Business and human rights, particularly in developing countries are under increasing scrutiny. Allegations of sweatshop factories, dangerous working conditions and child labour have been made against a wide-range of companies, particularly those reliant on foreign supply and value chains. The resulting impact to reputation and sales can be hugely detrimental, reflecting an increased ethical awareness amongst customers and investors who are quick to disassociate themselves from tainted brands. This session aims to provide an overview of the issues you should be aware of. This presentation was conducted on 31 October 2013 by Eversheds' Martin Warren, Partner, and Jane O'Rouke, HR Consultant.

1. Business and human rights
Martin Warren, Practice Group Head, Human Resources & Head of
Labour Relations and Jane O’Rourke, Principal Human Resources
Consultant, Eversheds LLP
31 October 2013

2. Business and human rights
Today’s speakers
Martin Warren
Practice Group Head,
Human Resources &
Head of Labour Relations
Jane O’Rourke
Principal Human
Resources Consultant

3. Business and human rights
Agenda
•
•
•
•
•
•
•
Identifying the risks and why you need to act
An overview of the recognised global human rights standards
Who are the key players?
Recent developments – the Bangladesh Accord
What are the benefits of grasping the nettle?
How to respond in practice
Useful links to existing guidance and resources

4. Headlines from last 2 months
‘Beatings and 17-hour days’: the life of Britain’s
food slaves The Sunday Times
Dhaka victims still wait
for help ITV News
Yet another labour scandal hits
Chinese supplier Foxconn Forbes

5. Business and human rights
An introduction
•
•
•
•
•
Globalisation of
– business and supply chains
– trade unions and NGOs
Global labour practices and conditions, particularly in developing
countries, are under increasing scrutiny
– some developing countries have weak labour laws or a poor history of
enforcement
International human rights standards have developed to ‘fill the gaps’
Standards evolving from ILO (aimed at Governments) to Ruggie UNGPs
(aimed at businesses)
Multi-national employers expected to comply

6. Business and human rights
Identifying the risks
•
•
•
•
•
•
•
•
•
Reputation and brand value
Cost (lost sales, disruption to supply chains, compensation claims, worker
disputes etc)
Legal (litigation, procurement terms etc)
Accusations of complicity with supply chain abuses
Pressure from investors/stakeholders/customers
Accusations of failing to live up to CSR codes
Trade unions use human rights to pursue a wider agenda
Free trade agreements incorporating human rights
Western government pressure (e.g. California law)

7. Business and human rights
Other reasons to take action?
•
•
•
•
•
•
•
Genuine desire to respect labour standards globally
A way to address weak laws in some developing states
Wanting a level playing field - a legitimate global governance structure
Ruggie UNGPs – changing the game
A way to regain some control over contractors & suppliers’ working
practices
Better to take the initiative
The Bangladesh tragedy and the resultant Accord has brought many of
these issues in to sharp focus

8. Business and human rights
An overview of the global human rights
standards

9. Who is responsible in your organisation?
Polling question
Who is responsible and accountable for business and human rights in your
organisation?
A.
B.
C.
D.
E.
F.
G.
Human Resources
Legal
Health and Safety
Corporate Social Responsibility
Internal audit
Labour Relations
All of the above

10. Business and human rights
The answer is...
•
G - All of the above
•
Human rights issues are relevant to many Corporate support functions
•
Establishing who should take ownership of this topic is a challenge for
many global organisations

11. Business and human rights
What are the global human rights standards?
•
•
•
•
International Labour Organisation (ILO) Conventions
UN Guiding Principles (Ruggie UNGPs)
UN Global Compact
OECD Guidelines

12. Global human rights standards
International Labour Organisation (ILO)
•
•
•
•
The ILO mission is “to promote rights at work and enhance social
protection” across 185 member states
– over 90% of the world’s states = ILO members
How? By creating international labour standards, which set minimum
levels of social protection, backed by education, supervision, research etc
to promote them
What are international labour standards?
– covering all work matters, with a focus on freedom of association, a
right to collective bargaining, the elimination of discrimination and
forced/child labour
– aimed primarily at governments, not companies
Contained in ‘conventions’ - legally binding international treaties that
member states must apply in their countries

13. Global human rights standards
International Labour Organisation (ILO)
•
•
•
A supervision & complaints procedure (but no hard sanctions)
How do the standards apply to global employers?
– direct - where national laws apply ILO standards (& are enforced)
– indirect - for example…
• ILO complaints ‘name and shame’ employers
• IFAs incorporate ILO standards
• CSR codes incorporate ILO standards
• TU’s, NGO’s/others mount corporate campaigns to pressurise
employers to adhere to ILO
• Commercial contracts impose adherence to ILO
• EWC agreements includes ILO adherence
What’s the problem if they do bind employers?
– legal uncertainty and conflict with national laws

