Written by // Bastian Buck and Scott McAusland

The connection between business and human rights has been the subject of growing discussion in recent years. In 2008 the United Nations Special Representative of the Secretary General on Business and Human Rights (SRSG), John Ruggie, put forward a policy framework to address business and human rights challenges, which is based on three principles: the state duty to protect against abuses committed by third parties, including business, the corporate responsibility to respect all human rights, and the need for greater access by victims to effective remedy, judicial and nonjudicial. Ruggie has stressed that while states have the duty to protect human rights, companies have a responsibility to, at minimum, avoid infringing on the rights of individuals or groups. This is not simply a passive responsibility, but requires taking positive steps to become aware of, prevent and address any adverse human rights impacts connected with their business activities.

DISCLOSING DUE DILIGENCE PROCESSES
Because of the complexities of measuring human rights performance, stakeholders are increasingly looking for disclosure of human rights due diligence processes. Human rights due diligence means ongoing processes which a company carries out to ensure it is aware of which human rights its operations may affect, and the steps taken to anticipate, prevent or mitigate any negative impacts, as well as enhance positive impacts.
Proper disclosure of a company’s human rights due diligence processes should allow stakeholders – including investors, employees, NGOs, communities where the company operates and others – to determine how well the organization manages human rights issues, and how well it is implementing its own policies and processes.

A BROAD ASSESSMENT OF POTENTIAL IMPACT
Long before assessing potential human rights impacts of activities at site- or project-level, human rights due diligence calls for a broader assessment of a company’s potential impact on human rights, including evaluation of the potential human rights risks and opportunities linked to an industry, products and services and business model. Stakeholders look for this information as an indication that companies are taking a broad view of their potential human rights impacts, as well as a pro-active approach to human rights. Human rights reporting should describe how risks associated with human rights have been analyzed and the extent to which any industry-level guidance on human rights risks has been consulted. There are several parameters to consider:

Country Context: In operating countries or countries where raw materials, finished products, etc. are sourced, do laws conflict with, or fall significantly short of, the rights articulated in international human rights standards and conventions? Are these laws incompatible with the company’s own principles? Are NGOs (such as human rights organizations) and the international press allowed to operate in the country without serious restrictions?

Operating Zone: Does the company have operations in areas where labor rights protections are more complex to enforce or have a greater risk of poor enforcement? Does the organization operate in a conflict zone? Are operations close to communities of indigenous, traditional or tribal peoples? Are the company’s operations in areas that may have exemptions from certain regulations or are special areas under national law such as export processing zones?

Use of goods/services: Have stakeholders raised concerns publicly (e.g., through shareholder resolutions or public reports) about actual or potential human rights violations associated with the use of the company’s products or services?

Relationships: What kinds of third-party relationships does the company maintain (e.g., supply chain, joint ventures, government relations, security forces, etc.)? In which of these does it have significant influence, or the ability to determine, alter or affect third parties’ actions? Is the company involved, through its operations (including selling goods and services) with entities that have been cited for human rights abuses?

Business Model: How do business practices or the company’s business model affect human rights? Has the company examined potential human rights impacts (both positive and negative) resulting from activities such as purchasing practices, pay and promotion incentives or lobbying activities? These are relevant to human rights to the extent that they may encourage practices by business partners or others that could lead to human rights abuses, or contribute to creating an environment in which human rights abuses are more likely to occur. For example, a company whose procurement practices include short lead times could directly result in supplier working environments prone to high levels of overtime or other labor issues.

TAKING THE NEXT STEP: REPORT
The next step is to report on any policies and processes already in place, or actions taken, to prevent or mitigate human rights risks identified through the above assessment process. This also means acknowledging in reporting any ongoing debates about the human rights impacts associated with the prevailing business model of the industry (e.g., affordable drug pricing for health care companies, or sustainable mining practices for extractive companies). This need not be a lengthy discussion; simply acknowledging the existence of the debate and providing readers with a succinct statement of how the company is addressing it within its own operations is an important start.

Efforts over recent years by governments, businesses, trade unions and civil society representatives to better understand the nature and scope of corporate responsibilities concerning human rights have resulted in significant progress and a greater sense of shared expectations about the way forward. It is now clear that it is clear that disclosure on human rights is of growing importance both to companies and to their diverse stakeholders.

This article was based on A Resource Guide to Corporate Human Rights Reporting, published by The Global Reporting Initiative, Realizing Rights: The Ethical Globalization Initiative and the United Nations