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Embedding the Corporate Responsibility to Respect Human Rights Within Company Culture

Summary

A company’s ability to carry out human rights due diligence depends on the extent to which respect for human rights is embedded in company culture. Company personnel should be:

  • aware of the human rights risks related to their functional responsibilities;
  • empowered and incentivized to conduct their work in a manner that respects human rights.

The challenge of embedding new values within company culture is not exclusive to human rights. The field of change management and environmental, health, and safety management processes both seek to transform corporate cultures that are insufficiently responsive to issues that inhibit improved business performance.

Based on twelve interviews with company representatives and corporate sustainability advisors spanning four continents, this study identifies four common gaps in progress towards embedding respect for human rights in corporate culture:

  1. Abstract language used to frame human rights: Although the International Bill of Human Rights and the ILO’s Declaration on Fundamental Principles and Rights at Work enumerate internationally recognized human rights and can be an important reference point for corporate-level policies, personnel’s national and professional cultures shape their understanding of how human rights relate to their business activities. If human rights issues are not described in a manner that is consistent with their national and professional background, people fail to appreciate the scope of applicable human rights and the scale of individuals and communities that can be affected by their work. Consequently, corporate-level commitments will not be incorporated into operational practices.
  2. Excessive “happy talk”: Companies publicize their positive human rights performance and community leadership internally. Yet, employees are only exposed to potential and actual human rights impacts through such happy talk. The geographic distance of desk-based staff from vulnerable individuals and the narrow functional responsibilities of operational-level staff prevent adequate recognition of the human rights risks linked to their professional conduct. Without explicit guidance, training, or incentives to consider the connection between business practices and human rights, internal happy talk fosters a culture of complacency regarding human rights risks.
  3. Delegating ownership of impacts to those who can’t fix them directly: While human rights specialists are needed to provide expertise, the responsibility for human rights compliance is rarely shared between specialists and the appropriate functions or business units. The dependence of both business unit managers and operational-level staff on such specialists separates the responsibility for exercising due diligence from the actual function or business unit associated with the risk. When this responsibility is delegated almost entirely to specialists, the effectiveness of human rights due diligence processes depends on their ability to convince business functions to modify their conduct. Yet, they often lack the necessary seniority and influence internally to do so.
  4. Toothless cross-functional committees: Cross-functional working groups are intended to facilitate the coordinated implementation of human rights commitments but several company representatives reported no involvement by business unit management. The participation of business units provides such committees with the influence, credibility, and expertise needed to change operational-level conduct.

An in-depth analysis of change management literature, and environmental, health, and safety consultancy guidelines reveals processes that have been successful in promoting the shared ownership of other forms of due diligence. Companies can apply the following five lessons on embedding to more effectively exercise human rights due diligence:

  1. Consistently communicate human rights in accessible terms.
  2. “Seeing is believing”: expose relevant personnel to the realities of the company’s impact on human rights, and its management of those impacts.
  3. Tailor guidance on human rights risk management for specific functions, to make human rights risk management more tangible and actionable on a day-to-day basis.
  4. Develop leading human rights indicators: Leading indicators focus peoples’ attention on the consequences of their own decisions and practices.
  5. Create broad-based performance evaluation criteria for exercising due diligence: Peoples’ sense of professional responsibility is reinforced by explicit incentive and accountability measures.

These lessons demonstrate that the successful embedding of human rights occurs neither unintentionally nor as the result of a single incident. Rather, embedding involves a deliberate set of processes that incrementally foster a company culture that respects human rights.

Corporate-Community Dialogue: Documentary Series

Corporate-Community Dialogue: An Introduction from ACCESS Facility on Vimeo.

About the Series

This documentary series looks at how companies and communities have resolved disputes over corporate activities on three specific projects in Nigeria, Peru and the Philippines. The series includes one overview film of all the stories, and one film per story. These films tell the story of what happened on the ground in the words of the people who experienced it – the local community, the company and the dialogue facilitators that were asked to help.

In all three films, we hear stories from companies and communities that have found themselves in varying degrees of conflict and looked for a way out through dialogue. In each instance, the parties in conflict used a neutral third-party mediator to help them craft a process through which they could address concerns and progressively resolve their core conflicts.

