INDITEX

• A collaborative study with other brands working in India to identify and analyze worker needs. The study aims to advance worker well-being, better understand the challenges faced by migrant workers, and address issues related to gender-based violence, harassment and discrimination as a means of better informing factory-level programs.
  
• Development of an anti-discrimination and anti-harassment guide with Swasti Health Catalyst based on consultations with suppliers and anonymous surveys of workers, supervisors, and management.

“We aim to find and implement solutions together with companies. There’s a way to achieve business objectives without compromising on values and human rights, and we’re trying to support businesses like Inditex in first understanding these issues accurately and then taking action in an informed way.”

Joseph Julian K.G. and Shankar A G, Swasti Health Catalyst

• Strengthened systems to address sexual harassment grievances in factories by establishing policies and carrying out capacity building for management and members of worker committees.
  
• Creation of Social Protection help desks at the factory level where workers can more easily access social protection resources and services.

According to Inditex:

• 4 factories have initiated these programs so far, covering 3,550 workers.
• 36 employment agencies and 327 peer educators have been trained in the prevention of gender-based abuse in employment practices.

“Our Sakhi related work is not just a project. It’s a movement, and it’s creating change both inside and outside of factories. We’re aiming to achieve this positive change toward gender equality and worker health in a culturally aware, progressive way by adding new dimensions every year and committing to the long-term work of changing mindsets and – most importantly – behaviors.”

–  MAYANK KAUSHIK, INDITEX

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Better Strawberries Group

Enhancing women’s social security and economic empowerment

The challenge 

At the break of dawn, thousands of women across the Larache province in northern Morocco pack into vans and travel long distances along rough roads to strawberry fields. There, they pick strawberries for eight hours or more, often for less than minimum wage and without the social security protections offered at the national level. They may never interact with farm owners and instead deal only with labor intermediaries (waqqaf) regarding recruitment, negotiation of wages, transportation, supervision and payment. They may face sexual harassment and verbal abuse from their supervisors who are mostly men. And some do not have protective gear to safeguard their health from the heavy use of pesticides in the berry industry nor regular access to hygienic toilets and clean water throughout their work days.

Morocco is one of the largest exporters of strawberries in the world; and the berry business is a key player in the Moroccan government’s national development plans. Field workers in this burgeoning industry are overwhelmingly women; an estimated 20,000 women are brought into strawberry jobs each year. While this growth has brought significant working opportunities for women in Morocco, it has also created mounting pressure on growers to rapidly hire for these labor-intensive positions without sufficient attention to, or concern for, putting decent working conditions in place.

“Morocco’s female strawberry pickers, in many cases, could possibly be regarded as a real and classic example of women’s low-paid labour facilitating greater profits for others … [W]hile the sector has been growing significantly and contributing to positive economic results, unfortunately working conditions within the supply chain have evolved in a ‘predominantly informal and precarious environment.’”

Sian Jones, Oxfam

The response

In 2011, after Oxfam began to highlight the increasingly precarious situation of women workers in the Moroccan strawberry industry, the Ethical Trading Initiative (ETI) and Oxfam brought together most of the United Kingdom’s major supermarkets (including Marks & Spencer’s, Tesco and Sainbury’s) and berry importers to develop a plan of action regarding the issue. Termed the Better Strawberries Group, the initiative has thus far focused on the United Kingdom as one of the largest importers of fresh Moroccan strawberries. It has increasingly engaged with retailers and brands in France, Spain and Sweden as well.

“Most of the major retailers in the UK are ETI members and already working with key suppliers, so it made sense to build on these established relationships to try and address the issues faced by these women workers in Morocco. It’s important to look at all of the actors involved in these global supply chains, facilitating collaboration and momentum at the international level while engaging the government as well as producers, civil society and workers directly in Morocco.”

– SLOANE HAMILTON, OXFAM

Shortly after the formation of the Better Strawberries Group, a stakeholder meeting was held in Morocco in 2012 where the British importers and supermarkets involved began the process of engaging Moroccan berry growers, their key associations, and civil society groups to further outline a collective 2012-2015 action plan.

“You buyers put pressure on quality with the products. You can also put pressure on the quality of the conditions for workers. Strawberry farm owners listen to you.”

Woman worker in the Moroccan strawberry industry

A unique analytical tool called SenseMaker was used in 2016 to capture the stories and insights of women workers in a way that empowered them, rather than demeaning or re-vicitimizing them. The open-ended “micro-narratives” shared by the workers through this methodology and the nuanced quantitative data captured alongside it have informed and supported the program.

Key aspects of the initiative 

The Better Strawberries Group and its affiliated programs have a distinct focus on improving the working conditions of strawberry pickers in Morocco who are women and the provision of social security services at the local level. Its activities and results to date are centered on the following three components:

1. Campaign: In partnership with the National Social Security Fund (CNSS) in Morocco and local civil society coalitions, the initiative set up “caravan” tents near work sites, transport spots and villages to facilitate the formalization of strawberry pickers’ work. This involved assisting the women in obtaining national identification cards that allow them to sign formal work contracts, register for social security entitlements, and access free health care services. Producers were also increasingly registered with CNSS as part of the program to aid the Moroccan government in the enforcement of employer contributions to social security programs, as well as minimum wage and minimum age laws. Women with two children may receive up to 40% more income due to government contributions as part of the CNSS program.

According to Oxfam:

• Approximately 16,100 women workers were reached as of 2014.
  
• More than 1,400 women received national identification cards.
  
• Over the course of the project, 14,027 individuals, including 9,205 women, received CNSS cards or verified existing cards.
  
• The number of people registered with CNSS in the Larache province increased by 40% in 2012 and 70% in 2013.
  
• The registration of workers with CNSS sits around 65% for the Larache province.
  
• The Moroccan government has provided support staff for the registration caravans.
  
• Employers have reported increased productivity and more stable workforces.

2. Observatory: Each campaign caravan also houses an “observatory” where local civil society organizations raise awareness of labor rights in Morocco, detect and collect labor rights violation cases, provide guidance and resources to the workers, and record instances for further processing. In 2016, the observatory collected 362 rights violation cases.

According to Oxfam:

• Training on the Moroccan labor code and appropriate worker relations took place with 17 producers.
  
• Agricultural transporters formed their own association; and sensitization training on safe and humane practices was carried out with government representatives.

3. Association of women workers: With support from the Better Strawberries Group, women workers came together to form their own workers association, called “Al Karama,” which means “dignity” in Arabic. The group has been an active part of the various components of the program, liaising with the campaign caravans, carrying out labor rights training and awareness raising, collectively demanding safer transport and decent working conditions, and providing referrals to workers when they report specific issues. A second association, named “Al Amal,” was created in 2013 to ensure women workers’ representation among local authorities and local growers, helping to reduce women’s vulnerability by providing a direct link between workers.

“[The women workers] have acquired a legitimacy that now allows them to organize activities independently, thereby further strengthening the social fabric among those involved.”

– 2014 OXFAM REPORT

The Better Strawberries Group has met regularly in London to discuss progress and challenges. Annual meetings take place in Morocco among the various stakeholders involved. Growers involved in the program have also joined a “Producers Platform” hosted by Oxfam to meet and discuss challenges and successes. They are in the process of developing a Code of Conduct that is drawn from the ETI’s base code.

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Fair Food Program

Taking worker-driven standards and enforcement mechanisms to scale

The challenge

The #MeToo and Time’s Up movements continue to make headlines around the world every day. As these and other campaign efforts have made clear over many decades, some level of gender discrimination, sexual harassment, abuse and/or violence in the workplace is pervasive across industries and geographies.

The agriculture sector in the United States is no exception. In fact, women farmworkers face some of the worst gender inequality conditions in the country – it is estimated that 80% of farmworkers who are women are sexually harassed or assaulted in the course of their work.

“[Sexual harassment] is the dark underbelly of American agriculture.”John Esformes, Pacific Tomato Growers“Women are routinely – routinely – sexually harassed or assaulted in the fields.”

Greg Asbed, Coalition of Immokalee Workers, Co-Founder of the Fair Food Program

On farms and in fields across the country, women farmworkers are often verbally or physically abused by supervisors or managers, frequently under threat of losing their jobs or the ability to work in the United States if they resist or report being raped, groped, grabbed, harassed, demeaned, discriminated against, or exposed to other such behaviors.

Moreover, “[w]omen farmworkers, just as their male counterparts, in fact suffer a wide range of degradations, including sub-standard wages, wage theft, physical and verbal abuse, gender and racial/ethnic discrimination, and high injury and fatality rates.”

