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Reports | Tuesday July 9, 2019

Key Considerations in Managing ESG through a Merger

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We are living through a time of tremendous external disruption, technological innovation, and increased political, social, and climate risk. As a result of this ongoing disruption, we are seeing increased mergers and acquisitions (M&A) activity as companies seek to buy into the latest innovation, to disrupt the competition—or to prevent being disrupted by the competition.

Mergers and acquisitions can have a huge impact on the state of environmental, social, and governance (ESG) affairs for the companies involved. At a time when employees and customers are calling for companies to take stands on social issues and investors, like BlackRock’s Larry Fink, are stressing the value of “purpose,” a company’s ESG performance is more important than ever.  Companies can and should strive to integrate ESG considerations throughout the M&A process from initial due diligence through implementation after the merger.

BSR has developed this primer to help Chief Sustainability Officers (CSOs), their teams, and internal allies navigate the M&A process to leverage and enhance ESG-related programs and priorities.

Blog | Monday July 8, 2019

Five Legal Trends Affecting Business and Human Rights

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From working conditions in their global supply chains to ethical use of their products, companies have a lot to consider when it comes to protecting human rights. And while the UN Guiding Principles on Business and Human Rights (UNGPs) provides a framework for the private sector to assess their impacts, national laws regarding how business should address human rights vary widely from country to country.

This inconsistent nature of national government-level approaches to protect human rights is just one factor—along with the climate crisis and technological disruption—that companies, particularly multinational corporations, must contend with in today’s new climate for business.

Like many challenges, the question of how business should address human rights is one that benefits from collaboration—which is why BSR established the Human Rights Working Group (HRWG) in 2012. The collaborative initiative seeks to help companies implement the UNGPs by providing operational-level guidance and bringing together a global community of business and human rights professionals. The spring meetings of HRWG, held in New York, London, and Tokyo, brought together representatives from 40 companies across sectors to connect over the field’s most pressing issues.

Over the course of the spring meetings, HRWG’s discussion covered topics ranging from children’s rights to the risks of doing business in disputed territories, as summarized in Human Rights Insights: Trends from the Human Rights Working Group’s Spring Meeting, which was published today.

One topic that highlighted the challenge of inconsistent approaches by national governments to issues of business and human rights was emerging legal trends in human rights. The Working Group delved into the following trends:

• Vedanta Lawsuit and Supply Chain Responsibility: Regardless of industry, multinational corporations with global subsidiaries should take note of the U.K. Supreme Court’s ruling in the lawsuit against British mining company Vedanta Resources, which deemed that the U.K.-based parent company could be sued for harms allegedly caused by their subsidiary.
• Modern Slavery and Human Rights Due Diligence: More and more, countries are considering or adopting laws that will require all businesses to conduct rigorous due diligence of their operations and supply chains.
• Discrimination Laws: Globally, there has been an increase in laws that prohibit discrimination. This is particularly salient for companies with global operations as countries that didn’t previously have laws relating to issues like gender discrimination are increasingly adopting and enacting them.
• Labor Protections: Protections for gig economy workers are weakening in many markets. Ride-sharing apps have been sued by their drivers to be considered employees instead of independent contractors in order to access better protections.
• Privacy:  Privacy is increasingly an issue of concern for business, particularly those who have access to, and thus must protect, sensitive data from users and customers.

As countries’ concern for human rights changes, so will the legal landscape—as will the operating environment for business. Meetings of the HRWG are a unique space in which business and human rights professionals from companies of all industries can come together to discuss such pressing and emerging issues in the field. The global community fostered by this collaboration leads not only to knowledge sharing, but it also enables individuals to bring back key learnings to their own companies and inform business strategy.

BSR members interested in joining the Human Rights Working Group should not hesitate to reach out and connect with us.

