Essential ESG: Episode 8 – Takeaways from the 11th annual United Nations Forum on Business and Human Rights

Eloise O’Brien, Associate, Responsible Business and ESG

Dr Phoebe Wynn-Pope, Head of Responsible Business and ESG

Eloise: Welcome to another instalment of the Corrs Chambers Westgarth Essential ESG podcast. I’m Eloise O’Brien, Associate in our Responsible Business and ESG practice and I’m joined today by my co-host Dr Phoebe Wynn-Pope, Head of Responsible Business and ESG at Corrs. We’re coming to you from the land of the Wurundjeri people of the Kulin Nation.

Eloise: Phoebe, today I thought we’d speak about the UN’s 11^th Annual Forum on Business and Human Rights which you attended a few weeks ago in Geneva. The theme this year was ‘Rights Holders at the Centre: Strengthening Accountability to Advance Business Respect for People and the Planet in the Next Decade’. Can you tell us firstly, who are rights holders?

Phoebe: Well when we’re talking about rights holders it’s really anybody who is affected and impacted by business activities. So that could be your employees, your community, it could be the people that buy your goods and services and products, and very often for major projects and projects that happen to occur on the lands of indigenous people it’s the rights of indigenous people and the particular concerns that they have around business activity and how it impacts on them.

Eloise: So Phoebe, when we’re speaking about rights holders how are businesses putting rights holders at the centre of their efforts to respect human rights? What are some of the things that were spoken about in this vein at the forum?

Phoebe: One of the key things was the issue of free, prior and informed consent, particularly for indigenous people and I’ll come back to that in a minute because there were quite a few different issues that were raised in that context. But it’s really about ensuring that in the decision-making and design of business activity and operations that we’re thinking about who is going to be impacted by those activities and what that looks like. So if that question is put at the centre of what you’re doing, you’re going to be starting to think about how you’re putting rights holders at the centre which was the whole point of the forum in many ways. It sounds overly complex but really it’s a matter of ensuring that you have proper operational grievance mechanisms in place so that if things go wrong or people are badly impacted you know early on that that’s the case and then when you’re putting those grievance mechanisms in place that the rights holders themselves are consulted in terms of what would work for them, making sure that those mechanisms are going to be accessible and approachable for a whole range of different rights holders whether they be in your organisation or whether they be in your community or in your supply chains, so there’s a whole range of things.

Eloise: You mentioned free, prior and informed consent and the importance of consulting with the local indigenous peoples when you’re operating on or developing land that has traditional owners. Can you tell us a little bit more about that?

Phoebe: It was really great to hear from a lot of First Nations people at the forum who happened to be there because the global indigenous caucus had been in Geneva in the preceding days and the issues that came up around free, prior and informed consent, so talking to local communities, indigenous communities about projects early on in project conception and design and before implementation starts and ensuring that that free, prior and informed consent is obtained was a big issue but there were other issues in terms of criminalisation of protests. So people protesting against projects on their land being criminalised and arrested, gag orders when remedy is provided so when remedy is provided to certain community members and gag orders are imposed on them and then the hostility and the difficulty that that creates within the community because other community members don’t know who has got what, a whole range of things around failure to deliver on remedy so on the one hand you’ve got here’s remedy and a gag order and on the other hand we’ll promise to deliver remedy but actually a complete and utter failure to do so and very little prospect for communities to actually seek that remedy through the courts or a very long and expensive process. So there’s a whole range of issues that really came to light which really spelled out for me that importance of that consultation right from the beginning and being able to work in partnership and not getting to the stage where you have to be thinking about remedy and court and gag orders.

Eloise: You mentioned there Phoebe that it’s really important to engage with human rights impacts from the very get-go of your operations or your activities and consistently throughout the development of a project. One aspect of this is doing human rights due diligence and at the forum you heard from Lara Wolters who is a member of the European Parliament and Rapporteur for the Corporate Sustainability Due Diligence Directive, which is a European initiative proposing to introduce mandatory human rights due diligence. What did you take away from that session in terms of the importance of human rights due diligence developments for strengthening accountability?

Phoebe: It was a really great session and she gave us a very good overview of the challenges of getting this legislation through in Europe. She noted that the political context has really slowed down the process. I think that there’s been a sense that it’s been coming for ages and is it really going to come? And she made a note that crisis after crisis, so COVID-19, the Ukraine and Russia conflict and now inflation and possible recession on the horizon has really slowed down that process through the European parliament but that she’s pretty confident that things are progressing and that they will have something by the end of 2023. She said that there were a lot of legal questions that still need political answers. So she gave us some insight into what’s going through the parliament and what that looks like in terms of who are the legitimate rights holders that should be captured within any legislation and mandatory due diligence requirements, what does that look like, how deep in the supply chain can businesses be legitimately held responsible for. How does that work in terms of the due diligence that they do but also the accountability and responsibility for that and linked to that is that legal liability question around the cause, contribute and directly linked kind of relationship to human rights impacts that businesses might have. So how to provide some clarity. If you are having mandatory due diligence with penalties, when things go wrong how can we create clarity around what that exactly looks like and what those linkages to impact are. And also how to take into consideration international humanitarian law into the human rights framework and human rights due diligence. So what does responsible business in conflict look like, what does responsible exit look like, there’s a whole range of questions that are occupying the minds of many many businesses in Europe on what that looks like, in particular the Ukraine-Russia conflict. So there’s a lot of hurdles but very much that confidence that by the end of next year this will get through the parliament which means that by 2025 with the entry into force requirements and time lags large corporations will be required to do human rights due diligence reporting by 2025 and SMEs likely by 2027. It’s definitely coming. She gave a very stirring presentation I think around some of the realistic hurdles and challenges but it’s on its way.

