A naïve wish for 2015

 

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Radically transparent supply chains

Once upon a time, in a far away land, the people decided to find out who made all the wonderful things that appeared in the town shop every morning…

As we approach 2015 there is perhaps a small opportunity for some wishful thinking upon a star. The coming year looks like being a tough one. Whilst we might expect good news on US-Iranian relations, tensions between the West and Russia could well deepen and extremists of various kinds are likely to inflict more horrors on the innocent, as recently took place in Pakistan. Europe looks like it will continue its walk towards increasing populism and xenophobia. We can only hope that enough multilateralism will prevail for forthcoming agreements on Climate Change and the Sustainable Development Goals. But what on business and human rights?

We all wish there will not be another incident of the scale of the Rana Plaza factory collapse in Bangladesh (which killed over 1,100 in April 2013) or the Turkish mine disaster (which killed over 300 in May 2014). Globalisation has lifted millions, if not billions, out of abject poverty over the past thirty years but it has also widened national inequalities and increased the power of non-state actors such as business. We can and should work for stronger laws, stronger enforcement and greater accountability but will it be enough? The social contract that binds our societies is shifting and national governments are struggling to keep up with the demands of communities and the wider population.

There perhaps has not been a time in history when democracy has been so widespread but also so undervalued. There are also signs that some governments want businesses to play an increasing role in the social contract itself, be it in terms of internet governance, on the one hand, or public-private partnerships to realise the Sustainable Development Goals, on the other. Given it will take years, if not decades, to respond adequately to these changing power dynamics, what are the essential steps we take in the meantime?

Greater transparency is clearly an essential step and this will not be news to any reader. Over the past ten years, there have been a range of important initiatives between governments, business and civil society on issues such as extractive sector revenue and tax, conflict minerals, timber or even the social audits of ICT, apparel or food companies. But we have a problem. These important initiatives, or laws that mandate transparency, operate outside of wider public awareness or scrutiny. And this lack of public interest limits the political prioritisation given to human rights by governments, the responsiveness of business and the resources available to NGOs.

Fundamentally, there is a lack of sufficient incentives within most value chains for lasting systemic change. For example, this week’s BBC Panorama undertook another documentary on a leading brand, this time Apple, and allegations of the abuse of migrant temporary workers in the supply chain including excessive overtime. In previous years it has been other brands with allegations of  child labour and so on. The issues raised are very serious but they are often, but not always,  systemic in nature. If you might think that such media attention would lead to changes in consumer behavior, well think again. The BBC journalist fronting the documentary on Apple admitted at the start of the piece how much he loved the product, as do I, and many people I know. Just looking at the number of iPhones and Macbooks evident at the recent United Nations Annual Forum on Business and Human Rights – that says it all – we all love to buy quality brands if we can afford to, perhaps feeling that even experts do not have the knowledge they need to make consumer choices either way.  Let me be clear – we don’t yet have the objective benchmarks to make such a decision about any ICT company and this is part of the problem and well as the frustration every time such a documentary is made.

If companies do change, and some are making big efforts, it is not driven by consumer behaviour or investors at the moment. Just think how much more we could achieve if we brought consumers and investors with us!

There are clearly not enough incentives and disincentives in the system for fundamental change. Law should provide more of these – particularly laws that capture the “submerged” actors who are not brought into the debate by public or political commentary. Conflict mineral legislation is one example of this and we can hope in 2015 to see more binding law relating to modern day slavery and the incorporation of the 2014 ILO Forced Labour Protocol into national legal regimes. And, yes, there might well be a case for a binding international treaty on business and human rights (more on this in 2015). But it would indeed be naïve to think that law alone will really drive the behavioural change we need amongst consumers and investors.

Also needed are market-based drivers. That is why many of us think that the public ranking of companies performance against human rights benchmarks is critical and we have recently launched a broad-based initiative to achieve this over the years ahead. Investors have a critical role to play: few companies will want to be bottom of their sector’s league table in terms of their human rights impacts. But consumers are also a critical factor that can no longer be over-looked.