Reports | Monday July 8, 2019

Human Rights Insights: Trends from the Human Rights Working Group’s Spring Meeting

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In March and April 2019, BSR’s Human Rights Working Group (HRWG) held its first round of meetings for the year in New York, London, and Tokyo. Established in 2012, HRWG is a collaborative initiative designed to help companies implement the UN Guiding Principles on Business and Human Rights (UNGPs), bringing together approximately 40 companies from across sectors. In addition to providing operational-level guidance and best practices in the business and human rights field, HRWG has established a global network of business and human rights professionals. The spring meetings covered a mix of substantive and methodological topics:  

• Human rights methodologies 
• Children’s rights 
• Legal trends
• Risks of doing business in disputed territories 

BSR member companies interested in joining the Human Rights Working Group should connect with us to learn more.  

Blog | Tuesday July 2, 2019

Scaling Impact: Tech Against Trafficking Launches Accelerator Program

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There are few facets of modern life that are untouched by technology. Innovations in the industry have changed the way we communicate, the way we work, the way we conduct commerce, and the way we address global issues like human trafficking and modern slavery.  

Modern slavery is a complex, thriving crime with a global foothold, affecting an estimated 40.3 million people. It manifests in a myriad of different forms, necessitating a wide range of increasingly creative responses and preventive approaches. Against this context, a coalition of technology companies have joined the collaborative initiative Tech Against Trafficking, for which BSR serves as the Secretariat and the RESPECT Initiative, comprised of Babson College’s Initiative on Human Trafficking and Modern Slavery, the International Organisation on Migration (IOM), and the Global Initiative Against Transnational Organized Crime, as Research Lead. 

To further Tech Against Trafficking’s work, the collaborative initiative recently launched an Accelerator Program, which aims to identify promising uses of technology in the anti-trafficking field and to harness the expertise and resources of member companies to advance and scale the work of the organizations deploying technology to assist victims, law enforcement, business, and civil society.  

Companies including Amazon, AT&T, BT, Microsoft, Nokia, Salesforce.org, and Vodafone aim to provide technical expertise, network access, mentorship, and training and educational components to accelerate the growth and impact of the organizations participating in the Accelerator.  

Tech Against Trafficking and its member companies have invited two organizations deploying innovative technology solutions to participate in their initial Accelerator Program, which is set to launch July 2019:  

• Counter-Trafficking Data Collaborative: The Counter-Trafficking Data Collaborative (CTDC), an initiative of the International Organization for Migration (IOM), is a global human trafficking data hub, publishing harmonized data from counter-trafficking organizations around the world. The goal is to reduce barriers to information-sharing and provide a mechanism for organizations to get data to public and policy audiences. In addition, CTDC helps to build a more complete picture of counter-trafficking trends based on up-to-date, reliable, and standardized data on human trafficking. CTDC hopes to further develop its partnership engagement process and continue to explore and promote best practices around data anonymization, privacy, and security. 
• Unseen UK: Unseen operates the UK Modern Slavery Helpline and Resource Centre. In 2017, Unseen worked with partners to develop the Unseen UK App to make reporting to the UK Modern Slavery Helpline easier. It was designed to help the police and modern slavery groups understand how to respond to cases or suspected cases of human trafficking, create greater awareness on the issue, inform individuals on how to identify signs of exploitation, and report situations of concern. Unseen hopes to scale the impact of the app, while continuing to expand their efforts to create a Pan-European Victim Case Management System for organizations providing services in the anti-trafficking sector. 

“We are delighted to have been chosen as one of the charity partners to benefit from the experience, tools, and skills afforded through Tech Against Trafficking,” stated Justine Currell, director at Unseen UK. “Developing our technological capabilities to better educate the public, law enforcement, and businesses—and reach more potential victims to get them the help they need through the Unseen App—is invaluable. Technology is the key to providing enhanced services to potential victims, and maximizing the data collated through the Helpline and the Victim Case Management System helps us to better support prevention activities. We are extremely excited to see the real difference we can make to those who are being abused and exploited through our collaboration with Tech Against Trafficking’s Accelerator Program.” 

