(Artículo en inglés y español)

Human rights defenders can play a crucial role in assisting businesses to navigate the growing body of business human rights obligations and to implement procedures to manage and address the human rights risks associated with their operations and activities, write leading lawyers and business advisers from Allens.

By Rachel Nicolson, Dora Banyasz and Anna McMahon of Allens

(Artículo en inglés y español)

In the build up to the third UN Forum on Business and Human Rights, ISHR will publish a series of articles by key human rights defenders and experts in this field, before launching a special edition of its Human Rights Monitor on 1 December, in both English and Spanish. Click here to join our Spanish language mailing list.

Momentum for corporate action in the human rights sphere has built rapidly in recent years and the relationship between business and human rights is now governed by a range of instruments, laws, guidelines and standards.

Human rights defenders can play a crucial role in assisting businesses to navigate the growing body of business human rights obligations and to implement procedures to manage and address the human rights risks associated with their operations and activities.

The global standard of conduct for states and corporations in relation to business and human rights is established by the United Nations 'Protect, Respect and Remedy' Framework (the Framework) and the related UN Guiding Principles on Business and Human Rights (the UN Guiding Principles). Whilst the Framework and the UN Guiding Principles do not create binding legal obligations, they have been endorsed by the United Nations, and are regarded as the authoritative global standard for preventing and addressing adverse human rights impacts linked to business activity.

The human rights that business is required to respect are the internationally recognised human rights, understood at a minimum as those expressed in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work. As a matter of best practice this also includes other key international human rights instruments such as the Universal Declaration of Human Rights and the United Nations Declaration on the Rights of Indigenous Peoples, and other voluntary initiatives and guidelines including the IFC Performance Standards on Environmental and Social Sustainability, the Equator Principles, the Voluntary Principles on Security and Human Rights and the UN Global Compact.

Business engaging constructively with human rights defenders makes good business sense. It demonstrates that a business is committed to respecting and supporting human rights as required by the Framework and the UN Guiding Principles. It gives business a strong foundation to manage the legal and non-legal consequences that can arise from human rights abuse engaged in directly or indirectly by business. This engagement is also a recognised component of the corporate responsibility to respect human rights. There is an expectation that business engage with affected stakeholders in identifying and assessing actual and potential human rights impacts and risks, in tracking and reporting on company efforts to prevent and manage those impacts, and in designing effective grievance mechanisms and remediation processes. Set out below are a number of ways in which business can engage constructively with human rights defenders, in line with these standards.

Business leaders can engage with human rights defenders to assist them to integrate human rights considerations into business decision making, including by implementing broader human rights risk management procedures. For example, Rio Tinto worked with the Danish Institute for Human Rights (DIHR) to conduct a desktop human rights risk assessment for operating in the Democratic Republic of Congo, where the company had no previous presence. Recommendations from the DIHR report were integrated into management plans that included proactive mitigation strategies. Addressing human rights risks from the outset of a project will go some way to preventing human rights abuse by business in the first place, and human rights defenders will often be well placed to facilitate the building of trust and confidence among local stakeholders in this regard. This type of partnership can reduce cost and operational burdens by minimising the risk of community conflict, which can result in interruptions to production, higher security costs, staff time lost to crisis management and litigation. It is for these reasons that financial markets are increasingly rewarding companies that are proactively and effectively managing human rights risks and other dimensions of social, environmental and governance risk. Such companies may be considered better able to adapt to change, and evidence that management is aware of and taking steps to mitigate risks is an indicator of management quality.

Understanding the business risks of human rights abuses and acting to eliminate or minimise them before they occur is an important aspect of reputation and brand protection. It is increasingly viewed by key stakeholders – customers, employees, suppliers, distributors, investors, government agencies and local communities – as the mark of a forward-thinking and well-managed business. In recognition of this, as a way to mitigate reputational risks associated with human rights abuse, a number of companies are engaging with human rights defenders by participating in multi-stakeholder initiatives with governments, other companies and civil society. Working with governments and human rights defenders in these types of initiatives can reduce political instability caused by opaque governance, which is a clear threat to investments. It can also provide additional legitimacy around a particular business or project. Some examples of these initiatives include the Extractive Industries Transparency Initiative, the Global Network Initiative in the ICT sector, and the Ethical Trading Initiative in the context of workers' rights.

Human rights defenders can also assist business to monitor and evaluate the company’s efforts to manage and address human rights risks and impacts associated with the particular business activity in question on an ongoing basis. This sets a solid foundation for the long-term security and effectiveness of an operation. For example, in August 2007, Anglo American, BHP Billiton and Xstrata, equal owners of the Cerrejon coal mine in Colombia, commissioned an independent ‘social review’ of Cerrejon’s past and current social engagement to provide a credible assessment of the mine’s social impact and outstanding concerns. The review was conducted independently of Cerrejon management by a panel of four  internationally recognised experts in consultation with local communities and human rights NGOs.

Finally, given that human rights defenders will often have extensive experience in dealing with the impacts of business on human rights, they are well placed to assist business in the design and implementation of company grievance mechanisms.  Grievance mechanisms play a key role in facilitating the effective management of human rights related risks.  For example, in 2005 Exxon Mobil formed a multiparty commission to establish eligibility for land compensation and address concerns and grievances relating to the company’s acquisition of land for its Chad-Cameroon pipeline project. The commission was comprised of government officials, village chiefs, traditional authorities, Exxon Mobil representatives and two NGOs. It was formed at an early stage in anticipation of potentially conflicting claims of land ownership due to a complex land-use system in Cameroon which allowed multiple individuals to have claims on the same use of land.  To promote transparency, the final compensation payments took place at public hearings in the affected villages, with one of the NGOs serving the role of witness to the process.

Whilst businesses are expected to engage with affected stakeholders, including human rights defenders, as part of the responsibility to respect human rights, there is also a strong business case to do so.  Sustainable business benefits flow from engaging with human rights defenders, and most companies will increase their knowledge of the operating environment, as well as their ability to identify, manage and prevent potential human rights risks, by doing so.

Rachel Nicolson is a Partner, Dora Banyasz a Senior Associate, and Anna McMahon an Associate with Allens, a leading international law firm