While respect for human rights and corporate activism are often seen as distinct, in this short video, Business Engagement Director Francis West and Advisor Daniel Berezowsky make the case for companies to use their voice and influence as a key part of their responsibility to respect human rights.
The European debate on mandatory human rights due diligence (HRDD) has gained significant momentum in the last year. A number of national initiatives are coming to a head in late 2020, and the European Commission is launching a formal consultation on a potential EU-wide regime on mandatory human rights and environmental due diligence. We have seen growing business support for mandatory HRDD, from both individual companies and business associations, as well as an increase in joint calls by business and civil society for such measures.
October 2020 |
Opening Remarks by John Ruggie at the Conference “Human Rights and Decent Work in Global Supply Chains”
As we approach this critical moment, we have been working hard at Shift to support constructive discussions among government, business and civil society allies about the role and content of new regulation. In particular, we have been engaging with businesses that are supportive of new measures, but have concerns about what shape it might take and what the consequences might be.
In this briefing note, we explore what well-designed mandatory HRDD measures could look like, with a focus on the role of accountability – or consequences – for meeting a new legal standard of conduct. We set out three key considerations that we believe businesses that are committed to meeting their responsibility to respect human rights should keep in mind:
The legitimate role of liability in implementing the UN Guiding Principles
Incentivizing robust HRDD through accountability measures that go beyond liability
Assessing the quality of a company’s due diligence
Everywhere, human rights are at risk from the impacts of COVID-19. People around the world fear for their life and health, livelihoods, civil liberties and privacy, to name just a few issues. At the same time, many businesses are facing existential threats, as they seek to survive or adapt to a new and unprecedented reality. As they make painful decisions, companies need to bring precision thinking to how their choices will impact the lives of people that work for, depend on, or are otherwise connected to their business.
This resource offers focuses on five approaches that companies can put in practice to ensure that they are making rights-respecting decisions:
Apply the lens of vulnerability to prioritize action
Involve relevant stakeholders in critical decision-making processes
Use leverage with governments on policy responses
Communicate your actions clearly
Have honest decisions about risks that are baked into the business model
The last page on this resource is an annex that can help companies get started on identifying the increased or new human rights risks that arise as a consequence of the pandemic.
Increasingly, investors are becoming interested in understanding to what extent companies are respecting human rights, and whether their efforts are likely to improve the lives of affected people. A good place to start is by reading a company’s human rights disclosure. But company reports are often hard to analyze. On the surface, many companies will seem to be doing the right thing. But, how can investors tell whether what they are reading is meaningful and in line with what the UN Guiding Principles expect? This collection of resources was designed by Shift to help investors apply a people-centered approach to gain deeper insights from company disclosure.
In each issue, we have selected a number of excerpts from different companies that have generally taken a forward position on business and human rights and are considered leaders in reporting in their sector. We provide a brief analysis of each excerpt, highlighting strengths in the insights it offers, and note some elements that could make it stronger.
In March 2020, Shift published the first two issues of the series:
ISSUE 1 – Engagement with Vulnerable Stakeholders
______ This resource is meant to serve as a guide for investors and others in analyzing companies’ disclosure on their stakeholder engagement practices. The aim is to help readers identify potential strengths and gaps in the underlying performance of the company in engaging vulnerable groups.
This resource uses company reporting from Marks & Spencer, Best Buy, Teck, Adidas and Rio Tinto.
_____ This resource uses excerpts from companies’ reporting on their efforts to tackle gender-based impacts. In particular, it looks at whether a company’s disclosure indicates that it sees gender impacts as relevant for business; whether a company’s disclosure suggests it has real insights into women’s experience in the workplace; and whether a company’s disclosure suggests it is alert to other dimensions of gender-based discrimination.
______ This resource focuses on excerpts from company reporting on setting targets and tracking performance. Specifically, it examines whether the company only reports on issues it deems material to the business; if the only indicated external input for the human rights issues the company prioritizes is a generic survey; if a company’s list of material issues includes both individual human rights and a category of ‘human rights’; and whether human rights issues are listed in company disclosure without further explanation of how these relate to the business’s own operations and value chain.
Issue three uses company reporting from Total, Nestlé, ABN AMRO, Newmont and Pepsico.
ISSUE 4 – Taking Action on Systemic Human Rights Challenges
______ This resource focuses on excerpts from company reporting on systemic human rights challenges. Specifically, it looks at whether the company positions itself solely as part of the solution to the human rights challenge concerned; whether the company only reports its membership in groups or collective initiatives that tackle certain systemic human rights risks without describing its engagement with these initiatives and how this contributes to change; and whether the company reports on any actions it has taken unilaterally to address its own potential involvement with that issue.
