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Issue Analysis: Integrating Human Rights into CSR

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Emerging markets. Regimes without strict human rights policies ... rights really increase the 'bottom line,' or is it just a new fashion passing by? ... – PowerPoint PPT presentation

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Title: Issue Analysis: Integrating Human Rights into CSR


1
Issue AnalysisIntegrating Human Rights into CSR
  • Roni Abusaad, Steve Odom,
  • Nick Pearson
  • Strategic CSR
  • March 14, 2007

2
Human Rights what are they?
  • Definition
  • Universal Declaration of Human Rights in 1948,
    set the minimum standards of all UN countries.

3
Whats new Globalization
  • In an increasingly globalized world, issues have
    emerged
  • Transnational firms
  • Emerging markets
  • Regimes without strict human rights policies
  • Increased attentions to human rights scandals
    Shell in Nigeria, UCC in Bhopal, etc.
  • (You could argue that this is nothing new, just
    more public attention)

4
Raising expectations international
codes/standards
  • In response to these trends, there has been a
    proliferation of human rights codes
  • Mostly voluntary
  • Examples
  • Global Sullivan Principles
  • ILO Principles (Labor rights, child labor, forced
    labor, etc. 1998)
  • OECD Guidelines for Multinational Enterprises
    (2003)
  • UN Draft Norms for TNCs on Human Rights (2003)
  • UN Global Compact (2001)
  • Many multilaterial / geography-specific
    conventions

5
Trends in international codes and conventions
  • Increasingly specific (to geographies, issue
    areas)
  • Growing number of codes
  • Shifting expectation of corporate responsibility
  • Old TNCs should follow host countries laws
  • New TNCs should take responsibility for human
    rights standards when host countries are weak or
    unwilling to enforce them.
  • Still largely voluntary

6
Other trends voluntary intl. and industry
associations
  • International business / human rights
    organizations
  • UN Global Compact
  • Business Leaders Initiative for Human Rights
  • International Business Leaders Forum
  • World Business Council for Sustainable
    Development
  • Industry associations and initiatives
  • Extractive Industries Transparency Initiative
  • Voluntary Principles on Security and Human Rights
  • Electronic Industry Code of Conduct

7
Key human rights issues for businesses
  • Labor practices freedom of association, forced
    labor, child labor, work conditions, etc.
  • Environmental health and safety public health,
    pollution, environmental justice, etc.
  • Supply chain should suppliers comply with human
    rights standards, and if so, how?
  • Security ensuring that security of assets
    doesnt jeopardize human rights (e.g. through
    security forces)
  • Corruption

8
Why integrate human rights into business
practices??
  • How can human rights help my business improve?
    Does it cost much?
  • Do human rights really increase the bottom
    line, or is it just a new fashion passing by?
  • How can I see or measure the impact?

9
Benefits of integrating human rights into
business practices
  • COMMERCIAL BENEFITS
  • Human Resources
  • Low turnover
  • High morale
  • Recruitmenthigh talents
  • Retention
  • Increased productivity
  • Marketing
  • Enhanced corporate reputation and brand image
  • Sense of pride of the corporationincreasing
    loyalty to the company and its productsincreasing
    sales

10
Benefits of integrating human rights into
business practices
  • Relationships
  • More sustainable relationships with other
    organizations and the community-external
  • Increased sense of trust and loyalty between
    employees and management
  • Risk
  • Reduced risk of consumer protest, boycotts,
    adverse publicity
  • Reducing risk of being brought to court
  • Competitiveness
  • Improved investment climate
  • Strengthened shareholder confidence
  • Competitive advantage over other companies

11
Benefits of integrating human rights into
business practices
  • SOCIAL BENEFITS
  • Strengthening the rule of law
  • Strengthening capacity of civil society
  • Encouraging other companies to follow example
  • Partnerships with civil society organizations and
    strengthening social cohesion
  • Decline in social unrest, conflict, violent
    sabotage
  • More stable and equal employment opportunities
  • Greater potential for sustainable socio-economic
    development

12
Challenges
  • Enforcement
  • Unclear/ambiguous international legal enforceable
    frameworkvoluntary
  • Difficulty observing what goes on in practice
  • Uncooperative governments or dictatorial regimes
  • Local laws and traditional cultures
  • Weak civil society organizations

13
Challenges
  • Internal communication within a corporation
  • No training or educational preparednessseen as
    extravagant
  • No structure or formal channels of communication
  • Evaluation and assessment
  • Long term vs. short term business
    strategy--Unclear business case
  • Difficulty linking profits with human
    rights
  • Demand for short term value rather than long term
    strategy
  • Lack of quantitative measurements

