Memorandum submitted by ActionAid UK
INTRODUCTION
1. This document represents ActionAid's
views on the role of the UK government in relation to business
and human rights. It has been produced as a submission to the
Joint Committee on Human Rights' inquiry into business and human
rights.
2. ActionAid is an international development
agency whose aim is to fight poverty worldwide. Formed in 1972,
we work with local partners to fight poverty and injustice in
42 countries worldwide. We help the most vulnerable people
fight for and gain their rights to food, shelter, work, education,
healthcare and a voice in the decisions that affect their lives.
3. ActionAid has significant experience
in the field of business and human rights. We have researched
and presented evidence of numerous examples of violations of poor
people's rights overseas by UK based companies or their subsidiaries.
4. As a member of the Corporate Responsibility
Coalition (CORE), ActionAid played a key role in campaigning for
a strengthening of reporting requirements and changes in directors'
duties as part of amendments to the Companies Act, which now oblige
company directors to report on social and environmental concerns.
ActionAid has also worked alongside other NGOs to make submissions
to the UN Special Representative on human rights and transnational
corporations and other business enterprises' mandate.
5. ActionAid welcomes the Joint Committee
on Human Rights' inquiry into business and human rights and supports
its use of Professor Ruggie's framework of protect, respect and
remedy to structure its discussion. We will submit evidence under
these three headings to address some of the questions posed by
the committee, drawing significantly on an ActionAid case study
of UK business involvement in human rights abuse overseas.
6. ActionAid has recently documented that
a subsidiary of UK-listed mining company Vedanta Resources plc's
(thereafter Vedanta) has violated or been complicit in the violation
of various rights of local people through the establishment of
a bauxite processing plant and proposed bauxite mine in Orissa,
India. Rights violations include the right to life and personal
liberty and religious rights codified under various national and
international agreements.
7. The key points of this paper will be
that:
— the UK government is lagging behind the
debate on business and human rights. It continues to place too
much emphasis on voluntary approaches which makes its overall
approach to business and human rights incoherent and weak;
— corporate social responsibility (CSR)
is no substitute for business's responsibility to respect human
rights. Indeed, CSR often masks businesses' involvement in human
rights violations;
— current remedies, both in home and host
states, are inadequate and those seeking redress often face significant
barriers in accessing them; and
— the UK Government should establish a
Commission on Business, Human Rights and Environment as an important
step to tackling some of these issues.
STATE DUTY
TO PROTECT
8. In his 2008 report to the United
Nations Human Rights Council (UNHRC), Professor John Ruggie outlined
the importance of the State duty to protect human rights, including
preventing abuses by third parties such as business. He highlighted
that this duty can and should extend beyond a state's own borders
to prevent human rights abuses abroad, particularly those perpetrated
by companies based in its own territory[61].
9. ActionAid strongly supports this idea.
UK business is spread across every continent and affects the lives
of millions through its operations, investments and trade. Much
of this takes place in host countries whose state mechanisms are
inadequate to protect their own citizens for a variety of reasons
including conflict, weak judicial systems, corruption and discrimination.
ActionAid has observed many instances of this. For example, in
Orissa, India, discrimination against indigenous peoples and a
pro-business bias within state apparatus has prevented local communities
from seeking adequate redress for human rights abuses committed
by mining company Vedanta. More detail will be given of this under
the heading Access to remedies later in the discussion.
10. Professor Ruggie's report highlights
the current failure of states to fulfil their duty to protect
with respect to business and human rights including, "how
to foster a corporate culture respectful of human rights at home
and abroad"[62].
He states that introducing policies to remedy this "should
be viewed as an urgent policy priority for governments"[63].
ActionAid believes that this is particularly true of the UK.
11. The UK government's strategy for ensuring
that businesses respect human rights is currently incoherent and
weak. Its emphasis lies in minimum standards and voluntary codes
and responsibility even for these measures is split amongst different
departments causing confusion and a lack of concerted effort.
It fails to recognise that CSR can only work if underpinned by
a strong regulatory framework.
12. In a recent report the government highlights
the importance of 'corporate responsibility' but defines this
as "the voluntary actions that business can take, over and
above minimum legal requirements…"[64],
and goes on to outline its strategy for achieving corporate responsibility
as being "to create a policy framework with minimum levels
of performance in the fields of health, environmental impact and
employment practices…" [author's emphasis].[65]
It uses soft language with regards to its relationship to business,
saying it wants to "encourage" business to recognise
the value of corporate responsibility and "to reach out"
to those that don't.[66]
13. This reliance on minimum standards and
voluntarism is of deep concern to ActionAid. Voluntary initiatives
have a limited scope in terms of the rights they include and the
sectors they cover and many "laggard" companies choose
not to join any voluntary initiative. For example, the leading
supermarket chain Morrisons has not joined the Ethical Trading
Initiative,[67]
a multi-stakeholder scheme championed by the government.[68]
Due to their voluntary nature such initiatives typically fail
to ensure that the principles which they advocate are upheld in
practice; even the more robust multi-stakeholder initiatives fall
short of what is needed to ensure compliance. Standards are inconsistent
across initiatives and do not require all companies to respect
all human rights but allow companies to "opt in" to
standards which are convenient and allow them to "opt-out"
of those that aren't. This contradicts the concept of human rights
as being inalienable, leaving it up to business to decide which
human rights to uphold and when.