Harry Cook, data management and research specialist at IOM and lead of the CTDC, added, “A lack of good evidence has long hampered counter-trafficking efforts. The prospect of what can be achieved by bringing together the capacity and expertise of the counter-trafficking community and the private sector is exciting.” 

Tech Against Trafficking plans to leverage collective resources to ensure that tech tools are deployed for preventing and combatting trafficking, keeping the most vulnerable populations safe, and ensuring human rights are protected in both the digital and analog worlds. 

The two organizations were invited to join the Accelerator following a research and assessment process that considered over 200 technology tools being used to combat human trafficking. Following an initial evaluation which considered public information on each tool’s impact, scalability, sustainability, interoperability, and effectiveness against their own self-stated goals, the two organizations above were selected to move forward with the first iteration of the Accelerator. Tech Against Trafficking is grateful to CTDC and Unseen UK for their collaboration during this pilot and their support honing in on a model that can be built upon over time. 

Tech Against Trafficking plans to leverage collective resources to ensure that tech tools are deployed for preventing and combatting trafficking, keeping the most vulnerable populations safe, and ensuring human rights are protected in both the digital and analog worlds. The intention is also to share learnings and outcomes from this pilot Accelerator with the broader anti-trafficking community.  

Blog | Monday July 1, 2019

Eliminating Violence and Harassment Just Became an Obligation for Businesses Worldwide

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On June 21, 2019, the International Labour Organization (ILO) voted overwhelmingly to adopt a Convention on the Elimination of Violence and Harassment in the World of Work. This represents an important step forward on strengthening protections for all workers around the world against violence and harassment.

Business should see the adoption of the Convention as a signal that:

• It’s time to recognize the stark reality that far too many people—primarily women—continue to experience violence and harassment in the world of work.
• Stakeholder expectations have changed radically for how companies should not only respond to workplace violence and harassment, but also actively work to prevent it from happening in the first place.

For the first time, there is an internationally agreed-upon standard and guidance for addressing violence and harassment in the world of work, setting a high bar for companies and governments on their responsibilities to manage this critical issue. The treaty includes many categories of workers: corporate employees, workers in factories and farms across global supply chains, informal workers, and job seekers. The Convention also looks beyond the walls of the workplace, recognizing there are risks of abuse throughout the “world of work,” e.g., when commuting to and from work.

While the specific applications to businesses will depend on the country and type of business in question, the overall message is clear: More—much more—is expected from businesses when it comes to tackling violence and harassment. Here’s how companies can take action using BSR’s “Act, Enable, Influence” framework:

ACT

Companies can act on this issue by developing programs, policies, services, and products that contribute to ending sexual harassment. A first step for companies is to assess their current efforts on gender-based violence and harassment across their value chains. BSR has developed a tool, in line with the new ILO Convention, to help companies to understand their current gaps in the following three areas:   

• Policies: The Convention identifies workplace policies addressing harassment and violence as part of an employer’s responsibilities. The Recommendations accompanying the Convention include additional guidance on what should be included, such as measures to protect whistleblowers and information on complaints procedures.
• Risk identification and assessment: The Convention requires employers to identify hazards and risks of violence and harassment. One way for businesses to approach this is to ensure that their human rights due diligence fully integrates gender considerations, as outlined in the new report from the Office of the United Nations High Commissioner for Human Rights (OHCHR), Gender Dimensions of the Guiding Principles on Business and Human Rights.
• Trainings: The Convention asks employers to provide information and training for workers on violence and harassment and to take specific measures for sectors and roles where “exposure to harassment is more likely.”

BSR’s tool helps companies to conduct a thorough analysis of these and other areas and to assess opportunities to improve their practices.

Companies can enable business partners to tackle harassment and violence by collaborating with them to introduce appropriate measures.

