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deal with freedom of expression and beliefs;
Workplace rights (see Chapter 14) or the rights of workers: organisations
Not use forced or compulsory labour (UN Norms Article 5 and UDHR
Article 4 on slavery and servitude);
Not use child labour, that they, ˜shall respect the rights of children to be
protected from economic exploitation™ (UN Norms Article 6);
Part C “ Overview of the Social Aspects of Business Risks

Provide a safe and healthy working environment, as set forth in the rele-
vant national and international legislation, as well as international human
rights and humanitarian law (UN Norms Article 7);
Allow freedom of assembly and association without compulsion and effective
recognition of the right to collective bargaining (UN Norms Article 9). UDHR
Article 23 states that everyone should have the right to join a trade union;
Provide workers with a remuneration that ensures an adequate standard of
living for them and their families to have a dignified existence (UN Norms
Article 8, also UDHR Article 23);
Ensure that there is equal pay for equal work (also UDHR Article 23); and
Ensure that there is a reasonable limitation of working hours, and sufficient
entitlement to paid holidays to allow rest and leisure (UDHR Article 24).
Organisations and business enterprises should have respect for national
laws and process, including the avoidance of bribery and corruption meas-
ures and shall:
˜recognise and respect applicable norms of international law, national laws
and regulations, as well as administrative practices, the rule of law, the
public interest, development objectives, social, economic and cultural
policies including transparency, accountability and prohibition of corrup-
tion, and authority of the countries in which the enterprises operate™ (UN
Norms 10);
˜not offer, promise, give, accept, condone, knowingly benefit from, or demand
a bribe or other improper advantage, nor shall they be solicited or expected to
give a bribe or other improper advantage to any Government, public official,
candidate for elective post, any member of the armed forces or security
forces, or any other individual or organisation™ (UN Norms 11); and
˜respect economic, social and cultural rights as well as civil and political
rights and contribute to their realisation, in particular the rights to devel-
opment, adequate food and drinking water, the highest attainable standard
of physical and mental health, adequate housing, privacy, education, free-
dom of thought, conscience, and religion and freedom of opinion and
expression, and shall refrain from actions which obstruct or impede the
realisation of those rights.™ This is quite a lot and almost puts business
organisations on a parity with governmental bodies in terms of the actions
recommended (UN Norms 12).
Organisations shall respect consumer and environmental protection:
Act in accordance with fair business, marketing, advertising practices and
ensure product safety and quality (UN Norms 13); and
Conduct their activities in a manner which contributes to the wider goal of
sustainable development and environmental protection and act in accor-
dance with national laws and regulations and international agreements
and standards (UN Norms 14).

UN Norms Articles 15“19 are general provisions on implementation of the arti-
cle. Other UDHR Articles include numbers 13“15 that note the freedom of
movement within the individual™s own nation™s borders, the right to leave, the
Chapter 15 “ Human rights outside the workplace 359

right to seek asylum abroad for political crimes and the right to nationality.
Article 16 is the right to marry freely; Article 17 the right to own property;
Article 21 provides the right to take part in government, to have equal access to
public services and to have genuine elections with secret ballots; Article 22
gives the right to social security and the rights that assist the free development
of personality within an individual™s nation resources.
The UN Norms can also assist in the management of human rights expec-
tations of stakeholders, of the communities, governments and NGOs, local busi-
nesses and other interested parties. They can act as a basis for dialogue,
providing an opportunity for organisations to engage with stakeholders and to
promote common understanding as to the scope and limitations of the human
rights issues each is responsible for, and to what extent.

Best practice in the management of risks
The following are examples of general good company policy in risk
British American Tobacco, the tobacco giant, has been congratulated in
public by the government and NGOs for pulling out of Burma; and
R.J. Reynolds, another tobacco company, note (in their company™s Standards
of Business Conduct, p. 17) that:
The Company and all its employees are prohibited or severely restricted from export-
ing to, or entering into transactions with, countries or nationals of countries embar-
goed by the US government.

A description of policies, guidelines, corporate structure and procedures to
deal with all aspects of human rights relevant to operations;
Policies that relate to existing international standards such as the Universal
Declaration and the Fundamental Human Rights Conventions of the ILO;
Provision of employee training concerning all aspects of human rights rele-
vant to operations; and
Evidence of consideration of human rights impacts as part of investment and
procurement decisions, including selection of suppliers/contractors and that
there are monitoring systems.