Each film is about 40 minutes and they are hosted by ACCESS Facility. The individual films share the following stories:

Company-Community Dialogue: An Introduction: provides an overview of all three stories and finds common themes. Click embedded video above or follow this link to view directly on Vimeo.

Making Monkey Business: Building Company/Community Dialogue in the Philippines shares the story of a dispute resolution process with communities that were impacted by the building of the Ambuklao and Binga hydroelectric power plants in the Benguet Province of the Philippines. The mediated dialogue was facilitated by the Compliance Advisor/Ombudsmanof the World Bank Group and the mediation was conducted by the Conflict Resolution Group in the Philippines. Click embedded video below or follow this link to view directly on Vimeo.

Putting Ourselves in their Shoes: The Dialogue Table of Tintaya tells of the rising resentments among indigenous community members about a copper mine in the Peruvian Andes initially owned by the government and then owned by BHP Billiton (and now by Glencore Xstrata). It relates the process by which non-governmental organizations such as Oxfam Australia, Oxfam America, CooperAccion and Corecami entered the picture, and the important roles they played in helping give birth to the process and supporting the communities’ ability to engage effectively. Click embedded video below or follow this link to view directly on Vimeo.

The Only Government We See: Building Company-Community Dialogue in Nigeria tells the story of the negotiation of General Memoranda of Understanding (GMOUs) between Chevron and communities in the Niger Delta around its facilities. The process began after violent conflict in the region in 2003 led to the withdrawal of the company and the destruction of property, including schools and hospitals the company had built for communities. The film relates the role played by the head of the New Nigeria Foundation, a local NGO that came in to mediate the dialogue and help build the foundations for increased trust between those involved and addresses how and why the communities decided to engage in the dialogue, what progress and challenges emerged along the way, and the outcomes that have been achieved. Click embedded video below or follow this link to view directly on Vimeo.

These films were produced by the Corporate Responsibility Initiative at the Harvard Kennedy School on behalf of the mandate of the former Special Representative of the UN Secretary-General for Business and Human Rights, Professor John Ruggie. The films were produced with the generous support of the Government of Norway, the Compliance Advisor/Ombudsman of the World Bank Group, the International Bar Association and the Government of Germany. The films are MATCH productions.

In November 2012 the series won “best communication or publication” award at the biennial Centre for Effective Dispute Resolutions awards ceremony held in London.

Advising the Fair Labor Association on Alignment With the Guiding Principles

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July 2012 | Publications

Implications of the Guiding Principles for the Fair Labor Association

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The Fair Labor Association is a nonprofit organization whose goal is to protect workers’ rights and improve working conditions worldwide. It is a multi-stakeholder initiative of universities, civil society organizations and socially responsible corporations that work to increase accountability and transparency from brands, manufacturers, factories and others involved in global supply chains, and to create lasting solutions to exploitative labor practices. Since its inception as the Apparel Industry Partnership and the development of its Workplaces Code of Conduct and Compliance Benchmarks, the FLA has developed a range of procedures and programs aimed at driving through positive change in supply chains. It has also expanded its membership base beyond the apparel and footwear industry to include companies in other sectors, such as agribusiness and electronics. 

In 2012, Shift helped the FLA assess the implications of the Guiding Principles for its work. The report prepared by Shift analyzed how the FLA’s standards, processes and programs align with the Guiding Principles, and suggested areas for future focus. Since this report was written, the FLA has made a number of changes to its standards and processes.

Shift also provided ad hoc advice to the internal FLA Working Group tasked with reviewing the organization’s Third Party Complaint mechanism.

