Three Questions About Business and Human Rights
I spent the last two days at a workshop on the human rights responsibilities of business, being held at Duke University’s Kenan Institute for Ethics.
It was a wide-ranging discussion, involving representatives from academia, NGOs, and industry. The discussion was focused on the “Guiding Principles on Business and Human Rights,” developed by UN Special Representative John Ruggie. The Guiding Principles are rooted in a “Protect, Respect and Remedy” framework, which says that governments have obligations actively to protect human rights, that businesses have an obligation at least to respect human rights, and that all individuals ought to have access to remedies when their rights have been violated. The hard part, of course, is putting that framework into action, a task that has fallen to a Working Group recently established by the UN, two members of which were at the Duke workshop in an unofficial capacity.
Here are three questions — food for thought, really — related to the implementation of a human rights regime intended to apply to transnational corporations. There’s nothing special about this short list of questions (many more arose over the 2-day discussion here at Duke), but it’s a starting point if you’re new to the topic.
1. How does human rights fit into the range of other issues related to “business doing the right thing”? This is both a conceptual question and a question about the practicalities of implementation, especially for companies already engaged in measuring, tracking, comparing, and training for performance in terms of CSR, sustainability, compliance, good governance, etc. Are there performance metrics typically understood as part of CSR reporting, for example, that could be repurposed as human rights measures?
2. How large does a company have to be in order to have “serious” human rights obligations? Obviously, all companies should respect human rights. But demonstrating respect can be done in a variety of ways. Big companies are increasingly expected to do much more than stay out of trouble: they’re expected to evaluate the risks their operations pose to human rights, and sometimes to report on such evaluations. Big companies — the Coca Colas and Walmarts of the world — have the resources to do this. But companies are enormously variable in size and capacity, from the sole proprietor through the SME all the way up to Walmart, ExxonMobil, and Toyota. Smaller companies may have neither the financial resources nor the know-how to implement rigorous human-rights monitoring and policy-making. Guiding Principle #15 says that “In order to meet their responsibility to respect human rights, business enterprises should have in place policies and processes appropriate to their size and circumstances….” But the word “appropriate” leaves a lot to be figured out.
3. Who will pay for increased monitoring, reporting, and policy-making within particular supply chains? Note that this is only loosely related to the question of who should pay. When a new set of costs are imposed on a value chain, which participant in that value chain foots the bill is an empirical question, but (as economists Tyler Cowen and Alex Tabarrok point out) the answer is likely to be determined in part by the relative (in)elasticity of supply of, and demand for, that particular product or service. Roughly speaking, a powerful retailer is likely to be able to force a less-powerful manufacturer to suck up the costs of making sure there are no downstream human-rights risks. This may bring about unanticipated consequences, including unintended reductions in the well-being of average workers. That’s not to say that such reductions in well-being wouldn’t be justified (after all, we’re trying to protect human rights, here). But it is to say that such risks ought to be considered.
No one questions very seriously the significance of human rights. But rights aren’t the only ethically-important constraint on business behaviour, and that raises problems. By their very nature, rights tend to resist efforts to achieve balance: they tend to be understood as absolutes, lines beyond which we must not step. That gives rights-based arguments a lot of potency. But it also means that businesses face serious challenges in doing the socially-responsible thing, namely balancing the pursuit and protection of human rights with other, arguably equally important moral obligations.
The Business Ethics Blog 
Chris, in your recent post ‘Three questions about business and human rights’, you ask,
‘How large does a company have to be in order to have “serious” human rights obligations?’
I propose that this question can be answered by a simple analogy: a Fiat is different from a Ferrari, but the same fundamental driving skills and the same road rules apply. The owners and managers of smaller organisations should not escape exacting human rights obligations merely because of their size, experience or budget.
Such rights cannot be adjusted to fit the size of the business – every business must honour the basic principles of respect and dignity for all. This does not relate just to past, present and future employees, but also to customers, suppliers, and the wider community within which it operates. These are the key stakeholders of the organisation, who individually and collectively contribute to the success of the business.