Some contemporary risk issues
New legal risks will emerge as legislation is developed or, in the case of this
example, rediscovered. The statute at issue, the Alien Tort Claims Act 1789,
was virtually dormant until being revived in a series of court decisions since
1980. To date, major brands including Unocal, Chevron Texaco, Union Carbide,
Exxon Mobil, Gap, Coca-Cola, Del Monte, Citigroup, Ford and Nike have been
sued under the above act for complicity in human rights violations. The cases
form the legal basis for suing multinational corporations in the US courts for
human rights violations abroad (˜Analysis: Is trying to kill the Alien Tort
Part C “ Overview of the Social Aspects of Business Risks

Claims Act digging for fool™s gold?™, EC Newsdesk, 13 May 2004). This trend for
increased legislative pressure upon organisations is set to increase.
Another trend is that stakeholders are using their collective will in place of
effective legislation. Examples of this trend are:
Shareholder power being demonstrated by the California Public Employees™
Retirement System (CalPERS) which is one of the world™s largest pension
funds and the US™s largest public pension fund with assets totalling $217.6
billion (as of 30 September 2006). In February 2001 they surprised the invest-
ment world by announcing they would be withdrawing their funds from
Indonesia, Malaysia, the Philippines and Thailand, as they did not meet
investment guidelines standards as a result of labour standards and levels of
democracy and press freedom; and
The UK government prefers a more informal approach to these ethical issues at
the moment and exerts pressure ˜behind the scenes™. For example: human
rights activists like Amnesty International and Transparency International
allege that companies are not always aware of the conditions of workers over-
seas; and NGOs are requesting increased disclosure of organisations™ labour
standards procedures to avoid future criticism from them.

Child labour
With 192 nation states signing up to the UN Convention on the Rights of the
Child (1990) it is perhaps the most widely accepted human rights convention,
with the only main recalcitrants being Somalia and the United States. The global
support for the protection of children™s rights is slowly having a beneficial
impact upon the avoiding of their mistreatment but there is still widespread dif-
ficulties faced by children, including that of slave and enforced labour.
The definition of child is: any person less than 15 years of age, unless the
local minimum age law stipulates a higher age or if the local minimum age law
is set at 14 years of age in accordance with developing-country exceptions
under ILO Convention 138.
The International Labour Office (ILO) International Programme on the
Elimination of Child Labour says child labour, which involves one in every six
children in the world, can be eliminated and replaced by universal education
by the year 2020 at an estimated total cost of US$760 billion. In a new study
entitled ˜Investing in Every Child, An Economic Study of the Costs and Benefits
of Eliminating Child Labour™, the ILO say the benefits of eliminating child
labour will be nearly seven times greater than the costs (see www.ilo.org/
What™s good social policy is also good economic policy. Eliminating child labour will
yield an enormous return on investment “ and a priceless impact on the lives of children
and families.

This is according to the ILO Director-General Juan Somavia. The ILO says the
number of child labourers worldwide fell by 11% between 2000 and 2004, from
246 million to 218 million worldwide, but of these, 179 million “ or one in
Chapter 15 “ Human rights outside the workplace 361

every eight children worldwide “ are exposed to the worst forms of child
labour, including work in hazardous environments, slavery or other forms of
forced labour, and illicit activities such as drug trafficking and prostitution.
High risk countries are thought by experts to be Bangladesh, India, Indonesia,
Malaysia and the Philippines.
As part of its sustainable risk management systems an organisation should
have a policy which states that it excludes child labour from its operations (as
defined by the ILO Convention 138) and the extent to which this policy is visi-
bly stated and applied.
This is also an issue that is more common in the western world than might
be expected, whether directly or indirectly through contractors and suppliers:

