The United Nations Guiding Principles on Business and Human Rights (UNGPs) set out the expectation that businesses should not harm fundamental human rights. Eversheds International have published a report, following a survey, regarding the change that needs to happen in businesses in relation to respecting human rights.
The results have shown that 31% of business are making progress however, this change is happening slowly. One of the main reasons for this seems to be the confusion over who has responsibility for human rights risks within the business. 76% are of the view that management of ethical risk should fall to lawyers.
Main challenges to be faced
The results of the survey show that awareness and lack of resources are the biggest challenges for businesses implementing respect for human rights. Moreover, very few companies report on their management of human rights risks, resulting in a lack of transparency. What is crucial too is that the culture change comes from the top – weak senior level commitment could be very problematic and could greatly impede progress.
The report highlights the fact that changing the culture and developing and implementing a human rights programme is hard enough without external pressure (e.g. negative publicity, competitor activities, new reporting duties etc.). With that in mind, Eversheds recommends organisations to act as soon as possible, away from adverse scrutiny and on their own terms.
The UNGPs encourage businesses to use any leverage they may have to prevent or mitigate any potential human rights issues. Nearly half (47%) of those surveyed have begun to do so. Leverage is attracting attention because there are often long and complex supply chains involving countries with lower human rights protections, or poorly enforced protections. Depending on the organisation, there may be a delicate balance to be achieved in this leverage, which should be informed by the severity of any human rights risks. Eversheds warns that simply terminating a supplier may actually be more damaging to workers in the long run.
New opportunities for lawyers
As mentioned above, the majority of those surveyed consider that managing the ethical risk should be part of a lawyer’s role. The legal department in a business, as a ‘trusted advisor’, has a critical role in shaping a business’s approach to respecting human rights. Eversheds cautions that a compliance-driven approach won’t heed adequate results. The preferable approach is showing ethical leadership by actively resolving any human rights dilemmas encountered by the business. This would be more sustainable in the long run.
As an example of what could be done, the report undertook a company case study of British Telecommunications (BT). BT have produced a statement of business practice entitled ‘The Way We Work’, which sets out the company’s commitment to human rights. Following this, an inter-departmental human rights project team was set up and led by the in-house legal team to undertake risk mapping and assessment exercises. One of the strongest factors to this success seemed to be the strong personal commitment of key executives.
Reporting
Eversheds have included a step-by-step guide to reporting. This essentially involves setting up a funded and focused human rights working party who reports to an engaged board; producing a governance action plan laying out training, policies and practices to improve or develop; producing a risk prioritisation report; producing a human rights action plan; and finally publishing a human rights report.
To view the full report, click here.