14. ActionAid is also concerned that the
government's current approach for progressing the corporate responsibility
agenda lies between different departments. The minister responsible
for corporate responsibility (amongst other briefs) straddles
BERR and the Treasury, whilst many of the governments' relationships
with numerous voluntary initiatives are managed by an array of
other government departments.[69]
Responsibility for the National Contact Point (NCP) for the OECD's
guidelines on Multinational Enterprises is split between BERR,
DFID and the FCO. These splits demonstrate a lack of coherence
in the government's approach to business and human rights and
fail to task a single institution with responsibility for the
issue.
15. Given the progression of the business
and human rights agenda at the UN, which now goes beyond the limiting
dichotomy of voluntary vs regulatory, the UK government's continued
reliance on voluntary measures shows it to be lagging behind the
debate. In looking to promote only minimum standards the government's
strategy lacks ambition and its emphasis on "encouraging"
voluntary corporate responsibility fails to meet its State duty
to protect. The UK government should remedy this by introducing
a regulatory framework which ensures social and environmental
best practice and enforces businesses' responsibility to respect
human rights.
THE CORPORATE
RESPONSIBILITY TO
RESPECT
16. Whilst not being successful in ensuring
that business respects human rights, the widespread existence
of voluntary business initiatives and company CSR schemes demonstrates
that the principle that business should respect human rights is
universally accepted. However, time and again a commitment to
human rights by companies does not translate to human rights being
respected in practice.
17. ActionAid has been monitoring the activities
of one UK registered company, Vedanta, particularly its operations
in the state of Orissa in India. On paper Vedanta clearly recognises
the importance of corporate responsibility and accepts that it
should respect human rights. It is a member of the UN Global Compact
and the company's website has a large section devoted to 'sustainable
development'.[70]
Its eighty page Sustainable Development Report states that "All
of our companies have a policy of adhering to applicable local
human rights legislation."[71]
18. However ActionAid has found that, contrary
to these stated policies, Vedanta's operations in Orissa have
significantly breached the human rights of local communities,
illustrating the shortcomings of self regulation as means of policing
corporate behaviour. Indeed Vedanta's construction of an integrated
aluminium complex in the region has led to accusations of several
human rights violations including:
— the razing and displacement of indigenous
villages in violation of internationally recognised rights to
property and livelihood;
— the proposed construction of a mine on
Niyamgiri mountain which is protected and considered sacred by
the Kondh tribal people thereby violating communal, cultural and
religious rights;
— environmental pollution in the form of
caustic soda emissions from the Lanjigarh refinery. People locally
have complained of breathing difficulties and skin complaints
as well as damage to crops and livestock, again impacting on their
rights to livelihood as well as health; and
— that the company has been complicit with
local hired security in forcibly removing those who resisted evictions.[72]
19. Vedanta denies these allegations and
instead highlights the 'sustainable development programmes' it
has brought to the area, including new housing, health and medical
facilities. However, the rehabilitation package for displaced
villagers is ill suited to the sustainable livelihood of local
communities. There is no provision made, for example, for animal
grazing or agriculture—the Kondh people's primary means
of sustaining their livelihood.[73]
20. This highlights a common problem with
the CSR model within business: the notion that community development
initiatives can be seen as alternatives to corporate accountability
and respecting legally-enshrined human rights. Human rights are
inalienable, indivisible and non-exchangeable and the violation
of them cannot be excused by the donation of an alternative and
often unsolicited benefit.
ACCESS TO
REMEDIES
21. The case of Vedanta's operations in
India also highlights current significant problems faced by victims
of human rights abuses by UK companies, in terms of accessing
effective remedies and redress. The CORE Coalition, of which ActionAid
is a member, recently worked with the London School of Economics
to look at the issue of redress. The report The Reality of Rights[74]
found that in terms of seeking redress from Vedanta, the indigenous
peoples of Orissa have found all existing judicial and non-judicial
channels inadequate. All despite the fact that the human rights
which have been breached are codified in either Indian law or
international treaty ratified by India.
22. Within India, indigenous families affected
by the refinery have attempted to use political channels of redress
including public protest and lobbying of local politicians only
to find local officials and police to be predominantly aligned
to the company. Petitions to the Indian Prime Minister and Orissa
state government have similarly failed due to State support for
mining and the potential financial benefits to the State from
the mine.
23. Other non-judicial avenues within India
have also failed or would not have led to effective redress. The
country does have a National Human Rights Commission, for example,
but it has very weak legal powers and is not able to enforce any
recommendations.[75]
24. Despite the existence of a human rights
framework in India in the form of the Indian Constitution and
a Supreme Court, attempts at judicial redress by affected communities
have also proved unsuccessful thus far. As is often true in cases
of marginalised communities attempting to seek judicial redress,
complainants faced financial and educational barriers to a costly
and complicated process. Nonetheless three complaints were made
to the Supreme Court on behalf of affected communities by Indian
human rights and environmental organisations. However, the process
is lengthy, making it hard for claimants to resource the claims
and the court has failed to make decisive recommendations which
would prevent further human rights abuses, namely by ordering
a cessation of Vedanta's activities in Niyamgiri.