The response 

The Coalition of Immokalee Workers (CIW), built on a foundation of farmworker community organizing in Florida since 1993, established the Fair Food Program (FFP) in 2011.

CIW, farmworkers on participating farms, farmers and retail food companies implement the FFP. The Fair Food Standards Council (FFSC) is the program’s independent monitoring body and the only dedicated third party oversight organization of its kind for agriculture in the United States.

The FFP “harnesses the power of consumer demand to give farmworkers a voice in the decisions that affect their lives, and to eliminate the longstanding abuses that have plagued agriculture for generations,” including sexual harassment, violence, discrimination and abuse.

“The Fair Food Program is tackling gender-based violence and harassment alongside sub-poverty wages, forced labor, access to remedy, and many other human rights-related issues that have afflicted this industry in the past.”

– STEVEN HITOV, COALITION OF IMMOKALEE WORKERS

The FFP currently boasts 14 participating buyers, including Yum Brands (which includes Taco Bell), Walmart, Chipotle, Trader Joe’s, Subway, Whole Foods, Burger King, and McDonald’s. Growers of 90% of Florida’s tomato production have signed on to the program. The FFP also involves strawberry and bell pepper farmers in Florida, as well as tomato growers across Georgia, South Carolina, North Carolina, Virginia, Maryland and New Jersey. In mid-2018, the FFP will be expanding into other crops in Texas.

Key aspects of the initiative

The components of the FFP make up what is called the “Worker-driven Social Responsibility” (WSR) model. The key FFP mechanisms and relevant data to date include:

1. Legally binding Fair Food Agreements between participating buyers and CIW: These agreements require the buyer to contribute to the Fair Food Premium aspect of the program, outlined below. They also provide market enforcement provisions to uphold the Fair Food Code of Conduct, which goes beyond legal compliance to set a more robust industry standard around sexual harassment and abuse, as well as issues such as forced labor, child labor, wage theft, working hours, direct employment and decent working conditions, including shade tents, clean drinking water, regular bathroom breaks, safe transportation and an end to forced overfilling of buckets, which contributes to underpaying workers while adding to the physical strain of farm work.

“[The FFP] ends up being a win-win-win proposition. Farmworkers’ lives are improved – immeasurably – every day. The growers individually become better operations, with less risk. And buyers no longer have to worry about the possibility of another case coming out.We’re taking a business approach to human rights that is worker-driven and based on the principle that companies need to use their market power to improve people’s lives.

Our ‘Worker-driven Social Responsibility’ (WSR) model works, and it can be replicated across other industries and geographies if more and more businesses get involved. The WSR Network is supporting these efforts, spreading the model to other areas in the United States, such as with the Milk with Dignity program in Vermont, and even overseas, feeding into the Bangladesh Accord and tackling workers’ rights issues in the seafood industry in Southeast Asia.” 

– GREG ASBED, COALITION OF IMMOKALEE WORKERS, CO-FOUNDER OF THE FAIR FOOD PROGRAM

2. Fair Food Premiums: Outlined within the Fair Food Agreements, this mechanism commits participating buyers to pay a “penny per pound” premium on top of the regular price paid for tomatoes or other covered products. The premium is then passed through by farmers as a bonus on worker’s paychecks, which are monitored by the FFSC. This component of the FFP has been lauded as an innovative living wage initiative that recognizes that “workers who worry about putting the next meal on their family’s table are often too constrained by fear to be effective monitors and defenders of [their own] rights,” including those relating to gender equality. Since the FFP’s inception, over US$26 million have been added to farmworkers’ payrolls.
   
3. Worker education: At the time of hire and throughout the growing season, each farmworker covered by the FFP receives training on the Fair Food Code of Conduct, including its zero tolerance policies on forced labor, child labor, sexual violence and abuse in the workplace. The CIW Worker Education Committee, which is comprised of farmworkers themselves, conducts worker-to-worker training that takes place on company time and with a company representative present to demonstrate support from the employer. To date, over 220,000 workers have received “Know Your Rights and Responsibility” materials (available in English, Spanish and Haitian Creole). CIW has educated nearly 52,000 workers face-to-face.
   
4. Independent audits: Conducted by the FFSC, the independent and sometimes unannounced FFP audits involve extensive and ongoing document review and interviews with all levels of a farm’s management, from the boardroom to the field. Moreover, worker interviews take place with 50% or more of the workforce on any given farm, due in large part to auditors’ efforts to reach workers both in the fields and offsite, as auditors visit housing camps, ride buses and make themselves present at transport spots. Importantly, supervisors are not present when onsite interviews are conducted to ensure openness of workers in sharing challenges or concerns. Audit reports are then provided to the grower and to CIW. Over 20,000 workers have been interviewed as part of the FFP audit program. As of October 2017, the program has redressed 6,839 audit findings of non-compliance.
   
5. Complaint resolution mechanism: In recognition that even unannounced audits are only a snapshot in time and acknowledging the right to remedy when human rights violations occur, the FFP includes a confidential complaints system that is independently run by the FFSC. This system centers on a toll-free, bilingual complaint line that FFSC investigators who know the relevant farms answer 24 hours a day, 7 days a week. The hotline information informs subsequent audit interviews and worker education programs. Since its start and covering around seven growing seasons so far, the program has resolved more than 2,000 complaints. Most complaints are resolved in less than two weeks and the vast majority in less than a month.

“We’ve received complaints and testimonies of hostile work environments, of supervisors asking for sexual favors in return for ensuring that this woman keeps her job. We’ve made sure that workers know that there are different avenues that they can take to make a complaint so that there isn’t any more sexual harassment in the fields.”

Lupita Aguila Arteaga, Fair Food Standards Council

When a complaint is submitted to the hotline, the FFSC investigates the situation either alone or in collaboration with the relevant grower, depending on the specifics of the situation, and then develops a corrective action plan for implementation by the farmer with support from FFSC. Whenever possible, resolutions of complaints are made known to the other workers to demonstrate a lack of retaliation for bringing complaints and to reconfirm the grower’s commitment to the program. The FFSC maintains a detailed database of complaints and corrective actions taken; an appeals mechanism is built into the system.

“In the instant information age, each brand is just one click away from being in the headlines for human rights violations. We’re holding the mirrors up to prevent the risk before it blows up in companies’ faces.In sexual assault and other cases, we’ve seen each mechanism of this program kicking in and working the way they’re supposed to. Only a program like this can give brands reassurance while at the same time ensuring the protection of workers that come forward with issues and early warnings. The headlines for the Florida tomato fields used to be ‘assault and slavery.’ Now, the industry is known as ‘the best work environment for agricultural workers in the entire United States.’”

– JUDGE LAURA SAFER ESPINOZA, FAIR FOOD STANDARDS COUNCIL

6. Market enforcement: In the event that a serious violation of the Fair Food Code of Conduct arises at the farm level via any of the above mechanisms, the participating grower must remedy the situation. If the grower fails to do so, it is suspended from the FFP and the participating brands will therefore no longer buy from that supplier until it gains reentry to the FFP. This “real market” incentive within the FFP is a key contributor to the fact that sexual harassment and abuse are now the exception, rather than the rule, throughout the Florida tomato industry and in the additional farms covered by the program.According to the FFSC, “These measures have brought an end to impunity for sexual violence and other forms of sexual harassment at Fair Food Program farms, where there have been zero cases of rape or attempted rape since the implementation of FFP standards in Season One. Cases of sexual harassment by supervisors with any type of physical contact have been virtually eliminated, with only one such case found since 2013.”

“The work that [the FFP] does makes you feel that you are not so alone in this country. I think many women now have more courage to speak and not remain silent.”

AMALIA MEJIA DIAZ, FORMER FARMWORKER WHO FFSC HELPED WITH A SEXUAL ASSAULT CASE

Forced Labor

Combatting forced labor situations, including those that involve children, is a necessary component in building sustainable economies that work for all.

On any given day, according to the most recent estimates, nearly 25 million people are living under conditions of forced labor; 71 percent of them are women and girls.

Across the world, millions of people are working against their will, exploited for their labor, and treated as no human being should ever be. Some are recruited with promises of decent work and fair pay and then taken to job sites, often far away from their homes and families, where they are physically barricaded from leaving and threatened if they refuse to work. Others are forced to hand over their passports or other documents essential to their freedom of movement, leaving them at the mercy of their employers.

The burden of debt is often used as a weapon in these situations, forcing individuals to continue working under inhumane conditions for months and even years on end until recruitment fees or the costs of transportation fronted by employers or recruiters are paid off using these workers’ wages. Clearly, slavery is not a thing of the past.

One in four victims of modern slavery is a child.

