With increased incidence of human & environmental rights violation, by outsourced activities either directly or through their suppliers, the value chain management of manufacturing companies particularly transnational enterprises has come under a scanner. Global reach of multinational enterprises creates global impacts and visibility of their activities to a larger audience. Increased visibility led to greater protests worldwide in case of violations. To shield from the continued criticism, companies increasingly adopt the United Nations’ Global Compact principles. Over 5000 companies across 130 companies are signatory to the principles. The principles encompass the important domains of Human Rights, Labour, Environment and anti-corruption. Inspired from the Universal Declaration of Human Rights, ILO’s Declaration of Fundamental Principles and Rights at Work, Rio Declaration on Environment and Development and the United Nations Convention against Corruption ; these principles are voluntary in nature and very importantly cover the important ills that plague the supply chain relationships.
Notwithstanding the wide adoption of these principles, unabated violations continue. Electronics industry is highly criticized for its laxity in supply chain audits and thereby, obliquely permitting these violations. From Microsoft to Apple, Dell to Hewlett Packard the problem subsists. Increased public scrutiny of Apple due to its media trial and its subsequent tightening of supply chain regulations is anticipated to bring a positive ripple affect across the industry. These are impacts driven by media campaigns and consumer awareness. There is also a need for a more stringent legal backdrop to ensure innovation-loving consumers do not unwittingly find themselves hold another Nike shoe or Apple i-pad with a pang of remorse.
The United Nations Human Rights Council in 2008 adopted the United Nations Protect, Respect, Remedy Framework wherein it categorically laid down that the business everywhere has the responsibility of protecting human rights. But such an occasional communication from the global organizations, without any corresponding acceptance of the same in legal jurisdiction is meaningless. The guiding light notwithstanding its toothlessness, is laudatory, considering the beacon of light it provides to companies that aspire for sustainability. The responsibility to respect is believed to a baseline activity. Companies should therefore, take responsibility for activities that visibly have a direct impact such as the production process; product or services that the company provides; labour and employment practices; provision of security for personnel and assets and company’s lobbying and other political activities. To ensure this the company must conduct a due diligence of its activities. The report further stipulates a Human Rights management framework which shall consist of four elements: First, a statement of policy. This statement can be integrated into the company charter or it can be a stand-alone policy. Second, it should have a framework for assessing the impact of its activities on human rights. Third, the human rights policies should be integrated with the companies objectives and integrated into the companies policies and Finally, there should be a tracking system to observe if policies have been implemented successfully and reporting of the same to ensure accountability in operations. The 2008 framework with these four steps, provides a broad outline skeleton for a human rights management framework.
Like the United Nations Global Compact laws, other significant international standards for corporate responsibility on human rights are the OECD Guidelines for MNEs(2000), the ILO Tripartite Declaration of Principles concerning MNE & Social Policy(2000) and the IFC Performance Standards on Social & Environmental Sustainability(2006). However, all of these, like the Global Compact itself are good and provide a framework for corporate responsibility but none of them is legally binding.
From a somewhat cynical perspective, councils meet and announce a guiding principle; but without a strict enforcement mechanism there is nothing forcing the company from violating or ignoring a violation of the same. In other words, such resolutions are at best toothless tigers. It may be interesting to note that the Universal Declaration of Human Rights were codified into International Law through two 1966 treaties that is the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights and are collectively referred to as the Bill of Rights. With more Corporate flutter globally, it may likewise be relevant to consider codification of a global accepted level of responsibility for Multinationals such as the UN Global Compact Principles, into International Law. The point is even though these principles derive form International Law, they are themselves not International Law and the time such as present is an important moment to give them the same level of explicit recognition.
Notwithstanding the wide adoption of these principles, unabated violations continue. Electronics industry is highly criticized for its laxity in supply chain audits and thereby, obliquely permitting these violations. From Microsoft to Apple, Dell to Hewlett Packard the problem subsists. Increased public scrutiny of Apple due to its media trial and its subsequent tightening of supply chain regulations is anticipated to bring a positive ripple affect across the industry. These are impacts driven by media campaigns and consumer awareness. There is also a need for a more stringent legal backdrop to ensure innovation-loving consumers do not unwittingly find themselves hold another Nike shoe or Apple i-pad with a pang of remorse.
The United Nations Human Rights Council in 2008 adopted the United Nations Protect, Respect, Remedy Framework wherein it categorically laid down that the business everywhere has the responsibility of protecting human rights. But such an occasional communication from the global organizations, without any corresponding acceptance of the same in legal jurisdiction is meaningless. The guiding light notwithstanding its toothlessness, is laudatory, considering the beacon of light it provides to companies that aspire for sustainability. The responsibility to respect is believed to a baseline activity. Companies should therefore, take responsibility for activities that visibly have a direct impact such as the production process; product or services that the company provides; labour and employment practices; provision of security for personnel and assets and company’s lobbying and other political activities. To ensure this the company must conduct a due diligence of its activities. The report further stipulates a Human Rights management framework which shall consist of four elements: First, a statement of policy. This statement can be integrated into the company charter or it can be a stand-alone policy. Second, it should have a framework for assessing the impact of its activities on human rights. Third, the human rights policies should be integrated with the companies objectives and integrated into the companies policies and Finally, there should be a tracking system to observe if policies have been implemented successfully and reporting of the same to ensure accountability in operations. The 2008 framework with these four steps, provides a broad outline skeleton for a human rights management framework.
Like the United Nations Global Compact laws, other significant international standards for corporate responsibility on human rights are the OECD Guidelines for MNEs(2000), the ILO Tripartite Declaration of Principles concerning MNE & Social Policy(2000) and the IFC Performance Standards on Social & Environmental Sustainability(2006). However, all of these, like the Global Compact itself are good and provide a framework for corporate responsibility but none of them is legally binding.
From a somewhat cynical perspective, councils meet and announce a guiding principle; but without a strict enforcement mechanism there is nothing forcing the company from violating or ignoring a violation of the same. In other words, such resolutions are at best toothless tigers. It may be interesting to note that the Universal Declaration of Human Rights were codified into International Law through two 1966 treaties that is the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights and are collectively referred to as the Bill of Rights. With more Corporate flutter globally, it may likewise be relevant to consider codification of a global accepted level of responsibility for Multinationals such as the UN Global Compact Principles, into International Law. The point is even though these principles derive form International Law, they are themselves not International Law and the time such as present is an important moment to give them the same level of explicit recognition.