The fourth issue uses company reporting from H&M, ASOS, Mondelez, Anglo American and Microsoft.
______ This resource focuses on examples from companies of targeted action. It delves into whether the company only reports generally on its process for identifying and addressing human rights impacts; whether the company reports on how the perspectives of affected stakeholders informed its understanding of the impact and its decisions on what action to take; and whether the company talks about engagement with suppliers or other business partners on human rights-related issues in terms of compliance.
This resource uses company reporting from ING, M&S, FMO, ASOS and Unilever.
ISSUE 6 – Setting Targets and Tracking Performance
______ The final issue focuses on excerpts from company reporting on setting targets and tracking performance. It looks at whether the company’s targets set and track in reporting are limited to activities or outputs; whether the company follows up on the extent to which all of targets set in one reporting period were met in the next; and whether data on human rights performance is aggregated such that meaningful insights cannot be drawn from the disclosure.
This resource uses company reporting from Unilever, Nestlé, Teck, M&S and C&A.
Seguido, las empresas tienen dificultades para identificar e implementar acciones significativas que atiendan los riesgos a los derechos sindicales en sus cadenas globales de valor. Ello por distintos factores:
Externos, como los que surgen del contexto en el que operan y en el que se extienden sus cadenas de valor. Ello incluye las leyes y regulaciones, el estado de derecho, las prácticas sociales que enmarcan las percepciones culturales sobre los sindicatos y la capacidad local de sindicatos y empresas socias para llevar a cabo acciones en la práctica.
Modelos de negocio, que pueden resultar en riesgos exacerbados a los derechos sindicales si no son propiamente administrados. Ello incluye el tener insumos de mercados de alto riesgo (o bajo costo), el uso intensivo de trabajadores contratistas o temporales, y las propias práctiacas de adquisición de las empresas.
La cultura corporativa y las prácticas empresariales, lo que puede incluir suposiciones y actitudes hacia los sindicatos por parte de las oficinas centrales, así como debilidades en el proceso de debida diligencia.
En la parte 2.2 de esta publicación se incluye también una herramienta de diagnóstico, que puede servir para que las empresas entiendan cómo y dónde pueden existir los riesgos para los derechos sindicales.
Asimismo, se delinean algunos ejemplos de pasos que pueden tomar las empresas dependiendo de los riesgos que existen, y ocho casos práticos de casos reales en los que otras empresas han logrado sobrepasar estos retos.
Between 2010-2014, the Peruvian fruit growing company Composol was in ceaseless conflict with its workers and their union representatives. It had strong turnover of staff, low motivation among those remaining, and, according to its own accounts, very high litigation cost due to constant cases before the labor courts. The company’s labor troubles were even featured as a prominent case example in complaints filed by Peruvian and international unions with the US Department of Labor and the European Commission related to beneficial trade agreements.
It was not until 2014 that the company started to realize how much of an impact this was having on its business, and decided more meaningful action was necessary. Together with local and internationally focused unions and business associations, the company embarked on a path towards fully embracing social dialogue and trade union rights. Through a process of trust-building, negation training and capacity building on labor rights -among others- the company and unions were able to fundamentally transform their relationship. In addition to more satisfied workers and meeting company commitments, results also included lowered costs in recruitment, transportation and legal fees, among many others.In the words of Javier Morales, Camposol’s Managing Director of the Fruit and Vegetable Division: “We have been able to be profitable while focusing on people. (…) Now workers come to Camposol because they choose to, not because they have to as in the past. Competitors are raising the salaries to attract workers more but it is not the only thing that workers seek. What they seek is also a healthy emotional relationship with their employer. We demonstrate that we can align the interests of workers and shareholders.” Perhaps most central to turning things around was the realization that in order to ensure respect for trade union rights companies need to take proactive steps to realize them in practice. This, in a nutshell, is the key message of our newest publication ‘Respecting Trade Union Rights in Global Value Chains’, developed with Mondiaal FNV, to help companies approach trade union rights proactively.
What are trade union rights?
What are trade union rights?
Freedom of association and the rights to collective bargaining (collectively referred to in the publication as “trade union rights”) are recognized by the International Labour Organisation (ILO) as one of a set of four core labor standards that all governments and companies should adhere to. While they are fundamental rights in and of themselves, trade union rights are also recognized as “enabling rights,” meaning that respecting these rights can often lead to the fulfillment of a number of other labor rights, including adequate wages, reasonable working hours, workplace safety, and a work environment free from discrimination and harassment.
Action on trade union rights is hard…
Those who have worked on trade union rights know that this is all easier said than done.