So here are two radical fairytale endings.

The first possible ending: imagine that we in our fairytale town and when we go to the large furniture store (well known for its wonderful flat-packs) and you have the chance of interacting with a human being at the other end of the value chain. Through the magic of information technology and an image projected onto a screen, you would be able to pose questions to a worker representative at that week’s featured supplier on the other side of the planet and ask whatever question you liked (through an interpreter) about working conditions, the worker’s concerns and aspirations. Within the next ten years, one of the major retail brands will do this and, by doing so, begin to change the whole dynamics of corporate responsibility. It is nonsensical that consumers currently carry no responsibility for their own purchasing behaviour, this can and will change if consumers are given an opportunity to engage in the “kingdom of the supply chain” as Auret Van Heerden once called it.

A second possible ending: imagine a chain of fairytale theme parks in major cities such as Los Angeles, Orlando, Paris, Tokyo and so on and who currently spend many millions of dollars on supply chain auditing for the soft toys and other items sold therein. Imagine that they decided that supply chain auditing alone was never going to end the eternal risk of being caught out should some wicked goblin decide to scrutinise the supply chain with the hope of finding something, anything, that might embarrass the magic kingdom. Given that the theme parks touch hundreds of millions of people at some point of their lives, then they have an unrivalled opportunity to bring visitors into some state of awareness about supply chain conditions. Imagine that in every theme park there is a “supply chain interactive museum”, full of wondrous information about the real world.

Over time, consumer awareness of the complexities of supply chain management would increase and they would begin to ask the right questions of their own buying behaviour, and begin to reward those brands trying to do the right thing. This would save millions if not billions of dollars currently spent on auditing across industries, and instead some of this money into consumer awareness. Auditing would still have an important role to play – but disclosure and reporting would be more meaningful and be much more accessible to the most important stakeholder for any retailer – the consumer (or as we used to call them, the customer).

Sorry for the wishful thinking, but it is that time of year. I hope we will all live happily ever after, or at least until 1 January.

Remember, remember, the tenth of December…

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What should business do about shrinking civil society space?

Every year, on 10 December, the Institute for Human Rights and Business publishes its “Top Ten” issues to watch in the coming year. This year the plight of civil society and human rights defenders made the list, we cite examples from Africa, Australasia, Asia and Europe. But why?

It is undeniable that the space for civil society to play its independent role in defending the rights of citizens, and in particular the most marginalised, is shrinking in many parts of the world.  But why should businesses care? Human rights defenders around the world, who we remember today on International Human Rights Day, are a thorn in the side to governments and sometimes to businesses as well. Can a case really be made for businesses to defend the rights of  human rights defenders who might challenge the very governments with whom the companies wish to conduct their business? It might be #HumanRightsDay – a time for hope – but surely this is beyond the bounds of even idealistic wishful thinking?

Today, a range of civil society organisations were invited to join diplomats at the Foreign and Commonwealth Office in London to celebrate International Human Rights Day. Similar events were taking place in many other countries around the world, sometimes involving governments, sometimes not. This is not to give the UK Government a clean bill of health, questions were asked about the UK’s role in rendition relating to the victims of torture, following yesterday’s US Senate report on the CIA post 9/11, as well as why the European Convention of Human Rights has such a bad reputation in the eyes of some leading British politicians. But it remains the truth that the people who asked these questions today will not be fearing a knock on the door in the middle of the night for daring to do so. This cannot be said for an increasing number of countries. Marginalisation, violence and torture, or just the fear of them, can have a freezing effect on future dissent and freedom of expression. The important role of protecting privacy within this regard has already been made in an earlier commentary.

