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Increased organisational flexibility and ability to gain from new ideas, tech-
niques, processes and change;
Chapter 14 “ Human resources risk (human rights inside the workplace) 323

Increased organisational creativity and problem solving; and
Mirroring the society the organisation is within, providing more diverse
thinking, research and increased abilities to spot and utilise niche markets.

Valuing diversity is not just about the avoidance of risks and litigation but the
ability to gain the most from your key assets, your staff. This can be achieved by
the activities we explore in the following sections of this chapter.

Human rights standards relating to the workplace
UN Universal Declaration of Human Rights (UDHR)
This is the primary document asserting the value of human rights and it came
into being in 1948. This represents a set of 30 fundamental and universal rights
forbidding slavery, racial or sexual discrimination and arbitrary arrest. It also
asserts the freedom of speech and freedom of association.
The elements of the nine principles of the UN Global Compact covering
corporate behaviour that are relevant to the workplace include:

Freedom of association and the effective recognition of the right to collective
bargaining; and
The elimination of discrimination in respect of employment and occupation.

The following elements are indirectly relevant and are reviewed in the next

Support and respect the protection of international human rights within their
sphere of influence;
Make sure their organisations are not complicite in human rights abuses;
The elimination of all forms of forced or compulsory labour; and
The effective abolition of child labour.

The ILO Declaration of Fundamental Principles and
Rights at Work
Adopted in 1998, the ILO Declaration on Fundamental Principles and Rights at
Work is an expression of commitment by governments, employers™ and work-
ers™ organisations to uphold basic human values. All ILO member states have
an obligation to respect the principles, the main elements of which are listed
below. The Declaration covers four areas:

Freedom of association and the right to collective bargaining;
The elimination of forced and compulsory labour;
The abolition of child labour; and
The elimination of discrimination in the workplace.
Part C “ Overview of the Social Aspects of Business Risks

Human rights at work
The International Labour Organisation (ILO) was established as a specialist UN
agency and has adopted over 70 conventions on labour standards and work-
place conditions since its creation in 1919.
The key ILO conventions covering workplace human rights include the:

Equal Remuneration Convention No. 100 (1951): calls for equal pay and ben-
efits for men and women;
Discrimination in Employment Convention No. 111 (1958): calls for the elim-
ination of discrimination in employment or working conditions on the
grounds of colour, national extraction, political orientation, race, religion or
social origin;
Freedom of Association and the Protection of the Right to Organise
Convention No. 87 (1948): establishes the right of all workers and employers
to form and join organisations of their own choosing;
Right to Organise and Collective Bargaining Convention No. 98 (1949): pro-
vides protection against anti-union discrimination and work-related organi-
sations from acts of interference; and
Covered in Chapter 15 but related to employee issues are:
Forced Labour Convention No. 29 (1930): requires the suppression of
forced or compulsory labour (except convict labour);
Abolition of Forced Labour Convention No. 105 (1957): prohibits the use of
forced or compulsory labour;
Minimum Age Convention No. 138 (1973): calls for the elimination of
child labour and of employment below the age of the completion of com-
pulsory education; and
Worst Forms of Child Labour No. 182 (1999): calls for the prohibition and
elimination of certain forms of child labour.

Social accounting
The Council for Economic Priorities (CEP) set up a social analysis framework
SA8000 which is an auditable certification standard based on the six basic con-
ventions of the ILO, as well as the UN Universal Declaration of Human Rights
and the UN Convention on the Rights of the Child. According to the framework
an organisation:

Shall not engage in child or forced labour, nor should employees have to
lodge deposits or leave identity papers with the company;
Shall provide a safe and healthy working environment and shall minimise as
far as reasonable practicable, the causes of hazards inherent in the working
environment; and
Shall not engage in or support discrimination in the advertising of vacancies,
or the hiring, compensation, training, promotion, or retirement of employees
based on caste, disability, gender, race or sexual orientation.
Chapter 14 “ Human resources risk (human rights inside the workplace) 325

Case studies
With 130 000 individual cases brought against companies each year in the UK
there is a raft of legal precedence with which the financial impact upon organ-
isations can be assessed. The scale of the legal actions could be set to increase.
In the US there are mass class actions for race and sexual discrimination
grounds. Some companies, like Coca-Cola and Ford, are estimated to have set-
tled claims in excess of US$100 million each.
In the UK there is a worrying trend of reduced or missing contributions to
pension™s funds. For example, Serco is one of the outsourcing companies which
run the Docklands Light Railway. It also had a contract with Regional Airports,
which finished in March 2004, after which the airport group discovered Serco
had made no pension contributions for the last three years of the millennium
(˜Pension baggage falls off the Airports™ trolley™, Daily Telegraph, 12 May 2004).
There is a growing trend towards UK companies outsourcing jobs to off-
shore locations, like Tesco™s switching of 420 IT and invoice processing jobs to
India (Financial Times, 23 July 2004). The risk management of this issue needs
to be strengthened, and there may be increasing calls for UK job protection as
there have already been in the US.
Surveillance and harassment of staff may be on the increase and compa-
nies need be aware of where the differences between security and surveillance
and the invasion of employees™ privacy, and where the pressurising of staff,
become harassment.
Diversity within the workplace is something to be encouraged and the
number of court cases is on the increase within the UK. An application for a
breach of the Race Relations Act (1976) (and 2000 Amendment) has been
lodged against Reuters plc, with an employee citing lower pay than white coun-
terparts and having been passed over for promotion. The company has said it
has a clear policy in place. In the US the scale of the cases is quite different, an
example is that Wal-Mart has a sex discrimination lawsuit from more than 1.6
million current and former female employees.
UK bank Lloyds TSB has allowed 17 000 employees to work flexible hours.