Advising the Global Network Initiative on a Public Engagement Mechanism

The Global Network Initiative (GNI) is a multistakeholder group of companies, civil society organizations, investors and academics who have created a collaborative approach to protect and advance freedom of expression and privacy in the information and communication technologies (ICT) sector. GNI provides resources for ICT companies to help them address difficult issues related to freedom of expression and privacy, including a framework of principles and implementation guidance. | Also see guidance on implementing the Guiding Principles for ICT companies

As part of the GNI’s Governance Charter, the network has made a commitment to engage the public, in order to provide a platform to share information about GNI, receive feedback, and raise questions or concerns, with a view to strengthening the implementation of GNI’s mission. Shift supported the GNI in the development of this public engagement mechanism through a consultative process involving the different GNI constituent groups and select external experts. In light of these consultations, as well as its own research and expertise, Shift has provided GNI with a confidential report proposing design options for the public engagement mechanism, to inform its internal discussions and decision making.

European Commission Human Rights Sector Guides

“Respect for human rights is part of the recipe for modern business excellence. This guidance meets global standards agreed in the UN while leaving enterprises the necessary flexibility to adapt their approach to their own particular circumstances.”

Antonio Tajani, Vice-President of the European Commission, Enterprise and Industry

Human Rights Guides for Three Sectors

In June 2013, the European Commission issued three guides on implementing the Guiding Principles, tailored for specific industry sectors.

There are three guidance documents, one for each sector:

  • employment and recruitment agencies;
  • information and communication technologies (ICT) companies;
  • oil and gas companies

The guides are written by Shift and the Institute for Human Rights and Business.

> Jump to the guides

What the Guides Do

Each Guide offers practical advice on how to implement the corporate responsibility to respect human rights in day-to-day business operations in each industry through step-by-step guidance. At each step, they summarize what the Guiding Principles expect, offer a range of approaches and examples for how to put them into practice, and link users to additional resources that can support their work. They are intended to help companies “translate” respect for human rights into their own systems and cultures.

How the Guides Were Developed

The Guides were developed over 18 months by Shift and the Institute for Human Rights and Business through extensive research and multistakeholder consultation with representatives from the three industries as well as governments, trade unions, civil society, academia and other experts.

“Business is an increasingly important player in the world of human rights. This guidance aims to help enterprises in Europe and elsewhere to meet the corporate responsibility to respect human rights, as defined by the UN and strongly endorsed by the EU.”

Stavros Lambrinidis, EU Special Representative for Human Rights

Support for the Guides

Jim Baker, Council of Global Unions: “The UN Guiding Principles on Business and Human Rights were derived, on the one hand, from universal human rights standards and, on the other, from real world experience. Human rights, like life itself, cannot be reduced to a checklist or to simple slogans. It is only through understanding and reflection that the Guiding Principles can become ‘simple’ and applicable. These guidance publications are designed to further that process.”

Brent Wilton, International Organisation of Employers: “The three sector guides are comprehensive compendiums which contribute to helping companies in those sectors and beyond gain understanding of the scope of the UN Guiding Principles on Business and Human Rights.”

Alexandra Guáqueta, UN Working Group on business and human rights: “Dozens of sectoral guides and tools on how to implement the UN Guiding Principles are being produced. This is a solid indicator of the relevance and high demand for the Guiding Principles. Now users want to know whether the practical guides are actually aligned with the Guiding Principles. A best practice example of such alignment are the new EC Sectoral Guidelines. They capture the essence of the Guiding Principles faithfully, they refer to the interdependence of the state, corporate and remedy pillars, and were formulated after technical research, expert consultations and multi-stakeholder dialogue processes with state, business and civil society actors from across the globe. They will no doubt be a valuable source for practitioners and affected persons alike.”

Guidance for Companies on Respecting Children’s Right to Be Free From Child Labor

Jump to the guidance

“Participation in this project is very important to Vale, because it contributed directly to our process of continuous improvement in the management of human rights.”

Adolfo Gonçalves, Labour Relations Manager, Vale

The International Labour Organization’s (ILO) International Programme on the Elimination of Child Labour (IPEC) was created in 1992 with the overall goal of the progressive elimination of child labor, which was to be achieved through strengthening the capacity of countries to deal with the problem and promoting a worldwide movement to combat child labor. ILO-IPEC is the largest program of its kind globally and the biggest single operational program of the ILO.

Since its creation in 1920, the International Organisation of Employers (IOE) has been recognized as the only organization at the international level that represents the interests of business in the labor and social policy fields. Today, it consists of national employer organizations from over 140 countries from all over the world.