While many companies list respect for trade union rights in their policy commitments, pledge to adhere to industry standards, and participate in multi-stakeholder initiatives, many still struggle to identify and implement meaningful action to address the risks to trade union rights in their global value chains.
In our work with Mondiaal FNV we recognized three categories of barriers that often create challenges for global companies to ensure respect for trade union rights in their global operations and value chains:
External factors: Respecting trade union rights in many contexts can be extremely challenging: local laws may prohibit them, union-relations may be seen to be political, and local business partners may not see the value in changing what already works.
Business models and practices: some companies have risks embedded in how they are structured or in how they operate. For instance, extensive reliance on contract labor, or sourcing strategies that rely upon production in markets with lower labor costs and often weaker labor protections.
Internal company governance and due diligence pitfalls: a number of challenges arise from weaknesses in corporate governance and due diligence. For example, a lack of understanding of trade union rights, limited visibility into conditions in the supply chain, or strong commitments on paper not being translated into action on the ground.
Our publication provides a detailed diagnostic tool with simple questions to help companies identify the specific barriers they might face in a particular context or relationship.
… but there are ideas and experiences to inspire action
We have seen that those companies who identify their salient human rights issues (one of the practical steps the publication suggests) now often include freedom of association and right to collective bargaining among them. I believe it reflects a broader understanding of how interconnected human rights impacts are and that one of the most sustainable ways to improve human rights for workers—in a way that also brings benefits to business—is to give workers a voice and take proactive steps to reduce barriers and reinforce constructive relationships that enable them to organize, make their voice heard and take a stake in the long-term interest of the company.
October 2019 |
Respecting Trade Union Rights in Global Value Chains: Practical Approaches for Business
But identifying trade union rights as important is only the first step. We need to move to action. Our work with companies on these issues has surfaced a range of practical approaches companies are taking to address these barriers in new and meaningful ways. Whether it is the Freedom of Association protocol that was developed by apparel and footwear companies with local suppliers and stakeholders in Indonesia to address the locally challenging context for trade union rights or the way that companies have collaborated in Mexico to jointly apply leverage to improve union relations.
Different types of approaches are almost certainly going to be necessary to address the range of situations a company might face and the different types of barriers that may be present. The resource offers a continuum of different types of leverage that can be applied internally and externally, with practical case examples to illustrate these approaches in practice: for example, working jointly with peer companies and international and local trade unions to advance collective bargaining to improve living wages in the garment sector, or exerting collective leverage with peers vis-à-vis a government to improve laws and regulations that protect trade union rights (both of which have concrete case examples in the publication).
Our aim is to inspire companies with ideas for concrete action, to move from recognizing risks to trade union rights to taking meaningful action to address those risks, by drawing from a menu of potential options for action. We hope it can provide companies with a roadmap for developing thoughtful, meaningful and targeted actions necessary to tackle these issues more effectively in practice.
The second pillar of the Guiding Principles provides a blueprint for businesses to prevent and address negative human rights impacts. This blueprint is made up of eight elements — click on the elements below to explore each one.
As companies implement the eight elements, they should also keep in mind these overarching concepts:
The “blueprint” of the Guiding Principles is a risk management approach – but the focus is on risk to people, not just risk to the business;
The responsibility to respect human rights extends throughout a company’s own operations and all of its business relationships throughout its value chain;
Compliance with local law may not be sufficient to meet the expectations of the Guiding Principles;
Companies cannot offset negative impacts on people by “doing good,” such as through philanthropy or staff volunteering.
What Does the Responsibility to Respect Human Rights Mean for Enterprises?
In order to “know and show” that it respects human rights, an enterprise should have in place:
Processes for helping provide remedy to anyone who is harmed as a result of the organization’s actions or decisions.
In What Ways Can Enterprises Be Involved with Negative Human Rights Impacts?
They may cause negative impacts, for example if employees are injured due to unsafe working conditions, or if they displace communities from their lands and livelihoods without due process and adequate compensation;
They may contribute to negative impacts, for example if their purchasing practices incentivize suppliers to force workers into unpaid overtime to meet contractual requirements, or if multiple companies drain or pollute the water resources essential for local communities’ drinking supply;
They may be linked to negative impacts, for example, if forced labor or child labor is used to make their products, or if customer privacy is breached by a service provider or government, despite the company’s efforts to avoid these outcomes.
In April 2019, Shift and the International Organisation of Employers (IOE) co-convened a workshop to explore the challenges, experiences and leading practices of small and medium enterprises (SMEs) in fulfilling their responsibility to respect human rights. This summary note, published by IOE, provides an overview of the key takeaways.
This pre-read for our April 26th consultation in London provides a brief overview of current thinking in behavioral science, and ways we might apply that thinking in a business and human rights context to improve outcomes for people.