What are the issues?
There are a variety of business compliance issues with regard to risk managing
internal human rights, otherwise known as human resources. These issues
should be standard place compliance issues (depending on country of loca-
tion). There is a wide variety of case studies and issues analysed in brief which
cannot be covered here as they need detailed country specific risk assessments.
Where possible we indicate countries where these issues are stated by Impactt
Limited to be of a high risk nature: www.impacttlimited.com/site/5thanniver-
Organisations are more vulnerable where knowledge of employees and
associates is inadequate. As part of a risk management system staff due dili-
gence checks and performance reviews are vital in the successful running of
Part C “ Overview of the Social Aspects of Business Risks

any organisation as they access the employee™s potential and provide the
employer with opportunities for career progression.
Employees can be a source of great risk and are interlinked with all the
other chapters of the book. Although employees are expected to act for the ben-
efit of the employers this is not always the case and staff can be responsible for
acts of fraud, corruption, bad management, errors like pollution incidents and
plain negligence.
What is to be recognised is that staff are also the agents of corrective action
and benefit within organisations and it is these qualities that need to be nurtured.
In this section we look at some of the risk issues within organisations as
interaction with others always presents both risks and opportunities. We will
be looking at a range of emerging risk issues, including age, race, pregnancy,
religious and sex discrimination, as well as sexual orientation and gender reas-
signment (sex change). The framework for reviewing them is based upon the
order that they are to be reviewed within the SA8000 standard.

Child labour
It is to be ensured that no workers under the age of 15 “ or 14 for some devel-
oping countries “ should be involved in working practices. Rather those chil-
dren found to be involved in such practices should have remediation assistance
from the organisations responsible, such as educational assistance (UN Norms
Article 6). This issue is reviewed in more depth in the next chapter.
There are an estimated 250 million children under the age of 14 working
around the world, 120 million of them working full time. The most serious
forms of child labour are when children are exploited, put at risk and/or denied
an education and a childhood. Bangladesh, India, Indonesia, Malaysia and the
Philippines are examples of high risk countries. Forced and child labour are
also covered in Chapter 15.

Forced labour
There should be no forced labour, or the holding of important documents or
identity papers (like passports) by employers or related third parties (UN
Norms Article 5 and UDHR Article 4 on slavery and servitude). This issue is
reviewed in more depth in the next chapter.
If workers do not have a choice about whether or when they work and are
not free to leave their employment it is a case of forced labour. This includes
debt bondage and forcing workers to work overtime. High risk countries
include China and India.

Health and safety
There is a general human rights view that organisations should: provide a safe
and healthy work environment; take steps to prevent injuries; provide regular
Chapter 14 “ Human resources risk (human rights inside the workplace) 327

health and safety worker training; offer a system to detect threats to health and
safety; make available access to bathrooms and potable water (UN Norms
Article 7). This risk issue is covered in more depth in Chapter 16.

Freedom of association and collective bargaining
Freedom of association means that workers are able to form or join groups of
their own choosing, including trade unions. Collective bargaining means that
these groups can negotiate with management, on behalf of workers on issues
such as pay and conditions (UN Norms Article 9). UDHR Article 23 states that
everyone should have the right to join a trade union.
There is a strong correlation between freedom of association and collective
bargaining and the reduction of labour abuses. Examples of high risk countries
are Bangladesh, Cambodia, China, the Philippines, Sri Lanka, Thailand and

Working hours, pay and conditions
Wages for many workers around the world are too low to support a decent stan-
dard of living. As a result, workers often end up working very long hours. In
many workplaces, workers routinely work 12“16 hours a day, seven days a week
in peak periods. Often they are not allowed to refuse overtime and are not paid
at a higher rate for overtime hours. This way of working threatens quality, pro-
ductivity and worker welfare. Examples of high risk countries are Bangladesh,
Cambodia, China, Indonesia, Malaysia, the Philippines, Sri Lanka, Thailand and
The global guidelines from the UN UDHR Article 23 and UN Norms Article
8 note that organisations should provide workers with a remuneration that
ensures an adequate standard of living for them and their families to have a dig-
nified existence. Risk management systems should also try to comply with the
spirit of these articles and in more detail with the applicable local laws of coun-
tries of operations. There are also the SA8000 guidelines which act as a good
benchmark standard and the following should be provided:
No more than 48 hours™ work per week with at least one day off for every
seven day period;
Voluntary overtime paid at a premium rate and not to exceed 12 hours per
week on a regular basis; however
Overtime may be mandatory if it is part of a collective bargaining agree-
ment; and
Wages paid for a standard work week must meet the legal and industry stan-
dards and be sufficient to meet the basic need of workers and their families;
with no disciplinary deductions.
If risk management systems are in place they need to be enforced and it made
clear to the management and contractors that the standards are to be followed.
Part C “ Overview of the Social Aspects of Business Risks

This is a difficult activity quite often when the barriers of distance and language
are added. This means that audits need to be more thoroughly conducted.

Traditional Ethical Audit
Traditional Ethical Audits in suppliers™ organisations are usually ineffec-
tive for checking the quality of conditions because of the coaching of staff
and falsification of data and records to meet the auditors™ expectations.
Rosey Hurst, director of Impactt, an ethical trading consultancy, says, ˜In
none of the factories we have worked in have we ever been able to get the
working hours down to legal limits.™

Discipline and abuse of workers
Organisations should prevent corporal punishment, mental or physical coer-


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