This joint project of ILO-IPEC and the IOE sought to develop a “Child Labor Guidance Tool” (2012 concept note) that would provide guidance on how companies can avoid child labor and contribute to child labor remediation, whether in their own operations or in their supply chains, through appropriate policies, due diligence and remediation processes that are aligned with ILO Conventions on child labor and the Guiding Principles.

“The ILO-IOE project on business and child labour has provided valuable, cross-functional learning for The Coca-Cola Company on this critical issue. We have benefited from the expert assessment process, which has led to improvements in our policies and due diligence systems.  TCCC would highly recommend this project to companies interested in developing effective systems to identify, prevent, mitigate, and, if necessary, remediate child labour, all while contributing to the creation of an authoritative global guidance tool.”

Ed Potter, [former] Director, Global Workplace Rights, The Coca-Cola Company

In the first stage, Shift developed a protocol and conducted assessments of an initial group of companies from diverse industry sectors, including AngloGold Ashanti, The Coca-Cola Company, Sterling Industries and Vale. The assessments explored alignment with the key elements of the corporate responsibility to respect in relation to the prohibition of child labor, generating important lessons for the project. In 2014, the project team consulted with other companies and expert stakeholders. In December 2015, guidance was published by the ILO and IOE, with support from Shift, to help companies do business with respect for children’s rights.

The Corporate Responsibility to Respect Human Rights: An Interpretive Guide

This guide is designed to support the effective implementation of the UN Guiding Principles on Business and Human Rights. It provides additional background, detail and assistance in understanding the Guiding Principles, and complements the commentary contained in the Guiding Principles themselves. It defines key concepts, elaborates on the foundational and operational principles underlying the corporate responsibility to respect, and includes a series of questions and answers for businesses.

Principles for Responsible Contracts: Integrating the Management of Human Rights Risks Into State-Investor Contract Negotiations

This resource is based on extensive consultation during Ruggie’s UN mandate with government and company legal representatives involved in such negotiations, particularly from the African region. The summary is excerpted from the resource. We also recommend training materials related to this topic issued by the UN.

Summary

Every business venture has the potential to have positive and negative impacts on people and human rights – those rights and freedoms that the international community has agreed that people need in order to live with dignity. In some cases, where the potential positive and negative human rights impacts of a venture are direct and significant, managing human rights risks will be an essential consideration to be included at the earliest stages of the life cycle of the venture. This is the case where the project presents either large-scale or significant social, economic or environmental risks or opportunities, or involves the depletion of renewable or non-renewable natural resources.

In such cases, irrespective of the sector involved, the negotiation process between a host State and a business investor offers a unique opportunity to identify, avoid and mitigate human rights risks. This will help optimize the full range of benefits to be drawn from the investment and help ensure the potential negative impacts on people are avoided or mitigated. Moreover, these principles will help ensure that States maintain adequate policy space in the investment contract, including for the protection of human rights, while avoiding claims relative to the contract in binding international arbitration.

The 10 principles that can help guide the integration of human rights risk management into contract negotiations are listed below:

  1. Project negotiations preparation and planning: The parties should be adequately prepared and have the capacity to address the human rights implications of projects during negotiations.
  2. Management of potential adverse human rights impacts: Responsibilities for the prevention and mitigation of human rights risks associated with the project and its activities should be clarified and agreed before the contract is finalized.
  3. Project operating standards: The laws, regulations and standards governing the execution of the project should facilitate the prevention, mitigation and remediation of any negative human rights impacts throughout the life cycle of the project.
  4. Stabilization clauses: Contractual stabilization clauses, if used, should be carefully drafted so that any protections for investors against future changes in law do not interfere with the State’s bona fide efforts to implement laws, regulations or policies in a non-discriminatory manner in order to meet its human rights obligations.
  5. “Additional goods or service provision”: Where the contract envisages that investors will provide additional services beyond the scope of the project, this should be carried out in a manner compatible with the State’s human rights obligations and the investor’s human rights responsibilities.
  6. Physical security for the project: Physical security for the project’s facilities, installations or personnel should be provided in a manner consistent with human rights principles and standards.
  7. Community engagement: The project should have an effective community engagement plan through its life cycle, starting at the earliest stages.
  8. Project monitoring and compliance: The State should be able to monitor the project’s compliance with relevant standards to protect human rights while providing necessary assurances for business investors against arbitrary interference in the project.
  9. Grievance mechanisms for non-contractual harms to third parties: Individuals and communities that are impacted by project activities, but not party to the contract, should have access to an effective non-judicial grievance mechanism.
  10. Transparency/Disclosure of contract terms: The contract’s terms should be disclosed, and the scope and duration of exceptions to such disclosure should be based on compelling justifications.