14. Global human rights standards
The UN “Ruggie” Guiding Principles
•
•
•
•
Background
– states play a key role in raising labour standards
– but, progress slow and patchy
– growing recognition that MNE’s also have global duties and power to
affect international labour standards
Led to
– new UN Guiding Principles on Business & Human Rights developed by
J Ruggie
How does Ruggie ‘fit’ with the ILO standards?
– ILO sets out what standards should be respected & Ruggie sets out
how companies should act to fulfil their responsibilities
Companies to ‘know and show’ Ruggie compliance

15. Global human rights standards
The UN “Ruggie” guiding principles – an
extract
•
•
“Business enterprises should have in place policies and processes…
including
– a policy commitment to meet their responsibility to respect human
rights
– a human rights due-diligence process to identify, prevent, mitigate
and account for how they address their impacts on human rights
– processes to enable the remediation of any adverse human rights
impacts they cause or to which they contribute”
A human rights due diligence should include “assessing actual and
potential human rights impacts, integrating and acting upon the findings,
tracking responses, and communicating how impacts are addressed”.

16. Global human rights standards
The UN “Ruggie” Guiding Principles
•
•
•
•
•
The proactive due diligence (know and show) approach marks a major
change and is more demanding
They are recognised as the authoritative framework against which
business behaviour will be judged going forward
NB Supply chain responsibility – a company should ‘seek to’ prevent or
mitigate adverse human rights impacts ‘directly linked to company
through its business relationships’
Sanctions?
– there is no legal mechanism which allows complaints against a
company to be lodged with the UN
Also, same indirect application as for ILO before (‘naming and shaming’,
corporate campaigns, IFAs, CSR etc)

17. Global human rights standards
The UN Global Compact
•
•
•
•
The largest voluntary CSR type of initiative in the world – partnering with
the UN
Companies sign up to 10 principles in the areas of human rights,
environment & anti-corruption
Why? Companies benefit from access to practical tools and guidance, UN
expertise & sharing best practice to help them embed & apply the
principles
How do Ruggie and Compact fit together? According to the UN, Ruggie
reinforces the Compact, providing an authoritative framework for
implementing the Compact

18. Global human rights standards
The OECD guidelines
•
•
•
•
•
The guidelines are recommendations addressed by governments to MNEs
operating in their countries
They provide a framework for responsible business conduct including
business ethics, human rights (based on Ruggie), responsible supply
chain management and more
Compliance by employers is voluntary, not legally enforceable
But, NGOs and TU’s can and do bring complaints against an employer
under the guidelines
– subject to a non-judicial review procedure
– the outcome of which can be published
As a result, many companies have settled complaints to avoid
reputational damage, sometimes agreeing to enter into an IFA as part of
the settlement

19. Global human rights standards
Standard
Aimed at:
Covers
human
rights
Directly legally
enforceable
Indirectly legally
enforceable
ILO
Convention
Governments
of Member
States
Yes, international
/national laws as
applicable
Various routes
UN Global
Compact
All member
corporations
No
Various routes
UN Guiding
Principles
“Ruggie”
All corporations
& Member States
No
Various routes
OECD
Guidelines
NME’s operating
in OECD
countries
No
Various routes
Establish a
framework
that covers
issues

20. Business and human rights
Other than global institutions like the UN,
who are some of the key global players?

21. The key global players
Global union federations
•
As global organisations with worldwide membership, GUFs are wellplaced to address global human rights
– by transnational campaigns and negotiations
– exchange of information
– cooperation and coordination of positions
– building the competence of local unions in developing countries

22. The key global players
Global employer representatives
•
The International Organisation of Employers (IOE)
– recognised as the voice of business by ILO, UN, G20 and more
– represents the interests of private sector employers in social and
labour matters at international level
– with a membership of 150 business and employer federations in 143
countries

23. The key global players
Others
•
NGOs, charities and other pressure groups, for example
– The Ethical Trading Initiative (“we work in partnership to improve
the lives of poor and vulnerable workers across the globe”)
– The Fair Labour Association (“believes that all goods should be
produced fairly and ethically”)
– The Worker Rights Consortium (“an independent monitoring
organisation that supports workers in defending their workplace
rights”)
– Worldwide Responsible Accredited Production - WRAP (“a notfor-profit organisation dedicated to promoting ethical, humane and
lawful conditions and practices in manufacturing facilities all around
the world”)
– and many more …

24. Business and human rights
Recent developments – The Bangladesh
Accord

25. The Bangladesh Accord
Polling question
Have you read the Bangladesh Accord?
A. Yes
B. No

26. Recent developments
The Bangladesh Accord – legal repercussions
•
•
•
•
•
Industriall and Uni, plus NGOs, pushed global retailers to sign the Accord
post Bangladesh factory deaths
80+ signatories to identify key or high risk suppliers in Bangladesh so
that they can be subject to safety inspections, remediation and fire safety
training
Up to $500,000 annual cost per signatory plus unclear who pays for the
remediation
Legally enforceable binding arbitration clause
– high risk - the size of any award for breach is unclear
This is a significant development - will GUF’s want similar clauses in IFAs?
A way to make Ruggie/ILO commitments legally enforceable by trade
unions?