ENABLE

Companies can enable business partners to tackle harassment and violence by collaborating with them to introduce appropriate measures. This is especially critical in supply chains for garments, agriculture, and other light manufacturing, which employ large numbers of vulnerable workers. Increasingly, evidence shows that violence and harassment is widespread in these sectors and across sourcing countries, with women workers particularly vulnerable.

• Many companies are already taking steps to address violence and harassment in supply chains with BSR’s HERrespect program, a leading initiative that connects global brands with their suppliers to implement workplace-based programs. HERrespect takes a comprehensive approach, working with female and male workers and managers to cultivate more cooperative and gender equitable relationships. HERrespect programs also strengthen the ability of workplaces to respond effectively when abuse occurs. Following pilots in Bangladesh, Ethiopia, India, and Kenya, this tried-and-tested program has confirmed its potential for impact and is ready to scale up. To learn more, please register for a HERrespect webinar on July 17 here (Asia/EMEA) or here (EMEA/U.S.).  
• Companies are also collaborating with peers through networks such as Business Action for Women and HERproject to tackle the complex issues of gender-based violence throughout their operations and to partner on designing and implementing new solutions.
• Business Fights Poverty has created a challenge on: “What role can business play in tackling gender-based violence?” Through this, Business Fights Poverty and partners have gathered resources to help build the business case for action and case studies of good practices. More information will be released on this site throughout the year.

With their brand credibility, marketing expertise, reach, and access to key influencers, companies can be uniquely positioned to shift harmful social or gender norms.

INFLUENCE

Businesses can also use their advocacy efforts and communications strategies to influence the wider community to address harassment and gender-based violence.

• With their brand credibility, marketing expertise, reach, and access to key influencers, companies can be uniquely positioned to shift the harmful social or gender norms that often contribute to the acceptance of violence and harassment against women. The recent advertisement from Gillette is a great example of this strategy: Through a commercial, the company opened an important conversation on toxic masculinity.
• Companies can also work with governments and advocate for strong protections for women workers as public officials work to put in place the various laws and policies mandated through the new ILO Convention.

BSR members looking to strengthen their policies on violence, harassment, and women’s empowerment should connect with our team. In addition, we will be hosting a webinar in the fall to explore the new ILO Convention in more depth with our partners from Business Fights Poverty and CARE—registration is open here.

Blog | Wednesday June 26, 2019

Human Rights Policy Engagement: The Role of Companies

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Companies around the world have embraced the UN Guiding Principles on Business and Human Rights (the Guiding Principles), which have catalyzed new efforts to ensure respect for human rights across business operations and beyond. However, in recent decades, there has been a global reversal of these human rights achievements, including governments pulling back from longstanding commitments and the closing of space for civil society to operate safely. This presents a new climate for business with new challenges in many parts of the world.

In this environment, it is increasingly important for business not only to maintain its commitments to respect human rights, but also to find new ways to support the work of governments for such efforts.   

Over the past year and a half, BSR has engaged with several companies to explore such opportunities as part of our Business Action Platform for Human Rights. At the conclusion of this effort, we are pleased to share our latest report, Human Rights Policy Engagement: The Role of Companies. In it, we highlight why now, more than ever, it is important for businesses to use their influence to stand up for human rights policies, institutions, and frameworks around the world—their loss or reversal would have negative consequences not just for businesses, but for the communities and societies in which they operate.

The reversals of human rights policies, institutions and frameworks, particularly over the last two years, can be felt around the world. From the rise of right-wing nationalist movements to threats against the United Nations’ human rights bodies, these reversals have undone many of the achievements built through bipartisan support over the last several decades, achievements that have benefited the private sector in many ways. Businesses rely on such policies, institutions, and frameworks in a variety of ways, including access to more stable markets through improved rule of law and more consistent application of international standards. Support for such measures is not only aligned with business priorities, it also helps companies align their values and actions with those of their employees, who are increasingly demanding that their employers reflect their values not just in their business operations, but in the ways in which they engage on policy issues, both domestically and internationally.

