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* Country risk research can be found at Impactt:
* Global Reporting Initiative “ GRI: including a GRI content index and
* International Labour Organisation:
Chapter 14 “ Human resources risk (human rights inside the workplace) 345

* Labour Start:
* National Labour Committee:
* United Nations Development Programme:
* United Nations “ Universal Declaration of Human Rights (UDHR):
* United States Department of State, Human Rights Reports (2001):

Chapter summary
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. The workforce is the key to long-term profitability
and survivability in an age where traditional competitive advantages are being
eroded as all organisations have access to similar resources, like instantaneous
communications technologies, such as intranets, the internet and video confer-
encing. It therefore is increasingly important how well we can communicate as
the speed at which we can do it becomes universal.
Staff and management training on sustainability risk management issues
should also form part of a larger commitment to organisational learning and
knowledge management. This could take the form of online training modules
or additional information and resources for staff that wish to progress their
knowledge in specific areas of sustainability-related issues. This may include
the establishment of programmes that encourage employee participation in the
wider community to find out how an organisation can benefit or impact upon
local communities and other stakeholder groups.
If treated with dignity, equality and respect to their rights as humans your
fellow employees will assist you in becoming a sustainable durable organisation.
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Human rights outside
the workplace
15 Human rights outside the

This chapter focuses upon the relationship between human rights and
organisations with particular reference to the human rights risks that may
face operations. The chapter identifies frameworks for human rights miti-
gation and how effective management of human rights risks may bring
benefits to business. Topics that are covered include:
* Human rights standards;
* A human rights risk management framework; and
* A review of some of the contemporary risk issues, such as:
Child labour;
Labour practices: compulsory and forced labour;
Working practice;
Oppressive regimes; and
Indigenous peoples.

SERM approach
Research and analysis results indicate that:
Human rights (external) risk is an average of 0.3% of market value of the top
500 US and EU companies; and
This risk exposure has been reduced from 0.4% of market value by good risk
management techniques (the risk reduction/management factor).
How should organisations respond to this level of risk and the human rights
Broadly speaking a very common approach is that of the view that human
rights responsibilities lie solely with states and that their duties only extend to
complying with local laws. An anomaly with this approach is that the countries
associated with high human rights risks also have few legal frameworks to com-
ply with. It is also an expanding view that respect for human rights, potential
damage to reputations and effective management of human rights challenges
are becoming a bottom-line issue.
Chapter 15 “ Human rights outside the workplace 349

The risk issue of human rights covers a series of rights and freedoms which
are considered essential to people™s enjoyment of life and respect for their
human dignity. There are several methods of categorising human rights, includ-
ing: civil and political rights (such as the right to life and the protection against
torture, and the right to a fair trial); cultural, economic and social aspects where
the emphasis is on the material and social cultural welfare of persons such as
the provision of housing, clothing and food; and emerging groups rights, such
as the right to a healthy environment.
The emphasis on various elements of these varies rights vary greatly from
country to country, and although the responsibilities to respect, protect and ful-
fil these rights primarily lie with states we will follow what are considered to
be international norms in this chapter.
The increased influence of human rights is also identifiable in the mount-
ing litigation against multinationals and the serious reputational damage that
can be caused. Companies have faced litigation in courts in the UK, US and
Belgium alleging complicity in human rights abuses overseas in countries such
as Nigeria, Myanmar (Burma), Sudan and South Africa.
Although a risk assessment may not show a high level of risk from the
issues included in this chapter it is certain that courts will show an increasing
readiness to accept such cases as at least legally admissible and this will lead to
increased public attention as a result of the media involvement.
Assessment of a company is based on the extent to which the management
implements its policies to protect employees from the following abuses:
Child labour, as defined by the ILO Convention 138;
Forced and compulsory labour; and
Unethical disciplinary practices, such as:
Beatings, floggings and other physical abuse;
Threats to the employee™s family or relations;
Undue verbal abuse;
Use of unregulated security forces; and
Transgression of indigenous rights.
Organisations may be affected by human rights issues both internally or exter-
nally in their ˜home™ markets or in their foreign operations. The levels of risk
increase when active in countries with poor human rights records and in high
impact sectors, for example extractive industries and textiles industries as well
as those in the graph below.
This rise of the corporation magnifies the fact that business does not oper-
ate in a vacuum and that human rights may be directly or indirectly affected by
corporate conduct. As such, a degree of responsibility and accountability is
increasingly being expected of a business:

