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(d) Use Limitation Principle
Personal data should not be disclosed, made available or otherwise used
except:
with the consent of the data subject; or
by the authority of law.
Part C “ Overview of the Social Aspects of Business Risks
310



(e) Security Safeguards Principle
Personal data should be protected by reasonable security safeguards against
such risks as loss or unauthorised access, destruction, use, modification or
disclosure of data.
(f) Openness Principle
There should be a general policy of openness about developments, prac-
tices and policies with respect to personal data. Means should be readily
available of establishing the existence and nature of personal data, and the
main purposes of their use, as well as the identity and usual residence of
the data controller.
(g) Individual Participation Principle
An individual should have the right to:
obtain from a data controller, or otherwise, confirmation of whether or
not the data controller has data relating to him;
have communicated to him, data relating to him within a reasonable time;
at a charge, if any, that is not excessive; in a reasonable manner and in a
form that is readily intelligible to him;
be given reasons if a request made under subparagraphs (i) and (ii) is
denied, and to be able to challenge such denial; and
challenge data relating to him and, if the challenge is successful to have
the data erased, rectified, completed or amended.
(h) Accountability Principle
A data controller should be accountable for complying with measures
which give effect to the principles stated above.

Given that the overriding concern for the proposed Indian legislation is to facil-
itate the growth of the nascent BPO industry, the Indian government can be
expected to consider the above principles in enacting any legislation for data
protection. Further, the predominant issue that the Indian legislation is likely
to address is the protection of the foreign nationals™ data, if transferred to the
Indian subcontinent. Whether or not the proposed amendment to the IT Act
will also cover data of Indian citizens is yet to be seen.
In view of the above, any Indian legislation is likely to put in place a
mechanism that will protect against the misuse of personal data that is in one™s
possession rather than misuse of data that is in one™s ownership and the vari-
ous measures of adequacy that the proposed legislation is likely to address
include:

Widening the scope of data protection to include information collected from
foreign citizens;
Putting in place an obligation on both the Indian government and others to
maintain the integrity of that data and providing for appropriate procedures
(e.g. enforcement authorities) to ensure compliance;
Restricting access to data of foreign citizens by statutory and regulatory
authorities; and
Making data theft and misappropriation a criminal offence.
Chapter 13 “ Social and cultural risk management 311



Given the concern of personal data being transferred to India and the growing
importance of the BPO industry to the Indian economy there is no doubt that
appropriate legislation is required. The question that remains to be seen is what
shape the regulations take and how soon consensus is reached to actually enact
the laws that are undoubtedly needed in India. One way forward would be for
business to deal with the issues in a proactive manner.


Chapter summary
There is no doubt that cultural risk management “ which affects also issues
of brand and strategy “ is a crucial aspect of risk management and should be
considered as an ongoing issue as well as a transnational concern.
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14
Human resources risk (human rights
inside the workplace)
14 Human resources risk (human
rights inside the workplace)



CHAPTER OVERVIEW
Your employees, including managers and the executive, are the key to
long-term success and sustainability. A skilled, well-trained, determined
and motivated workforce can overcome just about any challenge the risk
environment of the 21st century can throw at it. If treated with dignity,
equality and with respect to their rights as humans your fellow employees
will assist you to become a sustainable durable organisation.
The emphasis of this chapter is more upon the SERM approach to
helping achieve this and a review of the newly emerging risk issues to do
with human rights within the workplace like:
Child and forced labour;
*
Discrimination legislation covering age and disability discrimination;
*
Freedom of association;
*
Working hours, pay and conditions;
*
Discrimination;
*
Privacy of employees; and
*
Whistleblowing as a right?
*
There is some coverage of the more traditional human rights aspects of
human resources management, but it is felt that these have been covered
in more mainstream management techniques case books. Health and
safety rights are covered in Chapter 16 in more depth.
The aspects of human rights legislation that are outside the workplace
or often involve subcontractors are covered in the Chapter 15, as is a frame-
work for risk managing human rights issues.



SERM risk overview
Results relating to human resources show that:
Poor human resources (internal human rights) risk accounts for a potential
loss of business value of 0.7% of the companies™ market value (the average
net risk of the top 500 EU and US companies); and
Chapter 14 “ Human resources risk (human rights inside the workplace) 315



This risk exposure has been reduced from 1.1% of market value by good risk
management techniques (the risk reduction/management factor).

There are benefits to be accrued from a proactive policy on this issue:

Trained workers are productive workers, and also have the skills to complete
their tasks therefore avoiding additional stress and health risks (as explored
in Chapter 16);
Happy workers also make productive workers; and
Reputation is particularly important when the labour market is tight.

The following graph shows the poor human resources (internal human rights)
risk by sector.