As some governments retreat from their duty to protect human rights, and in some cases actively degrade human rights protections, companies can and should fill this void where possible. 

As some governments retreat from their duty to protect human rights, and in some cases actively degrade human rights protections, companies can and should fill this void where possible. Not only is doing so in the interest of a business’s bottom line, it is in line with the human rights and sustainability commitments many companies have made.

For companies looking to engage on these important policy questions, this report lays out in detail the following five steps companies can take in order to gain buy-in internally and externally and also to improve the chances of a successful engagement.

1. Identify the business relevance of the impacted policy
2. Identify the intangible benefits, such as alignment with corporate or employee values
3. Assess a company’s ability to have an impact on the policy issue at hand and focus on identifying where a company has leverage
4. Understand the political context – is this a situation in which the government with which you are engaging is actively opposed to the policy in question?
5. Navigate tradeoffs to understand what internal and external barriers exist and what the impact of failing to engage could be

While there may be some barriers to engagement, they can and should be overcome: Engaging on these topics is essential in order to protect the human rights institutions, policies, and frameworks that have supported businesses.

Companies should recognize that these institutions, policies, and frameworks have helped them establish a foothold in developing nations by creating a more level playing field, strengthening the rule of law, and establishing more business-friendly environments. As companies engage on these topics, they will not only gain important reputational benefits with key stakeholders for defending human rights within their spheres of influence, but they will also help ensure that the institutions, policies, and frameworks that help them do business around the world are defended and maintained, as envisioned by the Guiding Principles.

In a world in which governments are withdrawing from their duty to protect human rights, it is more important than ever for business to step up. Business cannot and should not replace government’s role; neither can it play its role effectively if governments are in retreat. In this context, we hope companies will utilize Human Rights Policy Engagement: The Role of Companies as a resource and a prompt on how to stand up for fundamental human rights policies wherever they may do business.

Reports | Wednesday June 26, 2019

Human Rights Policy Engagement: The Role of Companies

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Companies around the world have embraced the UN Guiding Principles on Business and Human Rights (the Guiding Principles), which have catalyzed new efforts to ensure respect for human rights across business operations and beyond. However, in recent decades, there has been a global reversal of these human rights achievements, including governments pulling back from longstanding commitments and the closing of space for civil society to operate safely. This presents a new climate for business with new challenges in many parts of the world.

In this environment, it is increasingly important for business not only to maintain its commitments to respect human rights, but also to find new ways to support the work of governments for such efforts.   

Over the past year and a half, BSR has engaged with several companies to explore such opportunities as part of our Business Action Platform for Human Rights. At the conclusion of this effort, we are pleased to share our latest report, Human Rights Policy Engagement: The Role of Companies. In it, we highlight why now, more than ever, it is important for businesses to use their influence to stand up for human rights policies, institutions, and frameworks around the world—their loss or reversal would have negative consequences not just for businesses, but for the communities and societies in which they operate.

Blog | Thursday June 20, 2019

Business and Human Rights Consultation Meeting on Country-Specific Action Plans (Japanese)

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Blog | Wednesday June 19, 2019

Is Stakeholder Engagement the Key to Successful Community Standards?

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Building stakeholder trust has become a core goal for corporate executives. With some of the biggest investors publicly challenging corporations to think beyond short-term financial goals, companies are working to map, anticipate, and respond to concerns across societal interest groups.

This task daunts most companies, not least global social media platforms such as Facebook, YouTube, and Twitter. These platforms seek to calibrate and reflect societal views, but in the process, they have become powerful actors that dramatically affect the trajectory and impact of popular expression. How they set and implement content policies on issues such as terrorism, hate speech, and political and religious extremism has directly impacted the lives of billions of people in hundreds of countries. Today, there is a consensus that technology platforms should no longer make high-stakes decisions without granting the public structured visibility and input.