According to the International Labor Organization (ILO), forced labor is “work that is performed involuntarily and under the menace of any penalty,” meaning “situations in which persons are coerced to work through the use of violence or intimidation, or by more subtle means such as manipulated debt, retention of identity papers, or threats of denunciation to immigration authorities.” It is very often linked to seemingly legitimate commercial channels.

Approximately 16 million victims of forced labor are in the private economy. Over half of these individuals are in situations where personal debt is used to forcibly obtain labor. Moreover, “this proportion rises above 70% for adults who were forced to work in agriculture, domestic work or manufacturing.”

Individuals may also be coerced or deceived into forced labor by employers or recruiters when their wages are withheld or when they are prevented from leaving by threats, document retention or acts of violence, including sexual violence.

Companies across various sectors are increasingly including forced labor among their salient human rights issues – the human rights at risk of the most severe negative impacts through the company’s activities and business relationships.

Combatting forced labor situations, including those that involve children, is a necessary component in building sustainable economies that work for all.

As illustrated above, and depending on the specifics of the relevant corporate initiative, private sector efforts to address forced labor may contribute to the achievement of an array of the Global Goals, including:

• Goal 3: Ensure healthy lives and promote well-being for all at all ages[i]
• Goal 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all [ii]
• Goal 5: Achieve gender equality and empower all women and girls[iii]
• Goal 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all[iv]
• Goal 10: Reduce inequality within and among countries[v]
• Goal 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels[vi]

So, how are companies currently taking action to bring about a world in which both adults and children are free from forced labor? Examples illustrated by the case studies below include:

• Individual corporations are tackling key entry points: A leading tech company is drawing a strong line in the sand when it comes to forced labor risks, requiring all of its suppliers to directly employ their workforce and support responsible recruitment practices that prevent conditions in which forced labor can thrive.
  
• Manufacturers are reforming recruitment and employment systems: A garment producer in India is taking concerted action to combat conditions that support or allow for a local system of exploitation that traps young women and girls into forced and child labor.
  
• Global buyers and local actors are collaborating in high-risk contexts: A network of brands and retailers sourcing from the seafood supply chain in Thailand are coordinating with local processors, producers, trade unions, NGOs and government actors to enhance transparency, foster multi-stakeholder engagement and spark systemic change across the industry.
  
• Leading brands are engaging with programs that prioritize worker voice: A group of international buyers is participating in an innovative program that tackles the issue of forced labor across various sectors in Southeast Asia via empowerment of worker voices and collaborative, rather than punitive, partnerships with suppliers to improve conditions on the ground.

The case studies explore each of these innovative and evolving models in more detail. Each case study captures publicly available information on the initiative, alongside experiences and opinions from various actors involved.

The case study summaries do not claim to give a definitive account of a specific initiative or of all perspectives on that case study; instead, they are intended to serve as illustrative examples of how action toward corporate respect for human rights can make a critical contribution to the achievement of various goals and targets under the SDGs.

Key Takeaways on Forced Labor

Individual Company Action

Individual Company Action

1. Strategic engagement with expert organizations can drive leading and targeted action on a severe human rights issue in a company’s supply chain.

2. Strong supplier relationships that focus on capacity building and support rather than on “policing” can result in mutually beneficial outcomes.

3. There can be forced labor risks in the recruitment and hiring of local workers as well as migrant workers.

4. Manufacturer-led efforts that engage business partners downstream are possible and can facilitate monitoring of risks deeper in the supply chain.

5. Forced labor is a severe human rights harm that may be prioritized even when the likelihood of its occurrence is decreasing, especially when the risks are to particularly vulnerable groups.

Collective Action

Collective Action

1. Proactive, solution-oriented responses by brands connected to human rights abuses in their supply chains can spark action and collaboration that tackles the issue, rather than avoiding it.
2. Collective efforts across business relationships in a particular industry or across multiple industries can bring together information and resources to increase transparency throughout complex supply chains.
3. Tracking of impacts and improvements based on quality data management systems can greatly inform efforts to reduce and remedy impacts, as well as internal and external reporting.
4. Consistently and appropriately empowering worker voice can be a meaningful way to capture the scale and nature of impacts as experienced by the people most affected and to help companies target their responses.
5. Interventions can multiply their impact by creatively engaging workers across various entry points to more holistically inform workers and address the myriad harms caused to victims of forced labor.

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HP’s Foreign Migrant Worker Standard

Leading the industry with action on root causes

In 2014, reports of forced labor linked to migrant recruitment practices in the electronics industry supply chain in Malaysia were coming to the surface, catching the eye of HP Inc. At the time, the company itself was identifying, through various assessment mechanisms across diverse geographic regions, that migrant workers are a particularly vulnerable population in terms of severe human rights impacts connected to the business.

Thinking critically about the root causes of forced labor among this community, HP determined that hiring workers through recruitment agencies or labor brokers is too high a risk for the people involved in the company’s supply chain.

The response

HP released its Foreign Migrant Worker Standard in 2014 and partnered with expert organization Verité to build a body of research and dedicated program in response to the issue of forced labor among migrant workers.

The standard goes beyond general industry practice in addressing forced labor – which primarily focuses on implementing policies banning recruitment fees – to require that the company’s suppliers directly employ any foreign migrant workers in their workforce. While recruiters may still be used, once a worker is placed, they must become a formal employee of the HP supplier.

More specifically, the standard “prohibits [HP] suppliers from outsourcing the migrant worker employment relationship to third-party labor brokers – a major source of vulnerability for migrant workers – as well as eliminating the practice of charging workers recruitment fees and requiring that workers hold their own passports.” The standard also requires employment contracts written in the worker’s native language.

HP is the first company in the information and communications technology (ICT) sector to require all of these practices.

“HP’s Foreign Migrant Worker Standard remains a very forward-looking approach. It takes commitment around forced labor one step further to identify a root problem – indirect employment – as a key risk factor. The company decided to not try and work around that risk, but instead develop a standard to address it. This is clear leadership and hopefully more companies will take this kind of work on.”

Shawn MacDonald, Verité

Key aspects of the initiative

HP has so far implemented its Foreign Migrant Worker Standard by:

1. Continuing its partnership with Verité to develop supplier guidance on the standard. The guidance includes “information on how to transition to direct employment, the ‘no recruitment fee’ model, and how to identify, screen and select ethical recruitment agents.” Each supplier engaged in the program is allowed a one-year grace period to implement the standard, and HP’s procurement managers are integrally involved in roll-out of the guidance.
   
2. Developing and disseminating a supplier self-assessment questionnaire to not only raise awareness and understanding of the standard, but also to serve as a foundation of relevant changes to onsite audit practices. For instance, HP auditors now use focused foreign migrant worker assessments as a tool to measure implementation and enforcement of the standard while providing support to suppliers where performance is weak.
   
3. Conducting a series of dialogues and workshops with government representatives and collaboration with peer companies and suppliers in high-risk areas such as Southeast Asia. HP’s engagement in this area has included the donation of its supplier guidance to the Responsible Business Association (RBA) for others to use and learn from; chairing the RBA-affiliated Responsible Labor Initiative Steering Committee; and serving on the Steering Committee of the Leadership Group for Responsible Recruitment, which is “a collaboration between leading companies and expert organizations to drive positive change in the way that migrant workers are recruited,” including “the total eradication of fees being charged to workers to secure employment.”

“A key lesson learned from our work in this area is that you can’t do it alone. Internally, this means having a committed tone from the top and across the various functions involved. For instance, we couldn’t do this work if we didn’t have support from our procurement managers, who understand the issues and drive the actions on a daily basis.

Each company needs to do their part to ensure freely chosen labor, whether you are a global company where you have a large scope to work with or a small business where you see the issues every day.”

– JAY CELORIE, HP

4. Aiming to create fora for suppliers to share best practice. The company has received feedback that the direct hiring requirement has resulted in its suppliers gaining important knowledge about recruitment agencies and monitoring their practices in a more effective and sustainable manner.

“HP’s strong relationships with its suppliers is at the core of our Foreign Migrant Worker Standard. Implementation is not perfect, and it takes time, but responsible engagement is our approach.

We try to be transparent and clear and we ask that of our suppliers in return. As long as there’s a corrective action plan in place and we’re working proactively on that together with the supplier and building our leverage, we will always stay committed to progressing forward and not cutting off the relationship. Otherwise, it’s the workers that are most harmed.

We’ve had a paradigm shift in our thinking – instead of being anxious about going and looking for the issues, we recognize that this is our responsibility. And, in fact, this has been really freeing. We know we’re going to find issues, so we identify them and then get more quickly to the important work of addressing them in meaningful and positive ways.”