I agree that smaller companies often lack financial resources, and in many cases are run by management who lack the high level formal education that is often a benchmark in larger organisations. Most small businesses are highly dependent on the personal relationships between their management and the internal stakeholders (usually limited to employees), and external stakeholders (customers, suppliers, financiers, and the local community). So, what dispensation, if any, can we give smaller businesses in terms of their human rights obligations? In this instance, I will address just one stakeholder group – the staff. Should staff working for smaller companies have fewer rights than those who work for larger ones, solely because of the size of the organisation?
The staff in smaller organisations are likely to be working under less than optimum conditions. The premises are possibly in a less desirable part of town, with less than ideal lighting, heating and ventilation, and furniture and equipment that has seen better days. But the employer still has obligations in terms of their welfare and safety. Management must ensure that all staff receive adequate training, particularly in respect of the use of equipment and machinery, and that they are supervised appropriately. Fire escapes must be kept clear at all times, and every member of the team should fully understand emergency procedures. Any employer, of any size, who fails to take the necessary steps to ensure the physical and mental safety of staff is breaching the most simple of ethical principles – that of respect. Employees have choices, even if one of those choices is to not work. While this is perhaps an impossible option in third world and developing countries, there are many parts of the world in which it is possible to receive a basic income from government welfare. For this reason, each employer owes his or her staff a minimum duty of respect.
Beyond respect, employers also have a responsibility to reward all staff equitably. Many countries have minimum wage provisions, and notwithstanding the legal obligation, the employer has an ethical obligation to provide what amounts to a fair wage for a fair day’s work. To do otherwise is simply exploitation.
Employers who exhibit the virtues of courage, honesty and generosity and treat their entire workforce with dignity and respect are best placed to be rewarded by staff who exhibit the traits of diligence, perseverance and loyalty. I am not sufficiently naïve to believe that this will necessarily be the case, but having worked for several years in the recruitment industry, I have listened to many candidates for positions, involving businesses large and small, express just such sentiments.
Staff are also entitled to receive relevant and accurate information relating to their work. This involves not only fair and appropriate performance appraisal, but notification of opportunities for internal advancement, training initiatives, and so on. When a vacancy arises, incumbent staff should be granted the same opportunity and due process as external candidates. They should also be notified of significant changes within the organisation, such as a pending closure, merger or acquisition by another organisation. This is consistent with the Kantian philosophy that everyone has the right to act on the basis of fully informed consent.
Larger companies with more substantial budgets are better placed to have specialist human resource and welfare staff, training officers and so on. The senior management are likely to be protected by the hierarchical structure of lower and middle managers and secretaries from hearing complaints about unfair treatment, bullying and safety breaches. The managers of smaller enterprises must usually deal with such matters on a hands-on basis. And that, in many ways, gives the smaller business a distinct advantage in meeting their human rights obligations. They can step in immediately to quell an argument, correct or, if necessary, discipline a wayward employee.
In the final analysis, irrespective of size, all business owners, managers and employers have a serious and significant obligation to protect and preserve the welfare of their staff. This goes beyond that which is legislated, to the core of human rights. In this situation, I refer to the rights of personal freedom, equality, privacy, and free speech. Those who are unwilling or unable to meet those requirements should never aspire to any position greater than that of a staff member.
Yvonne:
Thanks for your thoughtful comment. Just a couple of points from me, for now.
1. I believe it’s important to note that not all things that it is ethically good for businesses to do fall easily under the heading of Human Rights. While you may be right that “notification of opportunities for internal advancement” is ethically good, and maybe even obligatory, I doubt anyone could really argue that that’s a human right.
2. I should also clarify what I meant by “serious” obligations. By “serious obligations” I meant ones that are substantial, and require action. The distinction becomes useful, I think, when we think about obligations up and down a supply chain. An retailer has very “serious” obligations to her own employees, but less serious obligations to, for example, her suppliers’ employees — mostly because she has less access to information, and less control, over how a supplier’s employees are treated. Certainly we all have obligations not to *cause* human rights violations, but lesser obligations to dig and dig to find information that would help us avoid, say, tangential contributions to such violations.
Chris.
Thanks for your helpful comments. In regard to #2, that issue seems simlar to what in law we know as ‘remoteness of damage’.