Ongoing debates about leadership, governance, and regulation of social media are highly relevant to any stakeholder engagement discussion. The public will not differentiate an organization’s approach to content standards from its view of the organization’s overall behavior. But even a transformation of the regulatory and competitive environment for social media platforms will leave open the question of how best to set and implement content policies in the best interest of society—and what that interest is. There are no easy answers. How, for example, is freedom of expression to be protected without undermining privacy?

BSR has provided independent advice to Facebook on stakeholder engagement relating to its content policies (named “Community Standards”). Our work is based on our five-step methodology and our belief in the importance of proactive stakeholder engagement strategy. It suggests some principles for engagement by social media platforms that could help set direction for more long-term solutions, such as Social Media Councils.

Given the human rights impacts of social media platforms, it is important to prioritize the voices of such vulnerable groups as rights defenders, political dissidents, women, young people, minorities, and indigenous communities.

Why engage?

Engagement is needed to proactively identify areas in which content policies, newsfeed prioritization, and algorithms driving ads need to evolve to meet user expectations, social norms, and international standards—both to identify new issues that haven’t been explored and to revise policies on known issues as they evolve. Further engagement must then balance and resolve diverse perspectives on contentious topics which, given the near-universal reach of social media, could conceivably cover every issue of interest to any stakeholder anywhere in the world. To align with human rights and sustainability frameworks, engagement principles must be transparent, comprehensible, and consistent, even as issues play out in radically disparate ways across different geographic contexts.

Who is a stakeholder?

For most companies, stakeholder mapping involves categorizing stakeholder groups—typically investors, regulators, customers, suppliers, civil society organizations, and relevant communities. For social media platforms, however, the stakeholder landscape poses unprecedented challenges of scale, diversity, and complexity. Consider impact and representation: Beyond contemplating billions of users (itself a task of gigantic scale), social media platforms also need to consider “rightsholders”—employees, contractors, customers, and individuals whose images or words are shared even when they are not platform users. Given the sheer number and diversity of rightsholders, social media platforms need to locate organizations capable of speaking on their behalf. Depending on circumstances, rightsholders might be represented by civil society organizations, activist groups, or policymakers. How credibly any given stakeholder can represent a specific interest or opinion always requires deep analysis.

As a result of stakeholder mapping exercises, platforms will be able to evaluate gaps, seek expertise to fill them, and at least avoid uninformed attempts to balance a spectrum of views.

How should stakeholders be prioritized?

Unconscious biases, external pressures, and commercial incentives can easily foster approaches that fail to reflect the full range of effects on rightsholders. Given the human rights impacts of social media platforms, it is important to prioritize the voices of such vulnerable groups as rights defenders, political dissidents, women, young people, minorities, and indigenous communities.

Stakeholder mapping exercises need to begin with the landscape of contentious issues upon which to engage stakeholders. Terrorism, hate speech, sexual harassment, bullying, and disinformation are obvious examples, but new issues emerge constantly. For each issue, perspectives can be mapped across linguistic, geographical, and social identities, supplementing user data with academic expertise. This enables identification of representative organizations, should they exist. As a result of this mapping exercise, platforms will be able to evaluate gaps, seek expertise to fill them, and at least avoid uninformed attempts to balance a spectrum of views.

What is the best way to gather perspectives?

Social media platforms face strong incentives to transparently disclose their consultation processes—and the stakeholder perspectives they yield—but some vulnerable people and identity groups will prefer anonymity, for good reasons. While candid, one-on-one conversations with stakeholder can build trust, they are narrow in focus, extremely resource-intensive, and invite questions regarding overall balance and focus. Setting up groups according to geography or issue expertise is more efficient and can boost a platform’s analytical capacity, but groups are challenging to analyze and can develop blind spots. Given all this, a mix of approaches and formats is most appropriate.

