Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents

Memorandum submitted by ActionAid UK


  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.


  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.


  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.


  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.


  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 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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