25. One case was brought before the Supreme
Court in 2005, accusing Vedanta of violating environmental guidelines
for both the refinery and the proposed mine and for deliberately
and consciously concealing the inclusion of forest land in the
project. In 2007 the court made an interim ruling refusing
Vedanta permission to mine bauxite, however Vedanta was allowed
to reapply for permission to mine through another of its subsidiaries,
Sterlite. In August 2008, despite its previous ruling, the Supreme
Court granted permission for the building of the mine by Sterlite
in a joint venture with the Orissa State government (Orissa Mining
Corporation) and for the refinery to continue to operate.
26. The case of Vedanta in Orissa strongly
demonstrates common failures in host states' duty to protect their
citizens' human rights and the barriers that exist within host
states for adequate redress for victims of human rights abuses.
Further examples can be found in CORE's report The Reality of
Rights.
27. This Vedanta example also shows the
inadequacy of existing international and home state mechanisms
for redress. Many business organisations and governments point
to the OECD Guidelines on Multinational Enterprises as holding
the potential to fill the 'governance gaps' which Professor Ruggie
has highlighted. However the guidelines are excessively vague
and National Contact Points (NCP) only have partial investigative
powers and no power to remedy. Although a complaint has now been
filed to the UK NCP, it is not expected that it will lead to a
satisfactory remedy of human rights violations, in this case,
through the cessation of mining and refining activities in the
area.
28. In the case of Vedanta there are also
currently significant barriers to seeking redress through the
UK courts:
— any claim would most likely be unsuccessful
because of technical difficulties in proving the UK parent company's
legal responsibility for its subsidiary's activities;
— the process would be prohibitively costly
and complicated for claimants; and
— a UK court would only be able to order
the company to pay damages to the victims, a resolution which,
in the case of the Orissan communities affected by Vedanta, is
not the desired outcome.
A COMMISSION FOR
BUSINESS HUMAN
RIGHTS AND
THE ENVIRONMENT
29. As John Ruggie has stated, there is
"no single silver bullet"[76]
to solve the current institutional problems relating to business
and human rights. However this does not mean that ambitious solutions
should not be sought. Whilst some of these might be found at an
international level, state governments, especially those of economically
powerful home states have a duty to put in place the best possible
mechanisms to ensure the protection of human rights by business,
whether operating at home or abroad.
30. ActionAid, along with partners in the
CORE Coalition, favours the establishment of a Commission for
Business and Human Rights and Environment within the UK. Such
a Commission, if established with a strong mandate and effective
powers, could help remedy many of the gaps in the current business
and human rights framework highlighted in this submission. The
Commission could act as a centre for business and human rights
to promote best practice and investigate claims of corporate abuse.
Unlike current investigative bodies, it could also settle disputes
between companies and alleged victims of human rights abuse and
most importantly offer remedies, including financial settlements
and the power to order companies to alter their behaviour. A well-functioning
Commission would:
— provide a unified body to devise and
implement business and human rights policy to ensure coherence
and focus;
— provide regulatory standards that companies
must universally meet, avoiding the short-comings of voluntarism;
— have powers and budget to thoroughly
investigate claims of corporate abuse, including having the power
to access company documents and witness statements;
— ensure parent companies' responsibility
for the activities of subsidiaries and third parties over which
the company has significant control or leverage;
— provide an affordable and accessible
non-judicial mechanism for victims of corporate abuse to seek
effective redress; and
— Make UK companies world leaders in doing
business ethically.
30 April 2009
61 UNHRC "Protect, respect and Remedy: a
Framework for Business and Human Rights" 2008 p7 Back
62
ibid. p9 Back
63
ibid p9 Back
64
HM Government "Corporate Responsibility Report"
2009 p5 Back
65
ibid p5 Back
66
Ibid p5 Back
67
The Independent Global brands learn to mind gap in public
mood on ethical trade 20th May 2005 Back
68
HM Government op. cit. p14 Back
69
E.g. The UK's involvement with the ILO is managed by DWP,
DFID provides support for the Ethical Trading Initiative and the
FCO has helped established initiatives such as the Voluntary Principles
on Security and Human Rights in the Extractive Industries. Back
70
http://www.vedantaresources.com/sustainable-development.aspx Back
71
Vedanta "Sustainable Development Report 2008: Enduring
Value Through Values" 2008 p38 Back
72
ActionAid Vedanta Cares?: Busting the myths about Vedanta's
operation in Lanjigarh, India 2007 p9 Back
73
Central Empowered Committee (CEC) 2005: Report in IA no.
1324 regarding the alumina refinery plant being set up by
m/s Vedanta Alumina Limited at Lanjigarh in Kalahandi district,
Orissa, 21.09.05, section 7 (iii) Back
74
LSE and CORE The Reality of Rights: Barriers to accessing
remedies when business operates beyond borders 2009 Back
75
LSE and CORE op. cit. p28 Back
76
UNHRC op. cit. p4 Back
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