Social media companies are beginning to experiment with advisory councils that typically comprise stakeholders that have a mature understanding of company policies and processes and can credibly represent interest groups or perspectives. This necessarily limits diversity and inclusivity, inviting allegations of elitism. The payment of honoraria to council members can be viewed as compromising their independence, but lack of compensation raises questions about exploitation of stakeholders and practical constraints on their ability to contribute. Setting standard industry practices and “arms-length” mechanisms would help to address this dilemma.

Facebook has proposed creating an independent oversight board to review the company’s most difficult decisions about content, and it is considering the board’s role with respect to content policy advice, too. This provides an additional channel for input, and Facebook will benefit from explaining how the board affects policy over time.

How should decisions be made and disclosed?

Intent on retaining accountability for their content decisions, social media platforms are unable and unwilling to outsource policy control. A key challenge they face will be to explain how—and why—collecting stakeholder views can and will inform their internal decision-making.

The platforms must also incorporate local political and social nuances without undermining their own global consistency; issues of origination and impact mean that setting national boundaries around content and opinion raises more questions than it solves. On highly contentious issues such as terrorism, hate speech, and incitement to violence, social media platforms need to credibly draw on existing academic expertise and then capture the range of values and opinion without defaulting to the median (or most commercially friendly) option. Human rights frameworks offer an appropriate reference point in that they take scale and severity of impact as a starting point and proceed to consider immediate, cumulative, and longer-term developments in navigating difficult trade-offs. For example, a decision to limit hate speech on a platform may protect vulnerable groups while having a detrimental long-term effect on democratic participation.

For now, the power to determine, promote, and limit content rests with a handful of companies that are both overwhelmingly powerful and keenly exposed to public anger. Rather than focusing on molding friendly legislation or reacting arbitrarily to the latest incident, social media platforms should continue to develop institutional approaches while steeling themselves to invite broader public participation.

Facebook is already posting minutes from its Content Standards Forum. As it works toward broader disclosure, the company should embrace full transparency of its positions and policy determinations and the relevant internal user data that informs them.

BSR’s work with Facebook raises questions, answers, and then more questions. What is clear is that in this rapidly evolving area, cross-industry and multi-stakeholder collaboration should become a priority. The prospect of effective external oversight from society remains nascent and contested. For now, the power to determine, promote, and limit content rests with a handful of companies that are both overwhelmingly powerful and keenly exposed to public anger. Rather than focusing on molding friendly legislation or reacting arbitrarily to the latest incident, social media platforms should continue to develop institutional approaches while steeling themselves to invite broader public participation.

Blog | Tuesday June 18, 2019

Human Rights, Access to Remedy, and Stakeholder Engagement

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The UN Guiding Principles on Business and Human Rights (UNGPs), released in 2011, provide the first coherent framework for how businesses should manage their human rights risks and impacts. The framework clearly specifies the responsibilities of government and business and outlines clear steps for business with regards to due diligence, oversight, and remedy. The Guiding Principles necessitate detailed engagement by companies with impacted stakeholders—part of a wider shift in the business community from considering risk to understanding societal impact.

In particular, stakeholder engagement is needed for: conducting any credible Human Rights Impact Assessment; seeking Free Prior Informed Consent from communities and other affected stakeholders before establishing mining, infrastructure, and energy operations; and providing remedy for any harmful human rights impacts.  

Indeed, effective remedy requires directly seeking the perspective of stakeholders who have been harmed. This entails, among others, identifying which stakeholders suffered what harm, from which business activities, and what the underlying root causes of the harm were. This also requires ensuring that affected stakeholders’ perspectives are central in the remedy discussions. All of these developments have been incorporated into BSR’s Five-Step Approach to Stakeholder Engagement, which aims to show how companies can initiate and sustain constructive relationships with stakeholders over time, throughout the organization, by engaging early and often—and acting based upon what they hear. In 2011, when the original report was published, our approach was driven by considerations of risk to the company. Now, we have revised our framework to incorporate central human rights concepts of vulnerability and impact.

