From 26-28 November 2018, Corrs attended the seventh annual UN Forum on Business and Human Rights (Forum) in Geneva, Switzerland, where over 2500 global business leaders, academics, lawyers, human rights experts and civil society representatives gathered to discuss the integration of human rights considerations into business decisions.
For the first time, business represented over 30% of all delegates reflecting:
- an increasing interest and engagement in human rights:
- a wider commitment to learn more about the UN Guiding Principles on Business and Human Rights (UNGPs); and
- a desire to understand how business can benefit from a human rights aware approach.
This year, the Forum focussed on the responsibilities of business to undertake human rights due diligence to prevent adverse impacts on people, and a number of broad themes emerged:
- Business respect for human rights will be part of the future. Interest in and commitment to the UNGPs is growing, and hard and soft law human rights obligations and responsibilities are increasing. A changing mindset in business is seeing the benefit of respecting and empowering stakeholders to make a meaningful contribution to business sustainability and growth. At the Forum, the Senior Vice President of Schneider Electric discussed how they see the provision of energy as a basic human right that helps deliver other rights such as water, sanitation, health and education. For them, human rights is core business.
- As a part of future proofing business, Boards have a role to ensure respect for human rights. This involves integrating human rights into the culture, processes and practises of a company, and having a clear understanding of the sphere of influence of the business and where human rights impacts can be mitigated and addressed. Boards must ensure their business has a positive impact on the rights of stakeholders, which in turn strengthens the licence to operate, community engagement and support, and long term sustainability.
- Human rights challenges are complex and multidimensional, requiring specialist understanding, management, and continuous improvement. It is not enough to identify industry or country risks, but rather to ensure due diligence is undertaken across the breadth of the value chain. This can be time consuming and convoluted. For example, Rio Tinto has 47,000 employees and 33,000 suppliers across 35 countries combined with a range of different relationships (joint venture partners, mergers and acquisitions, divestments, contractors, and suppliers). Facebook see their 2.2 billion users as rights-holders. How they ensure their right to freedom of speech and privacy is critically important, while also protecting the right to safety. A recent human rights impact assessment on their presence in Myanmar led to some challenging decisions.
While the UNGPs and OECD Guidelines for Multinational Enterprises provide general guidance, there is no ‘one size fits all’ formula, and each business will need to undertake their own process. This should involve:
- identifying and assessing actual or potential human rights impacts;
- providing for remediation where appropriate;
- preventing or mitigating further human rights impacts; and
- tracking implementation and communicating the process to others as part of the continuous learning process.
- The technology sector presents particular human rights due diligence challenges. This is not only due to the complexity and vulnerability of their supply chains where production is at high risk of absorbing conflict minerals and being conducted by slave labour, but also in the conceptual development of new technologies. For example, the Forum learned that human rights due diligence in the artificial intelligence (AI) value chain is particularly challenging, and should be both a continuous and staged process – from initial conceptualisation and analysis, design and testing to the final phase where outputs are monitored and controlled. Discrimination is possible at all stages – due to either intent, ignorance, or poor data.
- Human rights due diligence should be normalised across business functions. This involves a commitment to prevent adverse human rights impacts, ensure that risk assessments are addressing risks to people not to the business, and make sure the process of due diligence is ongoing, in recognition of the fact that human rights risks change in evolving environments. Due diligence processes should be grounded in meaningful stakeholder engagement, particularly where companies work in contexts where national law may not meet minimum international human rights standards. As human rights due diligence is increasingly embedded as an expected norm of business conduct, business should expect their lawyers to advise on it in their transactions.
The Forum’s focus this year on the responsibility of business to respect human rights was in the context of an increasingly dominant modern slavery discourse. In Australia, the Commonwealth Modern Slavery Bill (2018) (Bill) passed Parliament as the Forum met and was warmly welcomed in Plenary by UN Working Group Vice Chair Surya Deva.
As discussed in this recent article by Corrs, the Bill requires Australian businesses with a consolidated revenue of over $100 million to report on their supply chains. However, the Forum’s discussions reinforced the fact that modern slavery is only a part of the potential human rights impacts of business. Labour rights, environmental rights, rights of the child, freedom of association, anti-discrimination, education, and health are just a few of the rights that can be affected by business operations. These obligations are also increasingly becoming relevant to general counsel outside the CSR framework. These obligations are affecting decision making in transactions and responses to class action litigation, particularly those grounded in conduct in emerging economies.
In general, business conducted in a thoughtful and rights respecting manner will enhance rights through employment, wealth generation, and economic growth. But positive human rights impacts cannot be assumed, and as market pressures continue to demand lower prices and increased market share, it is time to ensure that human rights considerations are fully incorporated into business decision making.
This publication is introductory in nature. Its content is current at the date of publication. It does not constitute legal advice and should not be relied upon as such. You should always obtain legal advice based on your specific circumstances before taking any action relating to matters covered by this publication. Some information may have been obtained from external sources, and we cannot guarantee the accuracy or currency of any such information.