Memorandum submitted by Business in the
Community
INTRODUCTION
The Joint Committee on Human Rights has issued
a call for evidence on the subject of business and human rights.
Business in the Community (BITC) has an established record on
working with our member companies on human rights issues in the
UK and overseas and welcomes the opportunity to respond to the
call for evidence on what is a vitally important issue to address
if we are to build greater confidence and trust in business. This
paper sets out BITC's current thinking on the issue of business
and human rights which we continue to research. Business in the
Community has not sought to respond to every discussion point
in the call for evidence, but has concentrated its response to
those areas where it has relevant experience and expertise.
BUSINESS IN
THE COMMUNITY'S
APPROACH
Business in the Community works to inspire,
engage, support and challenge companies on responsible business
to continually improve their positive impact on society. Membership
of Business in the Community is an active commitment. Our 850+
members recognise the relationship between their company's values
and responsible business practice and the role this plays in creating
wealth, building trust and addressing social need.
Our robust, relevant and integrated approach
to responsible business provides a clear framework to address
new challenges and improve business performance. We work across
four impact areas: marketplace, workplace, environment and community,
with business leadership sitting at the heart of our approach.
Six key overarching principles run through Business
in the Community's work and underpin our public voice:
— support for sustainable development:
"development that means the needs of the present without
compromising the ability of future generations to meet their own
needs";
— recognition of the mutuality between
business and society;
— conviction that progress in achieving
higher standards of corporate responsibility will best be achieved
through a voluntary approach, rather than regulation, where possible;
— different indicators of success in corporate
responsibility have different levels of materiality in each company
as expectations can reasonably vary by business size, sector and
location;
— business, by and large does good by virtue
of the goods and services provided and how it does it: creating
wealth, enabling economic stability, providing opportunities for
employees, suppliers and customers, as well as paying tax; and
— belief that excellent understanding of
communities from which a business draws its customers and employees
makes it more effective and profitable.
BACKGROUND
Business in the Community's work on business
and international human rights goes back to the Business Impact
Task Force established in 1998 and its final report "Winning
with Integrity" (2000).i Our work on Human Rights issues
in the UK has been advanced by our Workplace team, which has launched
campaigns on race and gender equalityii and health & well-beingiii,
as well as our Marketplace team, which first launched in 2006 the
Marketplace Responsibility Principlesiv taking a supply chain
view of human rights issues. In 2008 we launched the Voluntary
Code of Practice on Employing Migrant Workers/Overseas Staff in
Great Britain.v
Despite this, until recently, confusion has
continued around the extent of business's responsibilities internationally.
Some argue this has clouded the issue preventing constructive
action. The debate around the applicability of specific rights
to business and the extent of the obligations to respect and protect
has now been clarified by the work of Professor John Ruggie the
UN Special Representative on Business and Human Rights. BITC welcomes
the work of Professor Ruggie in his framework Protect, Respect
and Remedy (2008)viand considers there is now a great opportunity
to move the agenda forward and look at practical ways to improve
business's impacts on human rights.
IMPACT OF
BUSINESSES ON
HUMAN RIGHTS
The impacts of business, positive and negative,
are far reaching. Globalisation, and a trend towards the privatisation
of many key services previously provided by government, has seen
an increase in the potential impact on human rights of multinational
corporations. While the primary responsibility for human rights
still lies with the state, this has led to calls by a diverse
range of stakeholders for greater business accountability on human
rights issues throughout global supply chains.
As the role of business in society has grown,
human rights benefits have been derived in many locations through
job creation, economic regeneration and growth. This has seen
improvements, particularly in respect of social and economic rights,
such as adequate standards of living for many people throughout
the world.
Many businesses have taken steps to improve
access to healthcare or medicines for their employees. Some businesses
have also taken a more proactive role in respect of civil and
political rights. One such example is the Co-operative Bank which
through the operation of its Ethical Policy, refuses to provide
finance to businesses that advocate discrimination and incitement
to hatred or are involved in the manufacturer or transfer of armaments
to oppressive regimesvii. Such examples demonstrate that the considerable
global power of business, when harnessed responsibly, can help
support and enhance human rights.
However, BITC also recognises that the lack
of accountability of some businesses has led to abuse of human
rights, particularly in countries that have weak governance structures
where governments are unable or unwilling to hold corporations
accountable. The current difficulties around accountability are
explored in CORE & LSE's recent report The Reality of Rights:
Barriers to accessing remedies when business operates beyond bordersviii.
At the most severe end of the scale businesses have been accused
of complicity in killings and torture, but as John Ruggie's Framework
points out business can affect the full spectrum of human rights
both positively and negatively.