Eloise: Phoebe, you mentioned there the importance of integrating international humanitarian law considerations into human rights due diligence and any regulatory frameworks especially in light of the ongoing conflict in the Ukraine, and coming out of the forum it was really clear that business and human rights in conflict is a focus for the UN Working Group. Can you speak to some of the things companies should be doing differently in conflict zones, or in contexts that are conflict-affected, to prevent and mitigate human rights impacts?

Phoebe: Yes I think the question about business and conflict has been one that has occupied lots of people’s minds for a long time going right back to blood diamonds and that idea that business activity can actually perpetuate conflict if it’s done in a poor way. We’ve come a long way from that but conflict sensitive approaches are really important. The UNDP has developed some heightened human rights due diligence frameworks to help organisations think about human rights in a way that is even more intensive and thinking about that conflict sensitivity and how their activity may impact on the conflict as well as impact on rights. So that’s a really important part of the equation. IHL also provides protections for business. You know businesses working in conflict zones have the protection of being a civilian in international humanitarian law at least. They have the protection of being civilian infrastructure. Their workers are civilian. And it’s really important for businesses working in those contexts to actually understand what might lose that protection, what might actually cause them to be considered a legitimate military target under international humanitarian law. So this idea that businesses need to be much more conscious of that other legal framework, the protections that it gives them but also the risks they face within that conflict setting is really important.

Eloise: Of course and there’s obviously also really interesting things coming out of that focus on rights holders, so speaking about the personnel you have on the ground in that conflict-affected area or engaging them in developing a contingency plan or plans for when to responsibly exit. One of the things you mentioned before was there are human rights impacts associated with both staying and exiting from an area where conflict is ongoing. Can you talk to me about the kind of things that come into consideration when you’re making that decision whether to exit responsibly or whether to stay?

Phoebe: That’s a great question Eloise and it’s really complex and often there’s no clear answer. It’s one that has been occupying the minds of many many businesses in situations like Russia and Myanmar and how do we think about whether we do more good or more harm by staying or leaving and each context is really different. So you have to be able to do that human rights analysis. You have to be able to consider your staff. You have to be able to consider the community. What will be the impact if you leave and I’m talking about the impact on people not impact on business. So if we’re thinking about this in a business and human rights context it’s really about how you are going to minimise the negative impacts of your activity whether that’s stay or go on the community and on your staff and on all the rights holders who are going to be impacted by your business. So for some businesses that includes thinking about their products. If we’re providing essential medicine for example and there is no other way of that essential medicine being provided in that particular context without you then that decision to leave becomes really difficult and more complex but if you’re providing non-essential goods or perhaps goods that might be aiding in the conflict in some way then that has different impacts and different considerations. So each context really – you know I can’t give you a checkbox of ticking through because each context is very specific.

Eloise: Yes it’s a huge challenge and it’s one many businesses in Europe are obviously having to contend with but as you say it’s been an issue for many many years for many many businesses and increasingly technology companies and other companies in various industries are having to contend with this.

Phoebe: That’s right and it’s not binary right so it’s not necessarily black and white, go, stay, it is very complex and requires a very in-depth analysis.

Eloise: There was also a focus on strengthening accountability for investors at the Forum. Can you tell us a bit about how investors are engaging with human rights and what’s driving this trend?

Phoebe: Well investors are engaging with human rights hugely because they’ve been thinking about the environment for a long time and we see a lot of investor activity and multi-stakeholder groups with investors being involved in the environment but on the human rights side, that’s been lagging a little bit. So what we’re seeing is this real uplift in acknowledgment that the ‘S’ in ESG if you like, that sort of social investing and social considerations and human rights, have been slightly left behind and with this uplift we’re seeing more investors doing human rights due diligence on their investments and on their supply chain. So thinking about their customers, what that looks like. They’re seeing financial materiality in human rights impacts. So where investors are seeing human rights risks they’re making direct correlation with material financial risk and so organisations that aren’t able to demonstrate that they are identifying and mitigating any human rights risks that they have in their operations and their supply chains are going to be facing a much harder time to access capital and investment.

Eloise: There was also some exciting news coming out of the forum. We saw the launch of the Business and Human Rights Lawyers Association of which Corrs is a founding member. Can you tell me a bit about the Business and Human Rights Lawyers Association and the role of commercial lawyers in assisting their clients to implement the UNGPs more broadly?

Phoebe: The Business and Human Rights Lawyers Association is really exciting. There’s 22 leading law firms from around the world who have put this together and it’s to invite law firms and business lawyers from around the world who respect human rights in line with the UN Guiding Principles on Business and Human Rights and to work together to build competency, understanding and learning for how human rights should be integrated across all sorts of different commercial legal areas and operations and other activities. So the association is inviting law firms from around the world to participate. There will be education and capacity building activities, peer learning and collaboration, so really working together to make sure that human rights are well understood across commercial law firms and in commercial practice and also to provide some leadership and dissemination around critical issues for business and human rights. It’s a really exciting initiative. It was launched at the forum and then there was a launch event at the US Mission in Geneva and it’s a really exciting initiative.

Eloise: Sounds like a fantastic initiative Phoebe and I know you and I are both very excited to be involved.

Phoebe: Absolutely Eloise and it was a really great forum this year. It was great to catch up with colleagues from around the world and to hear their stories and you know I think I said at the beginning it was particularly poignant this year with so many indigenous and First Nations voices being heard and their stories being told and it just really does bring it back to us all about how important human rights considerations are in business activity.

Eloise: Thank you for listening to another instalment of the Essential ESG podcast. If you’ve enjoyed listening to this podcast, please don’t forget to subscribe wherever you get your podcasts.