– TANVI KAFI, HP

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Responsible Labor Initiative

New cross-industry initiatives to watch

Launched in June 2017, the Responsible Labor Initiative (RLI) is a multi-industry, multi-stakeholder collaboration stemming out of the forced labor commitments and programs of the Responsible Business Alliance (RBA), formerly the Electronic Industry Citizenship Coalition (EICC).

The RLI aims to bring together multiple sectors to harness members’ collective influence in its efforts to ensure the rights and dignity of workers vulnerable to forced labor in global supply chains are consistently respected and promoted.

As a member of the RLI’s multi-stakeholder Advisory Board, David Schilling of ICCR says, “The RLI is smartly building on a set of tools that the RBA has developed over time, retooling them to deal with forced labor and recruitment issues in a way that creates a path for recruitment agencies to become recognized as ethical recruiters.”

The RLI utilizes a Labor Migration Corridor Database developed with Verité to facilitate honest conversations with suppliers around the true costs of responsible recruitment practices. It is led by a multi-industry Steering Committee that includes representatives from the electronics, construction, food and beverage, and retail sectors.

 In early 2018, the initiative launched its Responsible Workplace and Responsible Recruitment Programs with supporting partner ELEVATE. The Responsible Workplace Program focuses on worker engagement through mobile survey technology, a third-party helpline, and trainings on workers’ rights, pre-departure orientation, and worker-management communication. The Responsible Recruitment Program directly involves labor agents in self-assessments, forced labor audits, and ethical recruitment trainings. It will then provide a public list of each participant’s progression in the program toward certification.

“Forced labor due diligence must be harmonized across industries to ensure that workers vulnerable to forced labor are respected and protected. The RLI has a set of advanced tools and programs that are complementary to other initiatives in this area and that are facilitating transparency, assessment, mitigation and remediation. We’re aiming to create a market for ethical recruitment and employment. The more sectors and stakeholders that are involved, the better.”

Bob Mitchell, RBA Vice President

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Penguin Apparel’s efforts to combat Sumangali schemes

Tackling local forced labor risks from the producer perspective

The challenge

The state of Tamil Nadu in southern India is a major hub for one of the largest employment-generating businesses in the country – the textile and clothing industry. It is also home to one of the most horrendous forced labor practices that has been exposed on the international stage.

Known as Sumangali schemes, the practice involves the recruitment of young women and girls by labor brokers into contracted work at textile mills, typically for periods of three to five years. Promises of a lump sum payment at the end of the contract period – and the appeal of using this toward the dowry required in many traditional Hindu marriages – lure poor and lower caste women, girls and their families into the scheme.

Once under the control of the broker or the factory, these young women and girls are reportedly exploited with low wages and long working hours and forced to live and work under unsafe and traumatizing conditions. They are also allegedly kept in isolation from their families and the organized labor community while being harassed and violated within the mills and dormitories.

The response

Several brands and retailers have responded to the exposure of Sumangali schemes in various ways, in many cases severing ties with suppliers linked to the illegal practice. But the role of suppliers themselves in addressing the issue locally has not been highlighted as publicly.

One example of producer-led practices aimed at tackling this issue is Penguin Apparel’s program. Penguin Apparel is a medium-sized ready-made garment manufacturer in Tamil Nadu that primarily exports to Canada, France and the United States. Its work on Sumangali schemes highlights that forced labor risks are not solely linked to employers of migrant workers; they can also be of serious concern to employers of local workers as well.

Key aspects of the initiative

While Sumangali schemes in Tamil Nadu have decreased in recent years, Penguin Apparel has recognized the severity of the forced labor risks associated with the practice and its disproportionate impact on particularly vulnerable groups in India.[i]

 Major components of the manufacturer’s work around this issue include:

1. Recruitment system reform: The company has eliminated recruiters and labor brokers from its hiring practices and does not pay recruitment fees or charge workers any fees to receive employment.
   
   Human resource staff are trained in document verification to ensure that potential women employees are of legal working age. These staff members are also experienced and/or trained in identifying Sumangali scheme indicators during in-person interviews, which each potential employee must participate in before hiring takes place.
2. Management system reform: All appointment letters and contracts signed are written in the workers’ local language, and all documents verified during the hiring process are given back to the workers to ensure freedom of movement during employment.
   
   Once employed, all workers also participate in training on workers’ rights and wellness.
3. Engagement and capacity building with suppliers and contractors: In addition to auditing its own suppliers and contractors in the search for Sumangali schemes, Penguin Apparel prohibits the use of home workers – which are strongly linked with forced and child labor risks.

The company also educates its partners on social management systems and prioritizes strong communication channels to facilitate openness throughout the lower tiers of its supply chain.

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Seafood Task Force

Combining global and local forces in a high-risk context

The challenge

In June 2014, the Guardian published a shocking, in-depth investigation that spelled out in disturbing detail allegations of Asian slave labor in the production of shrimp for consumption in the United States and the United Kingdom.

The article outlined “horrific conditions, including 20-hour shifts, regular beatings, torture and execution-style killings. Some [of the victims of forced labor] were at sea for years; some were regularly offered methamphetamines to keep them going. Some had seen fellow slaves murdered in front of them.”

The response

In quick response to the exposé and the serious concerns it raised, Chareon Pokphand Foods (CPF) and Costco, both of which were implicated in the investigation, came together to establish the Shrimp Sustainable Supply Chain Task Force in July 2014.

Following an expansion of its mandate and membership, the initiative was renamed the Seafood Task Force in October 2016. It is the first industry-led, multi-stakeholder coalition of retailers, processors, producers, governments and NGOs working to eradicate forced labor in the US$7 billion seafood supply chain in Thailand.

In addition to its founding member companies, the task force now boasts leadership and involvement from major brands around the globe that are linked to the Thai seafood industry, including Mars Petcare, Nestlé, Target and Walmart. It also involves key Thai producers and processors, as well as expert NGOs such as Verité and the World Wildlife Fund (WWF), which participate via the initiative’s External Stakeholder Advisory (ESA) Committee.

“Forced labor is one of our identified and prioritized salient human rights issues. As such, we’re taking a deep dive to find where and how incidents of forced labor might occur in our supply chain. This learning feeds into our action-focused roadmap to address potential risks and any identified issues, and involves key international collaborations such as the Seafood Task Force.

Our responsible sourcing strategy builds upon an understanding that in order to achieve real sector-wide supply chain transformation, we must work together collectively, as companies and organizations, to complement and build upon individual actions.”

– ANNA TURRELL, NESTLÉ

Key aspects of the initiative

While results of the Task Force’s ongoing work need to be explicitly tracked and disclosed, the initiative is bringing together the key players in the Thai seafood supply chain in a new and innovative way.

Thus far, the Task Force’s work has focused on four main activities:

1. Mapping the various supply chains of the buyers, processors and producers involved.
   
2. Implementing “track and trace” systems to provide further transparency. 

3. Engaging with the Thai government and the Thai seafood industry as a whole on relevant national legislation, as well as the Task Force’s Code of Conduct, using its collective purchasing influence.
   
4. Fishery improvement projects that aim to reduce levels of illegal, unreported and unregulated fishing.

With the major components of its governance systems now in place and eight issue-specific working groups underway, the initiative plans to next turn its efforts to the development of data management resources that may facilitate remediation, corrective action and anonymized reporting.

In the longer term, the Task Force hopes to expand the scope of its efforts to other key jurisdictions outside of Thailand.

“The Seafood Task Force is the first major initiative to deal with forced labor in the Thai seafood market. Trying to improve life in a factory is one thing, but on ships, it’s a whole different world entirely. The challenges are really great and the conditions are really bad.

The Task Force has created specific processes that have aimed to see what’s happening at sea – where vessels are going and what labor conditions on those vessels look like. A lot of this is completely new. But an industry-wide approach is essential in addressing this systemic issue.”

Shawn MacDonald, Verité

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Issara Institute’s Strategic Partners Program

Empowering worker voice and going beyond audits to strengthen supply chains

The challenge

On fishing vessels, at ports, on farms, and at other job sites across Southeast Asia, forced labor continues to be an everyday reality. Victims of trafficking are brought across national borders under false pretenses of safe and decent work, only to be unjustly treated and exploited by recruiters and employers who trap these individuals into forced labor using physical violence or debt bondage.

Yet, time and time again, audits of suppliers by global buyers and brands have failed to accurately identify and meaningfully address these types of human rights violations; and workers themselves have been unable to access information and holistic support to rise out of these inhumane and unacceptable conditions.

