Embedding Human Rights in Business Practice II

April 7, 2008

The Global Compact Office and the Office of the UN High Commissioner for Human Rights have announced the release of the second edition in the Embedding Human Rights in Business Practice series. The publication features 20 case studies from Global Compact signatories around the world.

Among the companies profiled are: ABB, Achilles, Anglogold Ashanti, AREVA, Barloworld, BASF, Eskom, Ipek Kagit, Ketchum, MAS Holdings, Newmont Mining Corporation, NIKE Inc, Novartis, Sasol, Royal Dutch Shell, Starbucks, Titan Industries, Volkswagen and Westpac Banking Corporation.

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Inadequate integration of human rights law – the need for additional risk management

January 23, 2008

The risks associated with financing projects can vary significantly according to the geographical location of the project. While many projects that the banks are asked to consider financing are in compliance with national legislation and permit requirements, they may fall short of international standards and best practice. A detailed understanding of the project’s political and legal framework is required in order to judge the extent to which national requirements meet the risk management needs of international financial organisations.

Use, misuse and abuse of human rights rhetoric: the case of Serbia

National application of human rights law is one of the most important tests of its efficacy. This article examines the integration of international human rights law into Serbia’s legal system. The paper argues that the use of human rights language does not necessarily indicate the proper and correct use of human rights norms

The paper covers the following:

  • an overview on the intersection of international and national law with special reference to Serbia and Montenegro
  • the existing legal framework for the integration of international human rights law
  • an examination of the propriety of human rights law language discourse
  • a discussion on the separation of the executive and the judiciary

The paper makes the following conclusions:

  • the legislative framework in Serbia favours the integration of human rights law
  • despite some successes there some legislative acts and a lack of human right jurisprudence indicates that international human rights law has not been properly integrated into the legal system
  • there has been a misuse of human rights law and clash between judicial and political discourse on human rights
  • the inadequate training of the judiciary has led to judicial deference to the executive branch of government.

Workers’ rights top list of ethical investor concerns

November 23, 2006

A survey of investor has found their key concerns include workers conditions, involvement in arms trade and environmental pollution.

Extract from Environmental Finance:

London, 16 November: Ethical fund managers should favour companies that maintain high standards of working conditions in their supply chains, according to a survey of investors released this week.

UK investment management company Standard Life polled close to 1,200 of its ethical investors, asking them to rank the issues of most importance to them.

Workers’ conditions topped the rankings, which also revealed that the environment was a major concern among investors. The provision of pollution control products or services, and the development and use renewable energy, were placed second and third in terms of importance.

Standard Life Investments manages approximately £130 billion ($245 billion) of assets, £425 million of which is ethically invested. It uses the survey to adapt its investment policy in line with investors’ views on issues such as community involvement, employment policies, corporate governance, alcohol, gambling and animal testing.

The investors said fund managers should avoid investing in companies and countries with poor human rights records, companies involved in the arms trade, and those that are responsible for clearing tropical forests.


Outlining the labour components of the revised Equator Principles

October 18, 2006
Extract from ELDIS:
Ergon / Ergon , 2006
This briefing paper outlines the labour components of the revised Equator principles – Equator II – to assist signatories, their clients and other stakeholders in understanding the new requirements. It introduces the new Equator Principles, which are based on a revised version of IFC Performance Standards – provisions on labour standards and provides an overview of the issues financial institutions must now address. It also suggests some steps they must take to operationalise the new requirements.Until now, the labour component of the IFC policies referenced by the Equator Principles has been limited to occupational health and safety and avoidance of harmful child labour and forced labour. The new IFC Performance Standard 2 (PS2), covers a range of new issues such as non-discrimination, freedom of association and non-employee workers, and also introduces a new set of processes that must be followed.Highlights of the PS2 include:

  • there must be a human resources policy covering terms and conditions and other rights at work
  • all employees must be informed of their terms and conditions and entitlements
  • collective bargaining agreements must be respected, or if not in place, terms and conditions of work must be reasonable and, at minimum, comply with local law
  • the rights to freedom of association and collective bargaining must be respected
  • if rights to freedom of association are restricted in law, clients will enable alternative means for the expression of worker rights
  • projects must not use forced labour
  • projects must not employ children in economically exploitative or hazardous ways, and national laws must be complied with
  • if a significant number of jobs will be lost a retrenchment plan must be drawn up based on non-discrimination and consultation
  • there should be a confidential grievance mechanism
  • workers must be provided with a healthy working environment
  • sub-contracted workers are covered by most of these provisions

The brief argues that the new Equator Principles have the potential to improve conditions for many workers, but the procedures required for assessing risk and the issues that must be considered will be unfamiliar to most private sector banks – as will the possibility of engaging with wider stakeholders, such as trade unions.