Awareness within business about human rights
is now growing thanks to the work of a wide range of organisations
including the Business & Human Rights Resource Centre, CORE,
Realizing Rights, initiatives such as the UN Global Compact, as
well as the new accountability that the growth of internet communications
is delivering. BITC's CR Index, the UK's leading voluntary benchmark
of corporate responsibility, helps companies to integrate and
improve responsibility throughout their operations by providing
a systematic approach to managing, measuring and reporting on
business impacts in society and on the environment. There is therefore
a growing recognition within business that human rights is a vitally
important issue that will only grow in significance. This is reflected
in the growing number of companies that have specific policies
on human rights as tracked by the Business and Human Rights Resource
Centre.
GUIDANCE & SUPPORT
TO BUSINESS
ON HUMAN
RIGHTS
Fostering a corporate culture which respects
human rights was highlighted by John Ruggie as an important component
of the state duty to protect human rights. The government has
made some inroads in this respect. John Ruggie's report noted
introduction of s172 in the Companies Act 2006 as a
positive step. S172 obliges a company to consider the interests
of employees as well as the impact of the company's operations
on the environment and community. This clearly communicates to
business that their responsibility is not to increase returns
for shareholders at any social cost.
Many companies are now developing human rights
policies. Business setting down its commitment to human rights
is undoubtedly a positive step and should be further encouraged
by the government and civil society. However BITC is mindful that
policies need to be lived by the whole business to be effective.
The integration of human rights considerations into core business
will be challenging for many companies particularly those with
decentralised structures and considerable support will be required
to achieve this ends. BITC believes that in addition to challenging
business, celebration of success is also an important factor in
changing behaviour. BITC runs the UK's leading corporate responsibility
awards programme—Awards for Excellence—recognising
those companies which have shown innovation, creativity and a
sustained commitment to corporate responsibility. This includes
an International Award.
John Ruggie's Framework points out that leadership
within business is central to ensuring integration of human rights
considerations throughout a company. It is therefore essential
that buy in from business leadership on this issue is achieved.
Collaborative, industry initiatives on human
rights can help make significant progress on sector specific human
rights issues. Examples include the Kimberley Process, the Electronics
Industry Code of Conduct and the International Council on Mining
and Metals. Such initiatives have considerably raised the profile
of human rights issues within business and sought to establish
practical tools to improve business performance. Unfortunately
UK/EU competition law currently appears to hinder business collaboration
in some areas that would be in the public interest, including
human rights. BITC therefore considers that this barrier should
be better understood and addressed.ix In contrast Australian competition
law provides a mechanism for the prior "authorisation"
of collaborative agreements between companies.x
We would recommend the Joint Committee explores
the following issues and ideas:
1. Issue mapping and transparent reporting is
important in helping businesses establish their impacts and ensure
they are taking the appropriate due diligence steps. Businesses
should be encouraged to carry out human rights impact assessments
and report their material human rights impacts. Guidance from
Government working with relevant advisory bodies would be helpful
on what businesses reporting should cover depending on their size,
location and sector.
2. A wide range of existing organisations, are
well placed to offer support to businesses as they seek to introduce
reporting and improve their business processes. Strategic partnerships
between government and civil society should be encouraged to pool
expertise. Investment in intermediary organisations such as trade
bodies and NGOs including BITC can ensure dialogues on the business
and human rights agenda are convened and business leaders are
mobilised.
3. Funding must be sufficient and sustained for
government departments and quangos such as the Department for
International Development (DFID) and the Equalities and Human
Rights Commission, which are currently supporting human rights
efforts.
4. The Government should seek to utilise its
purchasing power to improve human rights through all public procurement
both in the UK and abroad. Through its broader monitoring and
watchdog functions the Sustainable Development Commission (SDC)
may also have a role to play in advancing human rights, particularly
in public sector procurement at the workplace.
5. An area of concern highlighted by Professor
Ruggie has been the negative consequences of bilateral investment
treaties that fail to correctly balance the need to provide adequate
protection to foreign investors with the host state's need to
protect and promote human rights. The Government should ensure
that investor protections are pursued in a way that does not hinder
a host state's ability to improve human rights. Further investors
should be encouraged not to adopt stabilization clauses in investment
contracts which secure exemptions from new legislation concerning
human rights or entitle it to compensation if such legislation
is introduced.
6. The Government can directly impact human rights
through ensuring the Export Credit Guarantee Department carries
out human rights impacts assessments and factors human rights
considerations into finance decisions. Professor Ruggie's recent
report Business and human rights: Towards operationalizing
the "protect, respect and remedy" frameworkxi highlights
the practice of some states of linking export credit to: "…companies
having a CSR Policy, participating in the United Nations Global
Compact, or confirming their awareness of the OECD Guidelines."