At the end of the day, having a strong human rights policy and a sound implementation
strategy is about risk management and reputation assurance. There can be no denying
that human rights are a bottom-line issue. We need to see more companies adopting
human rights principles and being held to account for putting them into action. (Mary
Robinson, the former UN High Commissioner for Human Rights)
Part C “ Overview of the Social Aspects of Business Risks

The graph also shows the human rights (external) risk by sector.

Human Rights (external)

Net (Residual) Risk



0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2%
Gross (Inherent) Risk

Human rights appraisals can form a critical part of stakeholders™ view of organ-
isations as non-compliance with social ˜norms™ as well as laws can have a major
impact on intangible assets like reputations. As mitigation factors can prove
quite cost effective it is not always seen that risk management of these issues
needs to be a burden upon organisations. This is noted by the Ex US Secretary
of State Madeline Albright:

The best companies realise that they must pay attention ¦ to universal standards of
human rights, and that in addressing these needs and standards, there is no necessary
conflict between profit and principle. (˜Rights groups join companies to state principles™,
Wall Street Journal, 7 August 2001)

The human rights aspects of companies have no entrenched criteria but gener-
ally involve responsible treatment of:
The internal business community (largely covered in the previous chapter):
Direct employees; and
Equality for employees, including women and those with disabilities in
the workforce.
The external business community:
Indirect employees and suppliers;
Child labour;
Forced labour; and
Chapter 15 “ Human rights outside the workplace 351

The wider community:
Indigenous communities;
Local communities; and
National communities.
These issues can also extend into the area of customer rights, in that the cus-
tomer receives what they believe they have purchased and that the item was
labelled and described accurately and that the item is fit for purpose or con-
sumption. This is an area of emerging importance and customer groups are
finding their voice more and raising concerns about products more often. An
example of the new use of technology for this purpose is that a website has been
established where all customers of a budget airline can publicise their com-
plaints. The company in question even tried to have the website closed down
by applying to the World Intellectual Property Organisation for a case brand
name infringement. It was found that there was no evidence of acting in bad
faith so the site can remain. Is this an example of the right to freedom of speech?

The business opportunities
Human rights do not simply bring bad news for companies. Where there is an
effective risk management of human rights and by adopting a proactive
approach, it may be able to turn human rights risks into business opportunities.
The potential benefits include the following:
Improved risk assessment and management and corresponding reduction in
An improvement in decision-making processes like in the handling of ethical
dilemmas; and
Enhanced relationships with stakeholders including:
Improved and potentially more productive business relationships with
suppliers and contractors; also a reduced potential for indirect reputa-
tional damage from subcontractors and suppliers if it has been clearly
communicated that standards are to be met;
Enhancement of customer loyalty and brand value;
The raising of employee trust levels, increased morale, staff retention and
ability to attract quality personnel. There may be the ability of these factors
acting as an improvement on productivity;
The financial community may allow greater access to capital, or reduced
insurance premiums for those organisations that abide by human rights
codes and standards and have a history of compliance with international
Positive relationship with local communities, governmental organisations
and international NGOs, which could lead to the obtaining of licences to
operate in areas where they might not otherwise have been able to; and
The potential for reduced negative press coverage and even increased lev-
els of positive media representation.
Part C “ Overview of the Social Aspects of Business Risks

The standards and codes that can lead to the development of a sustainable
system of ensuring human rights for the activities of organisations are viewed as

Human rights standards
There is a wide range of codes, standards, benchmarks, indicators and report-
ing on human rights issues, but slowly there is progress towards a more
common set for organisations to work with. This process will take a while to be
developed and adapted to be usable by organisations in the same way it took
decades for standards governing the environment, health and safety issues and
labour best practice. Some of the main international compacts, laws and
agreements are as follows.


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