The response

Established in 2014, the Issara Institute is tackling human trafficking and forced labor in Southeast Asia through a two-pronged approach of bottom-up worker empowerment and top-down improvement of the management systems that administer global supply chains.

Since January 2016, after a two-year pilot program that engaged 10 private sector partners and focused on the seafood industry, Issara has been working with an increasing number of global brands and retailers to “eliminate trafficking risks in their supply chains” and transform private sector approaches in tackling this pervasive issue.

The Issara model – called the Strategic Partners Program and using the organization’s Inclusive Labor Monitoring method – currently involves 17 global brands, retailers and importers from the United States and Europe, including Marks & Spencer, Mars Petcare, Nestlé, Tesco and Walmart. Several of Issara’s strategic partners are also involved in other forced labor initiatives, such as the Responsible Labor Initiative, the Seafood Task Force, and the Leadership Group on Responsible Recruitment.

The program’s scope has now expanded beyond seafood to include apparel, footwear, fruits, vegetables, spices, sauces and poultry export supply chains across Myanmar, Cambodia, Laos and Thailand.

Key aspects of the initiative

Issara’s unique Inclusive Labor Monitoring method involves the following components and corresponding data to date: 

1. Continuous and widespread monitoring of partner supply chains via Issara’s toll-free, multilingual, 24-hour migrant worker hotline and various social media platforms; staff visits to migrant communities; workplace assessments that involve site surveys, document reviews, and interviews with workers and management; and port risk assessments.
   
   According to Issara:

• More than 100,000 workers are covered by the Inclusive Labor Monitoring program.
  
• The program assesses and engages over 500 Thai supplier company workplaces, including companies across all tiers of partners’ supply chains and covering upstream farms, plants and fishing vessels.
  
• Community outreach – carried out by Issara’s grassroots civil society organization partners and by ambassadors who are returned migrants aiming to help jobseekers migrate more successfully – has reached more than 25,000 workers directly in source areas.
  
• Between 1,000 and 1,500 calls and conversations per month take place with workers via Issara’s various worker voice channels, including the multilingual hotline, Facebook, the Issara Golden Dreams Android app (detailed below), and other social media and chat/messaging platforms.

“If you want to drive sustainable change for victims of forced labor, you have to go beyond a raid-and-rescue approach or strengthening rule of law, which is an extremely slow process that leaves workers stuck in shelters in the meantime and often receiving little to no pay or remediation in the end. You need a collaborative approach, one that genuinely works with suppliers in partnership with global brands.

The Issara model works at the ground level to understand the situation at the factory level so that we can be well-equipped to provide a safe channel for worker voices to be heard, both before improvement plans are in place and while they are carried out. We then have a responsibility to support remediation when issues arise, all the while safeguarding the information that’s being shared.”

– MARK TAYLOR, ISSARA INSTITUTE

2. Data analytics and development of empowering worker-centric technology to uncover risks and impacts in complex supply chains, many of which are not captured by traditional social audits.
   
   This aspect of the program’s work allows partners to “better understand trends and patterns in migration, gain insight into hot spots for trafficking, understand supply chain risks, and develop strategic solutions to addressing forced labour in supply chains.”From running the hotline for many years, Issara recognizes that the knowledge held by migrant workers themselves often vastly exceeds, in quality and quantity, a lot of what NGOs and workers’ rights groups are tapped into. As such, Issara is motivated to create platforms for migrant workers and jobseekers to exchange up-to-date, accurate information relevant to safe job seeking and migration. Thus, the primary goal of Issara’s worker voice platforms is worker empowerment and strengthening linkages to remediation. At the same time, the value of this safely sourced worker feedback for corporate due diligence and worker-driven corporate responsibility is clear.
   
   According to Issara:

• More than 900 workers were involved in the creation of the program’s mobile app (called Golden Dreams), which provides information on worker rights, policies and laws related to migrant workers; updated lists and reviews of employers, recruitment agencies and service providers such as hospitals and NGOs; polling platforms to allow migrant workers to voice their opinions and view those of others; and a secure mechanism to report a problem or seek immediate assistance from the Issara team.
  
• Over 90,000 migrant workers and jobseekers are regularly interfacing with and exchanging through Issara worker voice channels.

“One thing we often hear from the companies we work with is how daunting it can be to know what’s happening across complex supply chains. But the situation is changing rapidly in our modern world. The majority of workers in Southeast Asia have access to smartphones and use these technologies in their daily lives.

If you can creatively tap into these advancements to talk to workers – ensuring privacy and the support of remedy along the way – then you can start to unlock information that traditional approaches such as audits haven’t captured. And having that information empowers companies and other actors along supply chains to respond in ways that are more systemic and that have real impacts in the lives of workers and their families.”

Mark Taylor, Issara Institute

3. Development and implementation – in direct collaboration with suppliers – of improvement plans that make changes in labor recruitment and management systems and that are based on direct engagement with workers.
   
   According to Issara:

• Corrective actions and collaborations undertaken by suppliers, in partnership with Issara technical teams, have positively impacted over 25,000 workers.
  
• Corrective actions and collaborations have included corrections in illegally low wages; excessive deductions; inappropriate treatment by line supervisors or human resources staff; document withholding; lack of contracts; unsafe dormitories; sexual harassment; and weak, unsafe or non-functional grievance mechanisms. 

4. Remediation for victims via a Victim Support Fund and the organization’s Freedom of Choice program, which is the first remediation program in the world to provide unconditional cash transfers to victims of trafficking, often coupled with safe job placement through Issara partner businesses, empowering survivors to stabilize and make their own decisions in overcoming forced labor.
   
   According to Issara:

• Over 6,000 workers identified as being in forced labor situations received forms of remedy through healthcare, legal assistance, safe relocation, employment, psychosocial care and assistance obtaining documentation.
• The Victim Support Fund supported more than 500 victims of trafficking, including their children who were also in the trafficking/harm environment.
• Over 200 victims received unconditional cash transfers through the Freedom of Choice program.

5. Production of bi-annual risk reports for the companies involved, providing each partner with an overview of issues identified in its supply chain and actions that have been taken in response.
   
6. Multi-stakeholder working groups and the production of cutting-edge research and analysis that provide platforms for discussion on key topics in ethical sourcing, such as ethical recruitment systems, mainstreaming worker voices into global responsible sourcing systems, technology solutions to human trafficking, the intersections of seafood sustainability and labor, and jobseeker and migrant worker empowerment.

Living Wages

The provision of living wages for workers in global value chains could contribute to supporting entire families and communities in surfacing from conditions of poverty, fueling the economic and social development called for by both public and private actors in their endorsement of the SDGs.

Every day, workers head to factories, fields, mines, warehouses and other job sites across the world. There, they put in a full day’s work, contributing their time and labor to ensure the smooth running and expansion of businesses and, in many cases, the development of national economies as well.

More than 340 million workers are currently living with their families on less than US $1.90 per person per day.

Yet, despite this contribution, day in and day out, many of these workers go home at the end of their long work days and still struggle to meet their basic needs and those of their families. Minimum wage laws in their countries may be weak or unenforced. The wages and any in-kind earnings they do receive are simply not enough to cover essentials such as nutritious food, clean water, sanitary housing, affordable health care, and opportunities for education.

The private sector’s role in these workers’ lives is immense. Wage-setting by employers – which in turn is regulated by governments and often influenced by the purchasing practices of those employers’ business partners – directly impacts the ability of these workers to live lives of dignity, through which their most basic rights as human beings are met.

Given this role, companies across sectors and geographies are asking, “What exactly is a living wage?” and “How can the provision of living wages be realistically achieved?”

In general terms, a living wage is the minimum income necessary for a worker and their family to meet basic needs, including some discretionary income. In many cases, a living wage is considered to be higher than the minimum wage set by national laws.

What this looks like in practice is very likely to vary across contexts and even within countries. But, as the case studies below aim to demonstrate, there are credible processes out there that are starting to set and implement living wages in real ways.

The provision of living wages for workers in global value chains could contribute to supporting entire families and communities in surfacing from conditions of poverty, fueling the economic and social development called for by both public and private actors in their endorsement of the SDGs.

Among others, the human rights to freedom of association, collective bargaining and non-discrimination are key drivers in supporting the provision of a living wage, which in turn can contribute to the fulfillment of the human rights to food, water, health, adequate housing, education, family life, fair working hours and so on.