My friend Phil Bloomer from the Business and Human Rights Resource Centre asked the question about what the business response should be to this shrinking civil society space. It is an interesting question. Some companies will react that this is a political issue, an issue of civil and political rights and for any government and its citizens to sort out between themselves. Others, who have “gotten” the UN Guiding Principles on Business and Human Rights (UNGPs) might also point out the role of business is to respect human rights – not to protect them. Therefore, some might argue that the rights of human rights defenders can be respected, but if a government or other entity wishes to abuse their freedom of expression or privacy on an issue not related to their core business activity, why is of their concern?

This, however,  would be an incorrect reading of the UNGPs as responsibility needs to be understood in terms of contribution or linkage to a negative impact – businesses can benefit from the status quo in countries where human rights defenders, trade unionists and others are routinely rounded up – just by staying quiet.

But we don’t even have to go there. Business logic itself suggests that human rights defenders are of core business concern. The number of companies that now have “stakeholder engagement” programmes is incalculable. But far fewer actually define what they consider a stakeholder to be. Interestingly, many shareholders, for whom the company actually has legal and fiduciary duties, resent the term as it dilutes their primary relationship to the company. This is very understandable. Therefore, I must admit I remain confused as to why so few companies actively use the term “rights-holder” to describe those people upon which their activities might have a direct impact.

Anyhow, if we accept that many companies now feel the need to talk to people (and not just shareholders and regulators) about their activities, then – by definition – they must take an interest in the ability for these people to think, speak and act freely, otherwise what is the point?  I would argue that is implicit in the whole stakeholder concept, in particular if we include rights-holders within it, that business should take an interest in the space allowed to civil society in any given market or production site.

I don’t often single out companies for praise, but I am excited by H&M’s public statements in relation to living wage and collective bargaining: that the only way to obtain meaningful understandings of what a living wage is within a particular context is to allow workers the freedom and security of negotiating one. “Trade Union space” is not often discussed within the same context as “civil society space” but the two are heavily linked. The abuse of rights outside of a workplace will eventually permuate the workplace itself, and vice versa. Arguably, most of the active human rights defenders in the world today, and especially when we consider the role of business, are trade unionists. But there are many other examples, companies have often given safe spaces to those vulnerable to exploitation and even murder, from Oskar Schindler forward, there is nothing new to this. Business leaders have to remain very quiet about what is perhaps the most sensitive of business and human rights issues. Even now we are still learning about the role business leaders played during the last years of apartheid South Africa.

But business can be more transparent about what it is doing proactively to help secure civil society space. The United Nations has itself clarified the essential role of human rights defenders. But in specific business leaders might like to consider steps such as:

  • Being more precise about who really are the affected rights-holders in a given country and to assess their vulnerability. Do nothing that will make them more vulnerable (including identifying them publicly if this is against their wishes) but do what you can to make them less vulnerable. In some contexts formalise your relationship with them if it helps to protect them.
  • Think very carefully about your corporate philanthropy. Whilst giving grants can often strengthen civil society, over dependency, co-option, corruption and discrimination can weaken it.
  • Even casual references to the importance of civil society in business operations can surprise governmental counterparts or the local security services which might make assumptions about what business is expecting. This is perhaps one of greatest public policy contributions of international multi-stakeholder processes such as the Voluntary Principles on Security and Human Rights or the International Code of Conduct for Private Security Providers.
  • Have rapid response procedures to protect known human rights defenders or trade union representatives, which might mean bringing such people under the temporary protection of a company, international organization or a foreign embassy.
  • In conflict areas, use enhanced due diligence to assess the true vulnerability of all individuals and communities, and consult independent experts on the ground such as the International Committee of the Red Cross/ Red Crescent.

In my book, The Social License, I argue that civil society plays an essential role in defending the social contract itself – the ability of society to hold its governments to account. Less civil society means less social license, in definitional terms, as the consent granted to business activities is likely to be tacitly and not actively given. There is much that business could do to defend civil society space – we must first remind business leaders worldwide why it is in their own best interests.

So business, remember, remember, the tenth of December and in particular lets remember human rights defenders such as Kailash Satyarthi and Malala Yousafzay, winners of this year’s Nobel Prize for Peace.