7. Initiatives such as the Kimberley Process
should be encouraged and supported by the government where possible.
The Government should also take steps to ensure that any voluntary
collaborative action which raises human rights standards is not
deterred by UK/EU competition law.
GRIEVANCE MECHANISMS
Company level grievance mechanisms were highlighted
by John Ruggie as part of the corporate responsibility to respect
human rights. Through tools such as BITC's CR Index we encourage
business to voluntary adopt internal systems and build the capacity
to engage with stakeholders proactively. The establishment of
structures in more businesses to deal with the grievances of wider
stakeholders would greatly benefit not only those that take issue
with the operating behaviour of a company but would also be beneficial
to business in terms of risk management and stakeholder engagement.
BITC would like to see the Government working with NGOs to encourage
and support business to improve stakeholder relations and set
up independent internal mechanisms that deal with human rights
concerns proactively.
The UK has established one of the leading OECD
National Contact Points (NCP); in the last two years the UK NCP
has made significant headway in increasing corporate accountability.
In particular there have been groundbreaking decisions in which
the NCP found companies in breach of the OECD Guidelines for Multinational
Enterprises. Although the NCP cannot pass a binding judgment,
its decisions have still had considerable impact. This was demonstrated
when it helped broker a deal between G4S and UNI in response to
a complaint brought under the Guidelines in 2006. The actions
of the UK NCP have helped increase the standing of the UK internationally
and increased our competitiveness by reducing the reputational
risk for those investing in UK-based companies. BITC considers
it vital that the recently increased resources of the NCP is maintained
going forward.
There are increasing calls from a wide range
of stakeholders for the establishment of a body with powers to
address human rights abuses committed by UK companies abroad.
In particular CORE has proposed a UK Commission for Business and
Human Rights and the Environment.xii BITC agrees that accountability
for serious corporate human rights abuses overseas needs to be
increased. However, BITC considers that research is needed into
the economic impact of limiting such a body to UK companies and
the potential benefits for business and society. A European wide
or global body would ensure a level playing field was maintained
and would remove the risk of divestment from the UK. While BITC
acknowledges that securing international support and agreement
for such a project would be difficult, a European wide agreement
should be easier to achieve particularly with current demands
for enhanced business accountability. We note that the European
Commission is in the process of commissioning research in this
area and will read its conclusions with interest.
REFERENCES
i "Winning with Integrity—Human Rights"
(2000), Business in the Community/IBLF,
http://www.bitc.org.uk/document.rm?id=5459
ii Race for Opportunity (http://www.bitc.org.uk/workplace/diversity_and_inclusion/race/index.html)
and Opportunity Now
(http://www.bitc.org.uk/workplace/diversity_and_inclusion/gender/opportunity_now/)
iii Business Action on Health, http://www.bitc.org.uk/health
iv "Marketplace Responsibility Principles"
(2006/8), BITC, http://www.bitc.org.uk/resources/publications/blank_1_1.html
v "Voluntary Code of Practice on Employing
Migrant Workers/Overseas Staff in Great Britain" (2008),
BITC, http://www.bitc.org.uk/princes_programmes/rural_action/migrant_workers.html
vi Protect, Respect and Remedy: a Framework for
Business and Human Rights, Report of the Special Representative
of the Secretary-General on the issue of human rights and transnational
corporations and other business enterprises, John Ruggie, A/HRC/8/5,
7 April 2008
vii http://www.goodwithmoney.co.uk/ethical-banking/
viii "The Reality of Rights: Barriers to
accessing remedies when business operates beyond borders"
(2009), LSE/CORE, http://www.lse.ac.uk/collections/enterpriseLSE/pdf/reality_of_rights.pdf
ix "Response to Conservative Party Commission
on Waste and Voluntary Agreements" (2008), http://www.bitc.org.uk/document.rm?id=8579 and
"Response to Liberal Democrats Consumer Policy Consultation
Paper" (2009), http://www.bitc.org.uk/document.rm?id=9145
x "Authorisations and notifications—a
summary" (2007), Australian Competition and Consumer Commission,
http://www.accc.gov.au/content/index.phtml/itemId/776052
xi Business and human rights: Towards operationalizing
the "protect, respect and remedy" framework Report of
the Special Representative of the Secretary-General on the issue
of human rights and transnational corporations and other business
enterprises, John Ruggie A/HRC/11/13, 22 April 2009
xii "Filling the Gap: a new body to investigate,
sanction and provide remedies for abuses committed by UK companies
abroad" (2008), Jennifer A. Zerk, A report prepared for the
Corporate Responsibility (CORE) Coalition, http://www.corporate-responsibility.org/module_images/Filling%20the%20Gap_dec
08.pdf
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