As illustrated in the graphic above, and depending on the specifics of the relevant corporate initiative, the provision of a living wage may contribute to the achievement of an array of Global Goals, including:

• Goal 1: End poverty in all its forms everywhere[i]
• Goal 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture[ii]
• Goal 3: Ensure healthy lives and promote well-being for all at all ages[iii]
• Goal 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all[iv]
• Goal 5: Achieve gender equality and empower all women and girls[v]
• Goal 6: Ensure availability and sustainable management of water and sanitation for all[vi]
• Goal 7: Ensure access to affordable, reliable, sustainable and modern energy for all[vii]
• Goal 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all[viii]
• Goal 10: Reduce inequality within and among countries[ix]
• Goal 11: Make cities and human settlements inclusive, safe, resilient and sustainable[x]
• Goal 13: Take urgent action to combat climate change and its impacts[xi]

More than 450 million people work in global supply chain-related jobs. When combined with these workers’ families, the number of individuals directly affected by wage-setting in global value chains rises to 2 billion.

So, how are companies currently demonstrating respect for human rights and supporting a world in which these goals can become a reality – a world in which workers earn living wages such that they and their families are meeting their basic needs?

 Examples illustrated by the case studies below include:

• An individual brand is developing and implementing cross-cutting strategies: A global apparel company is enhancing wage management systems at the factory level and pro-worker engagement with governments and suppliers alongside its participation in collaborative initiatives.
  
• A manufacturer is proactively engaging its buyers: A textile producer in Turkey is working in partnership with its buyers to support living wages in specific production units until broader changes are made at the national level.

• Brands and trade unions are collaborating at the global level: A coalition of textile and garment brands are banding together with global and local trade unions to support industry-wide collective bargaining between workers and their employers to establish legally enforceable requirements at the country level, taking wages and working conditions out of industry competition.
  
• Local value chain actors and other stakeholders are collaborating at the national level: Key actors in the Malawi tea supply chain are joining forces to tackle the root causes of endemic poverty among Malawian tea workers, paying particular attention to impacts on women both on tea estates and on smallholder farms.

These case studies explore each of these innovative and evolving models in more detail. Each case study captures publicly available information on the initiative, alongside experiences and opinions from various actors involved.

The following summaries do not claim to give a definitive account of a specific initiative or of all perspectives on that case study; instead, they are intended to serve as illustrative examples of how action toward corporate respect for human rights can make a critical contribution to the achievement of various goals and targets under the SDGs.

Key Takeaways on Living Wages:

Individual Company Action

Individual Company Action

1. The human rights to freedom of association and collective bargaining play central roles in company action on living wages.
2. Mature industrial relations are key in figuring out what a living wage means in a particular context and in generating feedback loops that help maintain the provision of living wages over time.
3. Improved wage management systems and more comprehensive strategies for promoting fair wages can address many elements that influence whether a living wage is provided in the long-term. Such elements include timeliness of payments; fair working hours; pay adjustments based on skills, experience levels and performance; and open communication channels between workers and management.
4. Collaborative initiatives that drive systemic change at both industry and government levels can greatly inform and enhance individual company action on living wages.
5. Producer-buyer partnerships are possible and can facilitate direct involvement from workers in determining living wages in specific work sites, thereby having a real impact on the lives of workers and their families via the provision of a living wage while collaborative initiatives with a larger scale are built at a national level.

Collective Action

Collective Action

1. Industry-wide, collaborative action across each step in the supply chain builds leverage (the ability to influence another party to prevent, mitigate and/or remediate a human rights harm) at the national level to help make living wages a reality for workers, regardless of which brands their employers supply.
2. Collective bargaining across an industry bolsters meaningful stakeholder engagement between employer associations and trade unions, as well as between suppliers and buyers, while also facilitating access to remedy when commitments are not met.
3. The re-examination of key aspects of the core business, including product quality investment and purchasing practices, can clarify the contribution of global brands to systemic labor rights issues and inform holistic responses.
4. The identification of particularly vulnerable stakeholders helps companies focus their efforts on the most salient human rights issues associated with their business.
5. Recognizing that living wages cannot be tackled in isolation inspires multi-faceted approaches that use a confluence of different incentives to drive change from many angles.

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H&M’s Fair Living Wage Strategy

The challenge

Over 1.6 million people work in the factories that supply H&M apparel, 65% of whom are women.

There is thus little question about the scale at which this global apparel brand has the ability to contribute to sustainable development by supporting the provision of living wages to workers in their supply chain.

The response

Acknowledging the substantial number of individuals involved in its global supply chain, H&M has identified and prioritized living wages as one of its salient human rights issues – defined as the human rights at risk of the most severe negative impacts through the company’s activities and business relationships.

“We developed our global Fair Living Wage Strategy in 2013 with guidance from multiple experts, trade-unions and NGOs. The strategy focuses on governments, factory owners, our own purchasing practices and most crucially, workers. The strategy is both interlinked with and dependent on well-functioning industrial relations, including collective bargaining. Therefore, it is crucial for all parties involved to work together for the strategy to really come to life.”

– THE H&M GROUP SUSTAINABILITY REPORT 2017

At the center of the company’s work on this issue is H&M’s Fair Living Wage Strategy. Launched in 2013, it is the first comprehensive wage strategy undertaken individually by a global brand.

In implementing the strategy, the company defines a living wage as “a wage which satisfies the basic needs of employees and their families and provides some discretionary income such as savings. It should be revised annually, and negotiated with democratically elected worker representatives.”

Key aspects of the initiative

H&M’s Fair Living Wage Strategy, which the company has refined since its launch in 2013 based on its stakeholder engagement and involvement in various collaborative initiatives, has four main components and respective results so far:

1. Workplace dialogue and industrial relations programs to facilitate positive communication and negotiation on wage increases and other working conditions between (a) employers and employees at the factory level and (b) employer associations and trade unions at the national level.

These programs support the establishment of democratically elected worker representation at strategic suppliers, which can lead to the establishment of trade unions if the employees so choose. 

The programs also include training at the factory level on workplace cooperation, negotiation skills, collective bargaining and labor law. The global union federation IndustriALL, the Swedish trade union IF Metall, the International Labour Organization (ILO), and the Swedish development agency Sida are key partners in several of these programs.

According to H&M:

• By the end of 2017, 458 factories were enrolled in the company’s workplace dialogue and industrial relations programs, representing 52% of H&M’s total product volume. In 2018, an additional 223 factories are enrolling in these programs.
  
• More than 600,000 factory workers are directly covered by democratically elected worker representation through these programs.
  
• The programs are currently run in Bangladesh, Cambodia, China, Ethiopia, India, Indonesia, Myanmar and Turkey.
  
•  In 2017, democratically elected worker representation was in place at suppliers representing 52% of the company’s product volume.

“At H&M group, we believe that well-functioning industrial relations are crucial to the creation of fair jobs. Good relationships between workers and management and effective interactions and negotiations on factory, industry and country level, promote good working conditions and better wages. Good labour relations also support stability and performance in our production markets.”

THE H&M GROUP SUSTAINABILITY REPORT 2017

2. Fair Wage Method to ensure that wage-setting takes the individual worker’s skills, experience, performance, and responsibility into full consideration.

The Fair Wage Method, developed by the Fair Wage Network and based on twelve dimensions, supports the creation of holistic pay structures that enable and sustain fair living wages and facilitate improved dialogue between employers and employees at the factory level.

Distinct from an audit approach, the Fair Wage Method focuses on partnerships with factories, stores, and brands to assess wage practices through worker and management surveys, identify root causes, and implement improvements, including within Human Resources policies and practices.

According to H&M:

• Systems taking the Fair Wage Method into consideration are being implemented at an increasing number of factories: 140 at the end of 2016 (representing 29% of H&M’s total product volume), 228 at the end of 2017 (representing 40% of H&M’s total product volume), and a total of 336 by the end of 2018, superseding H&M’s goal of 50% of the total product volume by the end of 2018.
  
• Implementation of the Fair Wage Method takes place in Vietnam, China, Cambodia, Bangladesh, Turkey, Myanmar, India, and Indonesia.
• Approximately 200 factories will also be enrolled in the Wage Management System Program internally developed by H&M.
  
• Implementation of the Wage Management System Program takes place in Bangladesh, Turkey, Ethiopia, Pakistan, India, Indonesia, China, and Cambodia.

3. Strategic collaborations in recognition that H&M shares its suppliers with many other brands, meaning that living wages are an industry-wide challenge that must be tackled in partnership with others.

Here, H&M’s membership in the ACT (Action, Collaboration, Transformation) initiative plays a key role in the company’s strategy, as the company is one of the founding members of the initiative (see the ACT case study).

This collaborative work is further complemented by the now-permanent Global Framework Agreement between H&M, IndustriALL and the Swedish trade union IF Metall.

