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Shell’s environment vice president, Allard Castelein.
Shell’s environment vice president, Allard Castelein, waits for the start of the Nigerian court case in The Hague. Photograph: Peter Dejong/AP
Shell’s environment vice president, Allard Castelein, waits for the start of the Nigerian court case in The Hague. Photograph: Peter Dejong/AP

Shedding light on human rights: do businesses stand up to scrutiny?

This article is more than 9 years old

Labour trafficking, environmental damage, human rights abuses – a new database aims to collect information on businesses and their human rights performance

On 19 February, Alabama-based ship repair firm Signal International was found guilty of labour trafficking, fraud and discrimination. It was ordered to pay $14m to five Indian men who it had lured to work in the US in inhumane conditions following Hurricane Katrina.

A few weeks earlier, Shell paid £55m in an out of court settlement to the Nigerian Bodo community after oil spills had destroyed their livelihoods.

There are increasing costs to business when they fail to respect basic human rights. Many are therefore taking steps to avoid abuses – and are taking a proactive rather than reactive approach. When I started working on business and human rights issues 13 years ago, only a handful of companies had policies in which they explicitly commit to respect human rights. Things have changed rapidly. Now 34 of the world’s 50 largest companies have a publicly-available human rights policy, as well as many smaller firms.

The UN Guiding Principles on Business and Human Rights, endorsed in 2011, have played an important role in spurring action, along with growing public awareness of and protest against corporate abuses in all regions.

Today the Business and Human Rights Resource Centre is launching a “Company action platform” that illustrates the many forms this action is taking – from Tesco’s efforts to help tackle forced labour in the Thai fishing industry down its supply chain, to Brazilian mining company Vale’s creation of an ombudsman’s office to receive human rights complaints.

Too many companies are still barely engaging, however. Competition for natural resources is intensifying. Conflicts over working conditions and land use are likely to increase. In this context it is essential that a critical mass of companies takes human rights seriously, rather than considering them a nice to have addition to corporate responsibility programmes.

Retail sector and state-owned firms lag behind

To build the action platform we contacted 180 companies worldwide with questions about their human rights policy and practice. The answers, including non-responses, are publicly available, and alongside each we also provide news and reports about the company’s human rights impacts from civil society and the media.

Compared to the overall response rate of 51%, the retail and apparel sector’s engagement with the survey was disappointingly low – only 27%. (Similarly, only 37% of the companies in that sector that we contacted have a human rights policy). While some of the major apparel firms like Adidas, Nike and Gap now have strong human rights programmes in place, a huge swathe of the sector including online retailers are escaping scrutiny and not taking concerted steps to improve their social impacts. Alibaba, Amazon and eBay were among the companies that did not respond.

Among extractives, there was a distinction between privately owned (64% responded) and state-owned (36%). While Petrobras (Brazil), PetroChina and Statoil (Norway) did provide information for the platform, Pertamina (Indonesia), Petronas (Malaysia), PDVSA (Venezuela), and several others have not yet responded, nor do they have human rights policy commitments.

Recognising that business action on human rights cannot happen in isolation, we also launched a government action platform. Governments, and the interaction between business and government, are an essential part of the picture.

Four tiers of action

Using the survey we identified four levels of action by companies:

Inactive, or “asleep at the wheel”: Companies that have no evident social programmes in place, and seemingly see no reason to engage. As the Signal cases illustrate, some will not get away with this – yet others will. Greater scrutiny of these firms is needed to hold them to account.

Getting started: Companies with corporate responsibility or sustainability programmes, which are gradually becoming aware of the need to take human rights on board.

Making progress: Companies that have likely taken the first step of adopting a human rights policy and are now exploring how to implement it. These firms may be participating in various multi-stakeholder initiatives but have a tendency to see membership of them itself as sufficient action.

Moving ahead: A small group of companies that have integrated human rights into their operations for some time now. These companies have some (rarely all) of the following characteristics: a clear vision of the company’s approach to human rights , country-level human rights impact assessments, an ability to respond seriously and comprehensively to new risks and recognise the company’s limitations, efforts to tackle root causes of abuses, strategic and constructive cooperation with stakeholders, and engagement of governments on human rights issues in public or private.

One of the survey questions asked the companies to specify challenges they face. The most commonly referred to were the complexity of supply chains, a lack of understanding of the language of human rights, and weak government enforcement. Interestingly in our government survey, several governments cited opposition by the private sector as an impediment to action.

For each challenge, however, there are examples of companies working to overcome them. Spanish clothing firm Inditex, for example, has 1,500 suppliers in 46 countries, often with widely different contexts. It works with local teams, trade unions, NGOs and others to help ensure labour rights are respected. BHP Billiton makes efforts to ensure “the language used when discussing human rights is accessible and relevant to all levels of the workforce”. Cisco attempts to challenge the Chinese government’s Wi-Fi security standard (WAPI), on the basis it falls short of international standards in user privacy.

No company’s operations are free from human rights abuses. But guidance and examples of specific approaches to tackle challenges are readily available. No company has an excuse for inaction.

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