Human Rights/Resources (Internal)
2.5%

STEEL & OTHER METALS
2.0% TELECOMMUNICATION
SERVICES
Net (Residual) Risk




OIL & GAS
1.5%
MINING

FOOD PRODUCERS &
PROCESSORS
1.0%
LEISURE & HOTELS

SECTORS
0.5%
FTSE 350 AVERAGE


0.0%
0.0% 1.0% 2.0% 3.0% 4.0%
Gross (Inherent) Risk




Key questions
How do human rights internally affect risk levels?
What are the risk management techniques that can improve human resources
and the human aspects to the drive for sustainability and the development of
a SERM risk system?
How can employers balance the interests of external stakeholders with inter-
nal ones?
Part C “ Overview of the Social Aspects of Business Risks
316




Terminology
For the purposes of this chapter human resources risk is a term that is inter-
changeable with internal human rights and human capital terminologies.
* Human capital: the set of skills which employees acquire on the job,
through training and experience, and which increase their value in the
marketplace;
* Human resources: this refers to the individuals within the firm, and to
the portion of the firm™s organisation that deals with hiring, firing, train-
ing and other personnel issues. This article addresses both definitions;
* Human Rights Act: a piece of legislation that sets out individual rights
and freedoms under law, this can be applicable to members of an organ-
isation™s workforce. Many countries have similar rights enshrined
into law;
* Poor human resources management: extent to which the company™s HR
policies and practices are found wanting in terms of generating stress,
discrimination, harassment, impact on employee privacy; and
* Internal human rights: the extent to which the organisation follows
codes and legislation with relevance to traditional human resources reg-
ulations as well as discrimination, harassment and employee privacy.



Overview
Every company is dependent upon its staff and management and it is unlikely
that any organisation in the future will be able to function without staff. As
Peter Drucker notes:
The organisation is, above all, social. It is people. (˜Toward the new organisation™ in
Hesselbein, F. et al. in Organisation of the Future, 1997)

Indeed a sizable proportion of organisational value, in the form of intangible
assets, is thought of as being the organisation™s staff. Business writers like
Charles Handy estimate that on average employees and intellectual assets are
usually worth three to four times more than their tangible book assets (The
Hungry Spirit, 1997). Research from the UK has confirmed the importance and
causal linkage between good human resource management practices and pro-
ductivity and profitability levels; the Impact of People Management Practices
on Business Performance (Patterson et al. 1997) found that there was a 5% vari-
ance in profitability between those with the most satisfied and committed staff
and those companies without these advantages.
Factors influencing human sustainability in the workplace, according to
Paul Gollan in Sustainability: The Corporate Challenge of the 21st Century,
Dunphy et al. (2000), are:
Employee engagement, involvement and consultation: increased consultation
with employees increases their sense of responsibility and other evidence
Chapter 14 “ Human resources risk (human rights inside the workplace) 317



suggests that greater consultation and involvement of employees can produce
a more satisfied and productive workforce as well as gaining more committed
employees, thus producing real financial benefits;
Career development and organisational learning: there is evidence of links
between the level of investment in employees and stock market performance
(Bilmes et al. 1997) from the Boston Consulting Group™s review of 100
German companies. There is also evidence from the UK that those companies
that have the Investors in People standard (IiP) have a 1% improved market
value over base. Making an investment in staff can provide real business ben-
efits. Investors in People organisations are reported to see a rapid improve-
ment in their overall performance including:
Clearer links between operational plans and people development strategies;
People development focused on identified business needs;
Better understanding of the costs and benefits of developing employees;
An increase in employees™ skill, competence and commitment;
Greater sales, productivity and profitability;
Reduced costs and stock levels;
Improvements in quality and customer service; and
Better communication.
(From http://www.investorsinpeopledirect.co.uk/)
Downsizing and outsourcing: the trends of corporate change and restructuring
may have a negative impact upon the long-term sustainability of organisations
and an effect on the remaining employees and their morale. Although stream-
lining operations has benefits for organisations it is viewed that this process
can be carried too far in order to temporarily inflate profits, impress share-
holders or distract management attention from more structural problems;
Establishing a work/life balance: a more balanced and rewarding life can
have the benefits of more balanced staff, more loyalty and more produc-
tivity. A survey by Gemini Consulting found that 44% of respondents (out of
10 300 employees across 10 countries) would leave their jobs tomorrow to
move to a job that provided them with more opportunity for advancement
(Gemini Consulting Report 1998 quoted in Dunphy 2000). Work insecurity
has also been found to contribute to higher levels of ill-health, disease and
mortality; and
Working with or developing institutions for a sustainable future that support:
part-time as well as full-time workers; training and development; and
flexibility as well as the encouragement of skilled workers to remain in
employment.

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