Companies find it difficult to Report on Human Rights Issues – bespoke solutions are needed

August 15, 2006

Company reporting on human rights issues – SustainAbility, 2006 The study examines company reporting on human rights issues. It explores the expectations of stakeholders with regard to corporate reporting on human rights, investigates trends in reporting around specific human rights issues, examines the current state of corporate reporting on human rights, and provides a framework for companies to use to review their current and future approach to reporting on human rights. In order to do so the study analysed reports from 35 companies.

Findings of the study include

  • it is difficult to set specific reporting indicators against which all companies should report; instead, stakeholders stated that human rights risks depend upon the company’s operating context at the local level and that reporting should be tailored to account for context-specific concerns and issues
  • while each company must undertake its own human rights risk assessment, stakeholders acknowledged that there are some common risks and related stakeholder expectations within industries
  • while many companies explained that their management systems for human rights have been in place for some time, most started reporting on their performance externally only in the past few years
  • the breadth of reporting on human rights has expanded beyond some of the primary issues such as diversity and workplace issues
  • the depth of reporting is moving beyond policy statements and codes of conduct to performance data and results
  • the number of industries reporting on human rights has increased
  • here is more location-specific reporting
  • the comparability across company reports is slowly increasing
  • however, there is still relatively little reporting on human rights compared to other issues commonly discussed in sustainability reports
  • the most commonly cited audience for human rights reporting information was the socially responsible investment (SRI) community, and in addition, there appears to be increasing interest from mainstream investors, particularly with regards to risk management

Based on these findings the study develops a framework to help companies increase their transparency and accountability with respect to human rights. Original article in Eldis.


Training the oil and gas industry in human rights

August 11, 2006

It is excellent to see guidelines being released that can assist oil and gas companies manage difficult human rights issues. Although, such companies should also consider the value of obtaining some specialist expertise to help them customise the Toolkit, and provide practical advice that is related to the particular experiences and situations that they have already been faced with.

The Training Toolkit aims to raise awareness of human rights issues in the oil and gas industry. It provides managers with a template that can be used and adapted to conform to a company’s policy or position on human rights and applicable domestic laws and regulations. This Toolkit is not intended to be an in-depth instruction on how to conduct human rights training.

Company representatives should review the trainer’s manual prior to using the Training Toolkit to customise it to the needs of their particular circumstances. The trainer’s manual provides information on how to finalise the materials for a company’s specific purposes.

The toolkit examines the history and background of human rights and defines key risk areas for the oil and gas industry. The largest section of the toolkit deals with the engagement with stakeholders, including

  • Non-Discrimination
  • Employment Terms
  • Supply Chain Issues
  • Mitigating Community Impact
  • Indigenous People
  • Land Rights and Resettlement
  • Local Content
  • Relationships with Governments

The toolkit also presents dilemmas and scenarios that may arise form these engagements and presents a decision-making tool.

The Toolkit consists of four sections:

    1. a presentation with the key messages for use in a training session
    2. a workbook to be used in conjunction with the presentation
    3. a trainer’s manual
    4. a resource guide.

    Rachael Bailey discusses how to manage environmental and social risk in project finance

    July 31, 2006

    Applying the Equator Principles can dramatically improve the environmental and social risk profile of project financings. But their application can often be improved. Extract from the Article by Rachael Bailey and colleagues:

    In the three years since their introduction, the Equator Principles have driven substantial environmental and social performance improvements in project finance. These voluntary guidelines, which essentially involve private sector banks committing to apply World Bank/International Finance Corporation (IFC) social and environmental risk management procedures to projects which they finance, have been adopted by institutions accounting for more than 80% of project finance flows.

    There is now widespread awareness of the benefits of using the appropriate expertise at the outset to manage potential environmental and social risks throughout the project cycle, and thereby secure better financial terms at financial close and syndication. Ensuring that environmental and social risks are fully under control now plays a key part in securing confidence in project finance deals.

    The full article can be viewed on the Equator Principles Website or the Environmental Finance website.

    A copy of this article is available here for downloading. ef7equator_bailey_p28-30-v2.pdf