UN Guiding Principles on Business and Human Rights

Table of Contents

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I. THE STATE DUTY TO PROTECT HUMAN RIGHTS
  • Foundational principles
  • Operational principles
II. THE CORPORATE RESPONSIBILITY TO RESPECT
  • Foundational principles
  • Operational principles
III. ACCESS TO REMEDY
  • Foundational principles
  • Operational principles

Piloting Principles for Effective Company-Stakeholders Grievance Mechanisms: A Report of Lessons Learned

This study reflects the findings of five on-the-ground pilot projects to examine what constitutes effective non-judicial grievance mechanisms. Its findings led to the eight principles of effectiveness for non-judicial grievance mechanisms, which are reflected in Guiding Principle 31 as the “effectiveness criteria.” The criteria are: legitimacy, accessibility, predictability, equitability, transparency, rights-compatibility, dialogue and engagement, continuous learning.

The summary below is excerpted from the resource.

Summary

This report sets out key lessons learned from a pilot project conducted in 2009-2010 to test the practical applicability of a set of principles for effective non-judicial grievance mechanisms that address complaints or disputes involving businesses and their stakeholders. The principles were developed by the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises and set out in his reports to the Human Rights Council in 2008 (A/HRC/8/5) and 2009 (A/HRC/11/13).

The project was conducted on behalf of the Special Representative to help refine these principles in advance of their incorporation into a wider set of Guiding principles on business and human rights (A/HRC/17/31), which the Special Representative will present to the Human Rights Council in June 2011. The project focused on operational-level grievance mechanisms – that is, mechanisms developed by companies with/for stakeholders affected by their operations. The companies involved in the four main pilots to design or revise grievance mechanisms in line with the Special Representative’s principles were Carbones del Cerrejón, a coal mine in Colombia; Esquel Group, a Hong Kong-based garment company, working with its wholly-owned supplier in Viet Nam; Sakhalin Energy Investment Corporation, an oil and gas company in the Russian Federation; and Tesco Stores Ltd, a United Kingdom-based multinational supermarket chain, working with suppliers in South Africa. An adjunct project with Hewlett-Packard and two of its suppliers in China retrospectively analyzed their collaborative efforts to enhance suppliers’ grievance mechanisms and reviewed them in light of the Special Representative’s principles.

The purpose of the pilot project was to test the benefits of grievance mechanisms that are aligned with the Special Representative’s principles, and to learn lessons about how the principles could be further refined to reflect operational realities and enable their practical application. The extensive time spent in the process of designing or revising the grievance mechanisms meant that there was little time to monitor their operation in practice. Any such review will require further work in future. However, substantial lessons were gained from the processes undertaken. Those that are of most general relevance are summarized in this overarching report, while more specific and detailed learning is reflected in the individual reports of each project, which are attached in Annexes A to E.

  • Section I of this report expands on the background and purpose of the project, defines what is meant by “operational-level grievance mechanisms,” and sets out the principles that were tested.
  • Section II describes the methodology for the four main pilots (the separate methodology of the adjunct project is described in that specific report at Annex E).
  • Section III reflects cross-cutting lessons learned, setting them out under each principle in turn, and concluding with an explanation of how the principle was adjusted to reflect the learning (adjustments were limited to the extent that they had to be applicable, not only to operational-level mechanisms, but also to other kinds of non-judicial mechanisms covered by the principles).
  • Section IV offers a brief conclusion, and sets out the principles as revised.