14
Expected vs. Leading Practices
  • RE General Obligations
  • Expected
  • Public statement of commitment to human rights
  • Public statement of commitment the International
    Labor Organizations Core commitments, Global
    Compact guidelines, etc.
  • Leading Practice
  • Cooperation and/or the joining of a Human Rights
    related institution (e.g., International Business
    Leaders Forum, BLIHR)

15
Expected vs. Leading Practices
  • RE Security
  • Expected
  • Understanding and supporting the Voluntary
    Principals on Security and Human Rights
  • Leading Practice
  • Employee personal accident insurance
  • Engage regional security advisors and government
    officials in training with security staff
    regarding local laws and protection of human
    rights

16
Expected vs. Leading Practices
  • RE Security
  • Leading Example Shell
  • Shell has its own Security Standard that it
    applies to contracted private security firms as
    well as Shells in-house security. The Security
    Standard was developed in collaboration with
    human rights groups and international agencies
    such as the United Nations.
  • Shell supports the Voluntary Principles on
    Security and Human Rights a set of principles
    resulting from a collaboration of the US and UK
    government, business and NGOs that provide
    guidelines on things like risk assessment and
    relations w/ security providers.

17
Expected vs. Leading Practices
  • RE Supply Chain
  • Expected
  • Communicate a commitment to human rights with
    suppliers
  • Leading Practice
  • Outline a supply chain code of conduct
  • Implement internal auditing processes for
    suppliers to follow
  • As well as maintain auditing of suppliers done by
    the corporation and cut ties where violations
    occur

18
Expected vs. Leading Practices
  • RE Security
  • Leading Example HP
  • HP implements a Supplier Code of Conduct and
    requires that all suppliers meet these standards
  • HP is leading the way in creating an industry
    standard for supplier conduct as it relates to
    human rights issues.
  • HP uses an internal auditing system to check
    suppliers and responds to issues as they arise,
    as well as sticking to their promises to cut ties
    with suppliers that do not meet the standards
    set.
  • Side note HP is a member of the Business Leaders
    Initiative on Human Rights (BLIHR), a group of
    ten global companies working to protect human
    rights.

19
Expected vs. Leading Practices
  • RE Health and Safety of Employees
  • Expected
  • Participation in industry safety forums and
    initiatives
  • Training for employees
  • Leading Practice
  • Community safety education programs
  • Public safety awareness campaigns

20
Expected vs. Leading Practices
  • RE Environment, Health and Safety
  • Leading Example Gap Inc.
  • In 2004, Gap worked alongside a consulting firm
    to conduct a high-level assessment of their
    environmental impact at each stage of their
    product life-cycle. As a result, Gap made major
    changes in their packaging use and disposal
    procedures, as well as reductions in energy
    consumption.
  • Despite a rise in working hours and employees,
    Gaps worker injury rate has gone down by 9
    percent in 2004 relative to 2003 due to a newly
    implemented worker safety protocol.

21
Issues to Argue
  • Avoid biting off more than one can chew
  • Through conversations with Dow and by reading
    reports from other corporations, it seems clear
    that Human Rights initiatives can be confusing
    and can form a gray area among the
    corporations principles.
  • It is advisable to focus on supporting one Human
    Rights initiative or compact.
  • Internal communication otherwise becomes a
    cumbersome issue

22
Issues to Argue
  • Insure rigorous assessment and evaluations
  • Because of the self-monitoring nature of the
    issues, third party auditors should play
    well-defined roles in the forming of
    corporations human rights policies.
  • Leading corporations should maintain rigorous
    supply chain codes of conduct and follow through
    with monitoring, auditing and disciplinary
    actions.

23
Issues to Argue Our recommendations
  • Summary of issues
  • Increasingly globalized operations and supply
    chains
  • Proliferation of international human rights codes
    and conventions
  • Increased scrutiny on human rights all the way
    through the supply chain
  • A rising bar for human rights policies among the
    worlds largest firms.
  • --We recommend three actions for firms that want
    to address this issue and remain competitive.

24
Issues to Argue Our recommendations
  • 1. Keep it simple develop a coherent internal
    human rights policy and only sign on to
    international codes as necessary.
  • The broad nature of the issue and expanding
    landscape of international initiatives and codes
    of conduct can confuse internal messaging and
    communication.
  • We recommend that unless there are specific
    industry initiatives that are appropriate, firms
    should just sign on to the Global Compact, which
    compiles most of the fundamental elements of
    human rights practice and reporting.

25
Issues to Argue Our recommendations
  • 2. An effective corporate human rights strategy
    should include developing and maintaining
    rigorous supply chain codes of conduct and follow
    through with monitoring, auditing, and
    disciplinary actions.
  • 3. Ensure and institutionalize rigorous
    self-assessment and evaluations. Because of the
    self-monitoring nature of human rights issues,
    third party auditors should play a visible role
    assessing corporations human rights policies.
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