27. Recent developments
International framework agreements (IFA’s)
•
•
Overview of IFA’s
– what are they? Typical human rights content? Enforcement?
– why do companies enter IFA’s?
Risks
Cost
•
•
•
•
Reputational (if IFA
breached, not renewed)
Legal (soft law
challenged, lack of legal
certainty)
Administration (audits,
reports, meetings)
Implications for
suppliers
Confidentiality
•
Risk of having to
disclose sensitive
information
Labour relations
•
•
•
May evolve into union
negotiation & collective
bargaining
If it contains neutrality
in organising
campaigns, expect
membership drive
Scope for more credible
global strike capacity

28. Business and human rights
The benefits of grasping the nettle?

29. Business and human rights
The benefits of grasping the nettle
• Having clarity at a global level on labour standards will help
inform and improve local practices, gradually raising standards
where they fall below international standards
• Employers must be proactive to avoid nasty surprises
• Obligations are likely to increase – some governments are
seeking to influence labour practices outside their jurisdictions
• Global unions are likely to continue to push for legally binding
commitments in relation to global labour standards
• IFA’s signed under the pressure of a ‘name and shame’ campaign
have been described as ‘documents of surrender’
• Employers who are proactive can ‘know and show’ should they
become a target of such a campaign

30. Business and human rights
How to respond in practice

31. Global labour standards
How are other global corporations
responding?
Our judgment is that most
companies with global
operations/supply chains are
here
•
The ‘Ruggie journey’:
– pre-compliance
– compliance
– beyond compliance
•
But, progress is being made:
– “The number of companies developing human rights policies, due
diligence procedures and grievance mechanisms is rising
significantly.” John Ruggie, February 2013

32. Global labour standards
How are other global corporations responding?
•
•
•
Those companies looking to comply with Ruggie soon realise that the
Principles are an authoritative statement but
– not a comprehensive code, and
– currently lack practical tools and guidance (although the UN Global
Compact does)
Each company is having to interpret what Ruggie means practically for
their operations
Typically, supply chains and other key business relationships in
developing countries present the biggest challenges

33. Global labour standards
Putting respect for human rights into practice
1. Develop
understanding
of your human
rights risk
profile
2. Formulation
of
strategy/policy
commitment
4. Integration
and acting on
potential
impacts
3. Human rights
due diligence –
assessing
impacts
‘Know and show’
Consider
local
grievance
mechanisms
5. Evaluating
effectiveness

34. Business and human rights
How to respond – some key points
•
•
•
•
•
•
•
This is not a one-off - it is an ongoing commitment
Identify whose support is needed - bearing in mind that this is crossfunctional (HR, CSR, H&S etc)
Allocate resources & identify external/internal expertise
Prioritise using your risk profile - trying to do it all at once may prove
overwhelming at the outset
Beware of making a global commitment you are unable to live up to
locally
Train management & promote the exchange of information
Agree your approach to business partners (using education and
encouragement, screening, inspections, commercial leverage, incentives
and potentially ending the relationship)

35. Business and human rights
In summary
•
•
•
•
•
Huge reputational and other risks coupled with increasing pressure to
comply
Beware, some players have wider agendas
Although not directly legally enforceable, ILO human rights standards are
increasingly being incorporated in to legally binding agreements
Many global employers want ‘to do the right thing’ but are overwhelmed by
the challenge of how to put respect for human rights into practice given the
complexity of their operations and supply or value chain
Doing nothing is not an option and help is available

36. Business and human rights
Useful links
•
UNGPs
http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf
•
OECD guidelines
http://www.oecd.org/daf/inv/mne/48004323.pdf
•
UN Global Compact – general summary brochure
http://www.unglobalcompact.org/docs/news_events/8.1/GC_brochure_FINAL.pdf
•
ILO fundamental rights summary document
http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---declaration/documents/publication/wcms_095898.pdf
•
Business and human rights UN portal
http://www.business-humanrights.org/

37. Business and human rights
Any questions

38. Business and human rights
Contact us
Martin Warren
DD: 0845 497 4745
www.eversheds.com/martinwarren
martinwarren@eversheds.com
Jane O’Rourke
DD: 0845 498 7769
janeorourke@eversheds.com