The largest fine occurred in Surrey, one of the wealthiest areas of Europe. The
courts imposed fines of approximately £34 000 against a very large fast food
giant for using under-age staff;
The Boston Common Asset Management and the First Swedish National
Pension Fund (Första AP-fonden), withdrew a child labour resolution when
the target company, Marriott agreed to dialogue;
Labour research reported that in 2001 Woolworths was fined £1200 after
breaching UK child labour laws. Four 16-year-old schoolchildren did not
have work permits and worked until late at night;
Recent labour standards reports have found many UK companies strug-
gling to demonstrate effective management of their supply chain labour
The Russian office of Philip Morris is no longer using teenage girls and boys
to hand out cigarettes and promotional trinkets on the streets of Moscow. The
change comes after the Anti-Monopoly Ministry tightened regulation of alco-
hol and tobacco advertising (Euromarketing via email, 4 May 2001);
The ILO report Labour Practices in the Footwear, Textiles and Clothing
Industries (2000) described the large-scale move to Asia of jobs in these
sectors and also found widespread use of child and female labour at low rates
of pay;
It is claimed that the threat of a boycott by US retailers of manufacturers of
Bangladeshi companies using child labour would result in 50 000 children
being thrown onto the street and a negative impact upon their economy. The
truth is estimated to be that children on $1 a day were replaced by adult
workers on $4 a day instead, resulting in an overall net benefit for the
Bangladesh economy;
In the 1990s NGOs and religious investment groups found that there were
extremely low wages being paid to employees in developing world ˜sweat-
shops™ where the income earned was as low as one three-hundredth of the
retail price of the finished item. The threatened boycotts, negative media cov-
erage and shareholder resolutions led to a general improvement in respect to
the basic wages received; and
An Ecologist report claimed that an estimated 25 000 children, mostly girls,
work an average of 10“13 hours a day for Hindustan Lever.
Part C “ Overview of the Social Aspects of Business Risks

Two companies that demonstrate best practice by adopting a standard in their
industry are Carlson Hotels and Accor Hotels. They have developed a Code of
Conduct for the Protection of Children from Sexual Exploitation in Travel and
Tourism which contains six elements, including: establishing an ethical policy
on CST, training personnel, requiring suppliers to repudiate CST, providing
travellers™ information warning against CST, and reporting annually on code
Specific child labour risk management examples are that organisations
Establish policies that clearly state the organisation™s view and procedures on
child labour;
Not engage in the employment, supporting or recruitment of those defined as
children for the purpose of work;
Not expose children or young workers to hazardous, unsafe, or unhealthy sit-
uations inside or outside of the workplace;
Set up procedures and policies to communicate the message that child work-
ers are not allowed, to employees and other agents, like suppliers and
contractors; and
Provide adequate support to enable such children to attend and remain in
school until no longer a child, thus helping to ensure that there are viable
educational alternatives to employment activity.

Labour practices: forced and compulsory working
Labour practices, including child labour are always headline grabbing, and the
labour standards of suppliers is gaining in importance as a business and reputa-
tional risk issue. The risk is greater in scope than most people think and it is not
only applicable to companies that have employees or subcontractors in Asia.
As part of their sustainable risk management systems an organisation
should have a policy which states their avoidance of forced, compulsory and
child labour (as reviewed below) and the extent to which ILO Convention No.
29, Article 2 and ILO Convention 138 are applied. There are also numerous
issues with regards to excessive compulsory overtime, and employees being
made to work unpaid overtime. Some examples of best practice include:
That organisation should not engage in or support the use of forced labour and
have policies to this effect. There should also be no withholding of identity
papers by the employer. High risk countries are thought to be China and India;
The Gap (US) report has won accolades for its honest and transparent report-
ing. It details exact code violations. For example, between 10% and 25% of
its factories in China, Taiwan and Saipan use psychological coercion or ver-
bal abuse. More than 50% of the factories visited in sub-Saharan Africa run
machinery without proper safety devices. In response to these issues it
revoked contracts with 136 factories in 2004 because of persistent or severe
violations. In two instances, it cut off factories when it discovered a problem
with an under-age worker (Wall Street Journal, 1 May 2004, p. A1);
Chapter 15 “ Human rights outside the workplace 363

UK retailer Marks & Spencer was rated the highest score of 84%, in an Insight
Investment research report, for what can be achieved in their management
and reporting of labour standards in supply chains;
US media giant Walt Disney has said it will investigate claims that staff at fac-
tories in China making books for the firm are working in unsafe conditions.
New York-based campaign group the National Labour Committee (NLC) said
factory staff in China™s Shenzhen province worked up to 13-hour days for less
than the minimum wage; and
Apple Computer said a report of labour conditions at its iPod plant in China


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