Evidence suggests that businesses are still struggling to respond to this new environment. In 2018, the Corporate Human Rights Benchmark assessed 101 of the largest publicly traded companies in the world across agricultural products, apparel and extractives industries. The findings of the assessment depict a "deeply concerning" picture, with four in 10 companies "failing" on human rights.

The responsibility is on companies to follow the Guiding Principles in order to do business in a way that respects the human rights of workers, customers, and communities where they operate.

It is clear that there is still a significant gap between companies responding to allegations of harming human rights and actually engaging with the affected rightsholders to ensure that appropriate remedy is provided. The Benchmark found that less than half of the serious allegations of negative human rights impacts reviewed by the Benchmark resulted in meaningful engagement with the alleged affected rightsholders, and only three percent of the reviewed allegations were resolved by providing remedy that was satisfactory to the victims.

Effective remedy itself is comprised of the following five elements:

1. Restitution, which is intended to restore, to the extent possible, whatever has been lost to the victim preceding the harm.
2. Compensation, which is appropriate in cases where damage/harm to the victim can be economically assessed.
3. Rehabilitation, which covers medical or psychological care and social or legal services needed to restore the victim.
4. Satisfaction, which includes measures as a cessation of the violations.
5. Guarantee of non-repetition, which includes actions and measures to prevent further abuses or similar future violations.

Although stakeholder engagement is an underlying theme throughout the UNGPs, 60 percent of companies assessed in the Benchmark were unable to disclose their stakeholder engagement approach, with 38 percent of the companies unable to demonstrate a commitment to, or evidence of, engaging with potentially or actually affected rightsholders.

In addition, there has been a growing number of cases globally where banks are considered to have contributed to human rights abuses through their financing decisions. These include projects involving farmers being forced off their land, the destruction of sacred indigenous sites, and violence against community members. In June 2018, BankTrack and Oxfam Australia called on banks to ensure access to remedy for victims of human rights abuses. The paper “shows that banks have barely begun to implement their responsibilities to develop grievance mechanisms under the UNGPs” and indicates that banks are not doing enough to ensure that stakeholders impacted by bank-financed activities are obtaining proper remedy.

For companies working across geographies, including financing projects that affect local communities, it may be beneficial for companies to establish, through engagement with local stakeholders, a standard response for certain common grievances. Engaging with local stakeholders is essential to ensure that the response is acceptable within the local context and also to satisfy the criteria for effective remedy. 

It is important for companies to consult with local stakeholders to ensure that all affected communities, including vulnerable groups, have access to remedy if a human rights violation occurs. 

In line with this, it is important for companies to consult with local stakeholders to ensure that all affected communities, including vulnerable groups, have access to remedy if a human rights violation occurs. Companies should first map the different vulnerable groups which may exist to understand the specific, distinct barriers that these groups may have in accessing remedy. Vulnerable groups can include people who are marginalized due to life circumstances (poor, uneducated), people who are discriminated against by formal laws, people who are marginalized and in hiding such as LGBTI people or people living with HIV/AIDS, or people who are marginalized due to societal discrimination or bias.

Stakeholder engagement is especially important to ensure the most vulnerable groups are aware of the various remedy options available. In order to ensure that all vulnerable groups have access to and understand the remedy pathways available to them, companies should:

1. Provide information on the company’s grievance mechanism in written, illustrated, and oral formats. 
2. Create open, safe, and confidential stakeholder engagement forums for the ongoing collection of and follow-up on community grievances.
3. Consult local communities to ensure that these accessibility measures suit the needs of vulnerable groups, including those who are illiterate or semi-literate.

The UNGPs have defined for businesses how they can manage human rights impacts and risks. Now, the responsibility is on companies to follow the Guiding Principles in order to do business in a way that respects the human rights of workers, customers, and communities where they operate. Stakeholder engagement is key in all these aspects, but especially in cases of grievance, engaging stakeholders is necessary to ensure the people affected are granted access to remedy.

This article originally appeared on GreenBiz.