Human rights management: getting started

January 01, 2004

Recent years have seen a growth in societal expectations that companies will act to protect and promote human rights. But how do these expectations apply to companies’ operations and activities, and how should companies begin managing these expectations? Rory Sullivan offers a few pointers.

Human rights management: getting started

Recent years have seen a growth in societal expectations that companies will act to protect and promote human rights. But how do these expectations apply to companies’ operations and activities, and how should companies begin managing these expectations? Rory Sullivan offers a few pointers.
CCB Editorial Comment

What are Human Rights?

Part of the challenge faced by companies has been that the manner in which human rights apply to companies is far from clear. The UN Sub-Commission on Human Rights recently issued a set of recommendations (see table 1) which have brought some much-needed clarity to this debate.

From the table below, it can be seen that while human rights per se may be a new subject for management attention, there are many overlaps with corporate social responsibility issues such as the environment, health and safety at work, equal opportunities, and bribery and corruption.

A framework for human rights management

Initial Review

The starting point for the development and implementation of a human rights management system is to identify the company’s human rights impacts and the management processes and systems that are in place to manage these impacts.

This review process should consider:

  • The scale and extent of the organisation’s activities and operations, including suppliers, contractors, and joint venture and other partners.
  • The company’s human rights impacts, including issues relating to workers (e.g. health and safety), products and services (e.g. the positive and negative impacts of goods and services, including the possibility of misuse), business partners (e.g. supply chain labour issues) and communities (e.g. land and indigenous people’s rights).
  • The human rights issues associated with the countries where the company or its partners operate.
  • Current systems and management controls. The company should identify those of its existing management systems and structures that can be utilised for managing human rights issues.  This review should also identify those areas where gaps exist.The company’s human rights performance, as measured by internal performance data (e.g. health and safety performance, community development expenditures) and by external perceptions and analysis of the company’s performance, gained from sources such as the media, complaints records, and discussions with stakeholders such as local communities, NGOs, trade unions and regulatory authorities.

These external perceptions and opinions are particularly important indicators of areas where there have been difficulties in managing human rights issues.

Human rights policy

An explicit human rights policy is widely seen as a necessary starting point for demonstrating corporate commitment to the protection and promotion of human rights. Corporate human rights policies should explicitly invoke the Universal Declaration on Human Rights and the core labour conventions of the International Labour Organisation.

Implementation

Companies should define human rights responsibilities and authorities throughout the organisation, from board level down.

Training should be provided to ensure that all employees recognise the importance of human rights issues to the company, and understand the systems and processes that are in place to ensure that human rights issues are effectively managed. This knowledge must be supplemented by systems and processes (e.g. integrating human rights requirements into job descriptions and performance appraisal processes) to encourage employees to actively support human rights within the organisation.

In parallel to these employee-focused measures, companies also need to implement appropriate procedures and systems for both routine operations and for situations where the company’s systems fail (e.g. whistle-blowing systems, emergency response systems).

These systems should include formal processes for ensuring that human rights are taken into account in risk management, project management, purchasing, product or service development, manufacturing, customer relationship management, marketing, and contractual relationships.

Monitor and report

Monitoring processes should provide senior management with the information necessary for the review and evaluation of the effectiveness of the human rights management system to ensure its continuing suitability, adequacy and effectiveness. While reporting on human rights remains relatively underdeveloped, reflecting the complexities of measuring human rights performance and the general absence of appropriate performance indicators, there are growing expectations that companies will report externally on their human rights performance.

Management review processes

Management review is frequently the weakest area in companies’ management systems. On many CSR issues, it is not uncommon for senior managers to assume that simply issuing a policy is enough to demonstrate their commitment to the issue in question. Management review is of particular importance for human rights given the relative novelty of human rights as a management issue. The management review process should consider questions such as the performance of the organisation against its policy commitments, and external perceptions and reports of the company’s performance (e.g. in the media, from dialogue with external stakeholders). These review processes also provide the opportunity for senior management to reiterate their commitment to human rights.

Conclusion

Even though human rights are a relatively new area for management attention, most companies will find that they already have many or all of the management systems and processes that they require. The challenge is to harness these systems and processes to explicitly address human rights issues.

Editorial Comment

Recommendations of the UN Human Rights Sub-Commission on Companies and Human Rights

Companies must respect and promote the following rights:

·   rights of workers: specifically, companies shall not use forced or compulsory labour, shall respect the rights of children, shall provide a safe and healthy workforce, shall provide workers with remuneration that allows for an adequate standard of living for them and their families, and shall ensure the rights to freedom of association and collective bargaining;

·   respect for national sovereignty and human rights: this requires that companies do not pay bribes, ensure that the company’s goods and services are not used to abuse human rights, and respect civil, cultural, economic, political and social rights. These social rights include the rights to development, adequate food and drinking water, health and education;

·   right to equal opportunity and non-discriminatory treatment;

·   right to security of person;

·   consumer protection;

·   environmental protection.

These obligations apply to the company itself and also to contractors, sub-contractors, suppliers and licensees.

For more information, see the UNHCR website: http://www.unhchr.ch

Corporate Citizenship Briefing, issue no: 73 – January, 2004

Rory Sullivan is Director, Investor Responsibility with Insight Investment.
He is the editor of the recently published Business and Human Rights: Dilemmas and Solutions.
rory.sullivan@insightinvestment.com

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