This agreement is already demonstrating its value and has facilitated conflict resolution between workers and management within H&M’s supply chains. Implementation of the agreement has been mainly channeled through the National Monitoring Committees (NMCs) that consist of representatives from local trade unions and H&M. In Myanmar, where a month-long strike took place after eight union leaders were fired in October 2015, the agreement was “key to getting trade unionists back to work, as well as achieving trade union recognition at the Jiale Fashion factory in Yangon.” In Pakistan, the agreement was invoked to bring together IndustriALL Pakistani affiliate NTUF and local management of the Denim Clothing Company factory for joint negotiations, which resulted in the reinstatement of 88 workers after they had been fired for demanding better working conditions at the factory.

Moreover, the company continues its collaboration projects with Sida, ILO, and IF Metall to train management and workers on workplace cooperation and dispute resolution.

4. Government engagement in recognition of H&M’s influence and access to the governments in the countries where the company’s products are made.

For example, since 2014, the company joined peer companies to advocate for the Cambodian government’s Trade Union Law and its compliance with ILO conventions. According to H&M, this influence and access relies on the fact that the company’s presence in all of its sourcing markets includes an H&M office and a sustainability team.

“The government engagement aspect of H&M’s work is key. Governments must install an enabling legislative environment for labor rights, one that creates a better balance of power and supports collective bargaining between social partners. In particular, governments must secure implementation of international labor standards when it comes to trade union rights – the right to organize and the right to collective bargaining. Employers must be required to adhere to these standards; and in that sense, buyers can do much more to engage governments and stress adherence to these rights by their suppliers.

In the end, sustainable industrial relations can only be achieved by workers organizing themselves in democratic, independent trade unions at the factory or company level and at the national level. This requires action from governments, but it also requires education. Workers need to know their own rights and have channels for claiming them. Management must understand workers’ rights and put systems in place that foster better industrial relations and social dialogue. And brands must support their suppliers in improving working conditions. Training all actors on these issues across the supply chain, as H&M is doing in partnership with us and others, is incredibly important.”

– MATS SVENSSON, IF METALL

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Egedeniz Textile’s Living Wage Project

Driving the provision of a living wage from the producer perspective

The challenge

The majority of initiatives around living wages tend to be spearheaded by multinational brands in response to international or national pressure, with producers and manufacturers subsequently affected by such initiatives and occasionally brought in as partners as collaborations unfold.

While there is widespread agreement that cross-industry, collaborative efforts are necessary for systemic change when it comes to living wages, it is also important to highlight opportunities for producers to jointly lead initiatives around this issue, as such efforts can be deeply transformative in enhancing the lives of workers and their families.

The response

One such example of a producer-buyer partnership is the Living Wage Project of Egedeniz Textile, the first certified organic textile company in Turkey and a medium-sized producer supplying to brands in the United States, Japan and Western Europe.

In partnership with Swedish children’s wear brand Mini Rodini and the Fair Wear Foundation, Egedeniz launched the Living Wage Project in June 2016 after deciding as an employer to prioritize the provision of a living wage to its workers.

Key aspects of the initiative

In the first two years of the Living Wage project, Egedeniz has:

1. Carried out a cost of living survey with its workers across three wage groups and cross-referenced the results with government data and analysis, with support from the Fair Wear Foundation.
2. Engaged with its buyer Mini Rodini on the survey findings, working with the brand to calculate an initial premium (an additional €0.18 per garment) that resulted in an average 14% wage increase on the lowest monthly salary among the three wage groups covered by the survey.

“The most important part of this project has been the relationships between all the steps in the supply chain. From the brand side, supplier relations are increasing positively. From the supplier side, it’s really important to believe in your role in the partnership with a buyer. If your working conditions will change simply based on the brand, then there are risks of huge negative impacts for the workers. You need to believe in and own your role in the sustainability of the business and in the partnerships involved.”

Mümin Can Eker, Egedeniz Textile

3. Facilitated dialogues and awareness-raising across the three wage groups to ensure understanding of the program and how the wage increases are set.
   
4. Began approaching additional buyers to join the program in an effort to enhance the sustainability of the project over time.
   
5. Conducted an initial evaluation survey among its employees, assessing workers’ knowledge about the Living Wage Project, their experiences throughout the implementation of the project, how they are using the additional wages, and what their general opinions are concerning the initiative. Overall feedback to date has been positive, reflecting workers’ clear understanding of how the initiative is carried out and demonstrating positive impacts in terms of the ability of workers to meet their and their families’ basic needs.

“You can see the change in the eyes of workers when you walk through the sewing line. We’re stopped and the workers say thanks. It can be seen as such a small payment, but it’s such an important thing to these workers. It’s increased their loyalty and motivation – they feel like a valued part of the business and we’re seeing clear improvements in the quality of the work and worker recruitment and retention. We’re also hearing positive feedback from worker representatives and we can see the relationship-building directly on the production line.”

– OZGU CUBUKCUOGLU, EGEDENIZ TEXTILE

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ACT Initiative

Tackling systemic worker issues through industry collective bargaining

“The ACT initiative is an example of how companies have been working together with trade unions, governments, and others to address some of the most severe and systemic labor rights abuses in their supply chains. It illustrates the promise of collective action to leverage change.Importantly, initiatives like ACT are not just about voluntary philanthropic contributions to development, but also the product of a recognized responsibility of companies to address severe human rights risks in their supply chains. In meeting this responsibility, ACT makes a critical contribution to sustainable development as well.”

Professor John Ruggie, former UN Special Representative on Business and Human Rights

The challenge

April 2013: The Rana Plaza factory collapse shook the world and the business community along with it. For the textile and apparel industry in particular, the deadliest garment factory accident in history – totaling 1,134 individuals killed and approximately 2,500 injured – crystallized awareness about continued failings in both government and business oversight of supply chain conditions and the potentially devastating human cost of those shortcomings. The Bangladesh Accord was thus born, creating the first legally binding agreement between global brands and trade unions to ensure safe working conditions in the Bangladeshi ready-made garment industry.

For many apparel and textile brands, engagement in the Bangladesh Accord became an important first exposure to the necessity and power of collective, industry-wide action in the face of a pervasive supply chain issue. Due in part to this experience and a drive to examine other working conditions alongside health and safety issues, several leading brands came together to face another systemic issue in their supply chains – the lack of a living wage in garment factories and the severe impacts that this has on workers, their families and their communities.

“We can’t talk about ACT without talking about the Bangladesh Accord. Many of the relationships we have with the brands now involved in ACT were forged through the Accord context.

There has to be a willingness to work together, but also to jointly commit to a common set of rules and systems that work. And, in all of my engagements on ACT, across all of the relevant actors, not one person has said, ‘That won’t work.’ This is extraordinary. And it’s because we’re providing a logical framework that will be built out in each country by the unions and employers standing together on their common interest platform and taking wages and working conditions out of industry competition. This is the only path toward systemic, sustainable change in this industry on this issue.”

– JENNY HOLDCROFT, IndustriALL

Even before the Rana Plaza tragedy, however, various brands had built foundational relationships with trade unions through global framework agreements that are now feeding into collective, industry action in this area. These agreements, which are “negotiated at a global level between trade unions and a multinational company,” put in place standards across a company’s operations and business relationships and can be enforced regardless of whether those standards are in place and upheld in an individual country.

“An important benefit of the ACT initiative is that it is an opportunity to reinforce and build on what we are already doing around living wages within the Global Framework Agreement with IndustriALL Global Union, which Inditex signed in 2007 and which plays a priority role in our sustainability strategy. ACT is focused on building more positive relationships between brands and suppliers and between suppliers and workers through enforcement of collective bargaining in the industry. And it is increasing internal awareness within Inditex on our living wage efforts. The more brands that join this effort, the more powerful the impact will be.”

– FÉLIX POZA PEÑA, INDITEX

The response

The ACT (Action, Collaboration, Transformation) initiative, which formally launched in 2015, is an agreement between international brands and retailers and trade unions to “transform the garment and textile industry and achieve living wages for workers through industry-wide collective bargaining linked to purchasing practices.”

The initiative centers on a memorandum of understanding between the global union IndustriALL and 17 global brands and retailers (including ASOS, C&A, H&M, Inditex, Kmart, Next, Primark, Target, Tchibo, Tesco and others). It is led by a 50% union, 50% brand board and a full-time secretariat.

“There’s no playing to the galleries on this. With living wages, there’s an astounding opportunity to improve lives. But, before ACT, there was never any means of dealing with the issue in any effective way. After the Bangladesh Accord, we built on the relationships with IndustriALL and other brands that were strengthened as part of that effort to tackle living wages.

