Navigating expectations on Human Rights, part 1 of 2

  by Hanna Roberts, CEO at GES

Abridged from an article published in Ethical Boardroom on 4 August 2017


Human Rights is a vast area to handle for companies and investors alike and the link to materiality is not always clear. Corporate related wrongdoings can include as diverse issues as alleged violations of human rights in relations to hydropower or mining projects, impacts on indigenous people’s rights, human and labour rights issues in the supply chain of commodities, such as cocoa, cotton, palm oil, laptops, tablets and smart phones.

The consequences for a company with poor human rights policy and programmes are elevated risks, both reputationally and financially – for instance protests, large legal fines, consumer boycotts as well as being deselected as a preferred employer for staff, or as a business partner or supplier.

So how should a company or investor navigate the field of human rights?

Below we briefly present what is expected of business enterprises in relation to human rights. Some recent tools that can be of aid for corporations will be presented in part two of this blog, coming shortly.

In line with international standards formulated over the years by the international community starting with the Universal Declaration on Human Rights and for example the six-year-old UN Guiding Principles on Business and Human Rights[1], business enterprises have the responsibility to respect human rights wherever they operate and whatever their size or industry.

Some of the core concepts for companies to develop and implement in relation to human rights are on policy, due diligence and remedy.

Corporations should publicly commit to respect human rights and embed this policy in all parts of the organisation. Furthermore, companies should perform due diligence and investigate the most salient human rights risks. For instance, a corporation should assess the scale of the potential impact – how serious is the risk, e.g. are resettlements necessary due to the company’s operations and have those affected been adequately consulted and fairly compensated for their losses? Are migrant workers’ labour rights respected while building a new football stadium? Does the company have an effective monitoring and remediation system in place to ensure child labour is not prevalent in its agricultural supply chain? Will the local government ensure consultation and consent from project-affected indigenous peoples? What can the company do to support and ensure such rights are respected? Companies should also address the scope and number of people that are potentially affected in order to assess how salient and material these risks are.

There will be a need to prioritise the actual or potential violations of human rights[2]. Companies are increasingly asked by investors, consumers, media and NGOs to understand and handle these risks and use their leverage to ensure the respect of human rights wherever possible. Impacts on human rights can often converge with risks to the business as well. Apart from making a positive contribution in society and avoiding harm, there are often strong business cases for human rights – employees and business partners are motivated to work for, or with, a respectful company, legal risks decrease, long-term relationships can be built with communities close to operations, to name a few.

If the situation has already turned bad, then there is a need to address and provide remedy options to those affected. The Guiding Principles also provide practical guidance on how remedy can be provided in the form of grievance mechanisms, i.e. appropriate channels where those affected can file claims and have them investigated, and ultimately compensated, through a reliable process. Fortunately, there is a growing number of best practice examples in this particular area, that companies can learn from.

Other important features in the area of business and human rights include an understanding of transparency, follow-up and communication. Communication can take a variety of forms, including face-to-face meetings, online dialogues, consultation with affected stakeholders, and formal public reports. Ensuring a consultation process and obtaining consent from indigenous people, affected by for example a large infrastructure project, is a right that is protected under The Indigenous and Tribal Peoples Convention (ILO 169) and United Nations Declaration on the Rights of Indigenous Peoples. By engaging stakeholders, including local and indigenous people, companies can ensure they comply with international norms and gain what is often referred to as the “social licence to operate”. They also mitigate the risk of violating indigenous people’s rights and the related potential consequences such as protests, road blocks, violence and other security issues.

Some recent tools, such as the UN Guiding Principles Reporting Framework and the Corporate Human Rights Benchmark, which can be of aid for both companies and investors alike, will be presented in our next blog.


[1] The UN Guiding Principles on Business and Human Rights

[2] One way for corporations to establish its standing on human rights and other social, governance, and environmental issues is UN Global Compact Self-Assessment Tool.


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