How many environments are there where you have brands, retailers, manufacturers, governments, trade unions and employer associations all at the same table? This is real innovation.”

Christopher Grayer, Next

Key aspects of the initiative

Putting freedom of association and collective bargaining at the center, the ACT model is comprised of three distinct but interrelated components:

1. Industry-wide collective bargaining between employers and unions of registered and legally enforceable agreements at the national level, such that “workers in the garment and textile industry within a country can negotiate their wages under the same conditions, regardless of the factory they work in and the retailers and brands they produce for.”
   
2. Purchasing practices of the member brands and retailers that ensure that “payment of the negotiated wage is supported and enabled by the terms of contracts” between global buyers and their suppliers.
   
3. Government engagement on national minimum wage fixing enforcement mechanisms, so that they provide “an adequately resourced regulatory, inspection, and legal system that ensures that no less than legal minimum wages are paid to workers” since “minimum wages play a vital role in underpinning living wages and must be set in accordance with this level and regularly reviewed in line with cost of living increases.”

In tackling each of these components, ACT is currently supporting capacity- and relationship-building among member brands’ supplier factories, IndustriALL’s affiliated unions and governments in target countries, as well as research on how purchasing practices can best facilitate payment of a living wage.

The initiative’s current countries of focus include Bangladesh, Cambodia, Myanmar, Turkey and Vietnam. It is working to bring additional brands on board to further increase its scope and influence and avoid competitive disadvantages.

“This is a groundbreaking program. We’re organizing ourselves in a way that we never had before. Yes, this takes time, but it is the only way to tackle systemic, structural challenges.

Importantly, we’re connecting this back to our own human rights due diligence at the same time. If we want to secure our future as a business enterprise, we can’t cherry pick what we want to work on, including when it comes to the SDGs. We need to thoroughly look at both our positive and negative impacts on people and then take action, collectively and independently, from there.”

– ACHIM LOHRIE, TCHIBO

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Malawi Tea 2020

Joining forces at a national level to address root causes of endemic poverty

The challenge

Malawi, East Africa: A young child is nestled on her mother’s back, wrapped snuggly in a chitenje and napping soundly as her mother moves up and down seemingly endless rows of tea plants, picking the vibrant green leaves with expert efficiency and filling basket after basket before the sun goes down on another full day of work in the fields.

Based on Malawi’s malnutrition rate of approximately 50%, the chances are high that this child’s growing body will become stunted physically and in other developmental areas, notwithstanding her mother’s wages and in-kind earnings as a worker in the Malawian tea industry.

As international non-governmental organization (NGO) campaigns have highlighted since the early 2000s, wages remain low in the Malawian tea business despite it being the largest formal employer in all of Malawi. Approximately 62% of Malawians live below the World Bank’s extreme poverty line of US$1.25 per day; approximately 50,000 tea plantation workers were documented in 2013 as being trapped in conditions of extreme poverty. Research commissioned to calculate what a living wage would be in the Malawian tea industry concluded that wages and in-kind benefits would need to double to achieve a living wage.

The response

In 2015, 20 different groups along the Malawian tea chain got together and agreed that more had to be done to tackle the serious issue of worker wages in their industry. The resulting Malawi Tea 2020 Revitalisation Programme (Malawi Tea 2020) is a coalition of Malawian tea producers, the largest international tea buyers, NGOs, relevant certification organizations, and donors. 

The initiative is aiming to “create a competitive Malawian tea industry where workers earn a living wage and smallholders are thriving.” The partnership is endorsed by the Malawian government and involves companies of a range of sizes. All participating tea producers are part of the program through the Tea Association of Malawi (TAML).

The Ethical Tea Partnership (ETP), TAML, Oxfam, IDH (the Sustainable Trade Initiative), and GIZ (the German Agency for International Cooperation) jointly lead the initiative, which is the first of its kind in the tea industry.

“None of this would have happened without the burning platform from NGOs and other campaigns. But once that has happened, you must then have shared knowledge about what the problem is; and then shared commitment across brands, producers, workers and governments to practical approaches that will have a real impact.”

Rachel Wilshaw, Oxfam

Key aspects of the initiative

Recognizing that living wages cannot be tackled in isolation but must instead be addressed using a multifaceted approach, Malawi Tea 2020’s five-pronged initiative and respective results to date include: 

1. Improved productivity and quality of Malawian tea to generate a more profitable and competitive industry that is able to support the payment of living wages to its workers.
   
   • Outreach to financiers and donors to revitalize the industry through irrigation, replanting and factory refurbishments has resulted in two ongoing deals at an estimated US$3 million.
     
     Each deal involves a tea estate undergoing irrigation feasibility studies and environmental and social impact assessments, with support from IDH and other investors, to boost volume and quality production while mitigating negative social and environmental impacts such as climate change. 
     
   •  Tea estates themselves have invested US$6.3 million into revitalization projects, including those around agricultural improvements, infrastructure and electricity generation.
2. Improved conditions for women workers via housing and nutrition improvement programs, as well as efforts to achieve better human resources management.
   • Via a new nutrition program, 30,000 workers (out of a target of 50,000) now receive fortified lunchtime meals and all workers receive weekly vegetable distributions.
     
   • TAML has adopted a new policy to address sexual harassment and gender-based discrimination, four estates have established gender committees, and gender training sessions for supervisors, managers and workers began in September 2017.
3. Improved opportunities for smallholders to earn a living income via Farmer Field School methodologies, business management programs, and agro-inputs.
   
   • A living income study has established a living income benchmark for smallholder farmers (MWK2,889 or US$15.04 in PPP – purchasing power parity), as set against current smallholder incomes (MWK1,574 or US$8.16 PPP).
     
   • 3,300 smallholder farmers (65% women) have improved their farming and business skills.
     
   • 50 Farmer Field Schools have trained 1,548 farmers, resulting in the improvement of field-level practices. For instance, 540,000 tea plants are being cultivated in 45 mini tea nurseries and 3,138 farmers are participating in a total of 173 village savings and loan groups across Malawi.
4. Improved wage-setting process that centers around collective bargaining between worker representatives and employer organizations.
   
   • TAML and the Plantation and Agriculture Workers Union (PAWU) igned the first ever collective bargaining agreement (CBA) in the tea sector.
     
   • Wages have gone up several times since the initiative started in 2015, narrowing the gap between the TAML base wage and living wage from 28% achievement of the living wage to 41%.
     
   • Training of 337 managers in 2017 on the CBA and wage sensitization sessions with 5,500 workers, have been carried out.
5. Improved environmental efficiency and more sustainable energy use in tea-growing areas.
   • As of September 2017, 7 factories had started collecting primary data on their energy efficiency.
     
   • In June 2017, key stakeholders took part in a training on climate change impact mapping.
     
   • 10 tree nurseries have been established and 6 cook stove production groups with 125 members have been established alongside the training of 140 sales agents.

“Malawi Tea 2020 is tackling the issue of extreme poverty in the Malawi tea workforce from a holistic approach. It’s looking at innovation and investment in the industry; it’s seriously examining what a living wage is in this context and how buyers’ procurement practices must change to meet that; it’s empowering smallholders and recognizing their important role in all this; it’s linking to the sector’s environmental efficiency and sustainability; and it’s bringing a gender lens to all it does.”

Sarah Roberts, Ethical Tea Partnership

In addition, a key highlight of the program has been its ongoing work around sustainable procurement practices. In building out this area, the initiative commissioned Accenture Development Partnerships to develop a methodology to calculate the “additional cost of paying workers a living wage and for this cost to be fairly shared across the tea value chain.” Consultations on the proposed model are currently underway. At the same time, the initiative is seeking additional brands and traders to expand the program to cover 100% of the Malawian tea industry.

“Working on living wages in the context of Malawi Tea 2020 isn’t just about paying workers more. It’s about taking a holistic approach that breaks down what we’re really trying to achieve and coming up with various programs and targets that realistically support the development of a sustainable tea industry in Malawi.

Scale and traction are needed to effect real change when tackling these complex issues. For some companies, it might initially feel uncomfortable to engage with your competitors in this way, but you can and should work through that in order to use your collective influence to drive positive impacts that just won’t happen without collaboration across the industry.
Also, all of the different actors involved in an initiative like Malawi Tea 2020 will have different perspectives; and that’s ok.

It’s when no issues are arising that you have to worry, since this likely means that people aren’t speaking up. Having uncomfortable conversations about what works and what doesn’t work is an important part of the process and companies should be flexible and adapt their approaches based on what they learn along the way from the network of knowledge and various areas of expertise that should be involved.”

– KATY TUBB, TATA GLOBAL BEVERAGE