The business of human rights

“It is time for large global companies to acknowledge the centrality of investing in long-term sustainable business models.”

That was the blunt message from Professor Michael Posner as he delivered the Australian Human Rights Centre Annual Lecture at UNSW and declared that it was time for action rather than more debate on whether businesses should have a role in protecting human rights.

“These investments will not be cost free but over time companies that make these human rights and environmental investments will succeed in attracting the best people to work for their companies, increasing efficiency, reducing worker turnover, and mitigating risks to their brand reputation,” Posner said in his address 'Making progress: human rights as an essential element of sustainable business'.

He outlined numerous examples of the human rights challenges facing global companies today: Australian mining companies operating in environments so unstable that 380 people have died in and around operations in Africa since 2004; millions of migrant labourers working in life-threatening heat on hazardous construction sites in the Persian Gulf; Food and beverage companies whose products come from child labour in cocoa production in West Africa; human trafficking in the Thai fishing sector.  

“Companies need to acknowledge the centrality of supply chains and that their responsibility extends up and down those chains not only for the quality of the product sold but for the working conditions of the people who are manufacturing, mining, farming or fishing for their product. It is a smart business strategy to take this broader and longer-term perspective,” he said.

Posner has been at the forefront of the international human rights movement for more than 30 years, helping to set up the Witness not-for-profit organisation that trains and supports people to use video to expose human rights abuses, leading the human rights advocacy organisation Human Rights First and serving in the Obama Administration as Assistant Secretary of State for Democracy, Human Rights and Labour at the US State Department. He is now co-director of the New York University Centre for Business and Human Rights, the first-ever centre on business and human rights at a business school.

Posner acknowledged that some companies are tackling the challenges of adhering to human rights standards in their core business operations, but said there was still much work to be done.

The collapse of a factory complex in Bangladesh in 2013, killing more than 1100 garment workers, brought workers’ rights and supply chain issues to world attention and prompted the establishment of industry-led initiatives to inspect 1900 factories.

But that was only the beginning of the story, Posner said. Last December two of his colleagues wrote a report documenting 7100 garment factories in Bangladesh producing clothing for export.

“Most are subcontracting factories, operating on the tightest margins, and with the least outside attention or support … most global brands say they prohibit subcontracting, despite clear evidence that this is central to their ability to produce large quantities of cheap products expeditiously,” he said. “And despite the thousands of factory inspections, after three years only a small handful of factories have been fixed.

“In Bangladesh and elsewhere we need to discuss which of these costs should be borne by global brands and if not by them, who will foot these bills? Who’s going to pay to make factories safe?”

Posner noted that global companies had actually helped drive economic progress, lifting billions of people out of extreme poverty by creating new jobs. But despite this “remarkable progress”, there was “intense and growing opposition to the global trading system that is increasingly viewed to be unfair”, he said.

Posner saw three overlapping forces behind this revolt: the staggering wealth and power wielded by the world’s richest people; weak national governance that had left the poorest people most vulnerable to environmental and labour harms; and global companies not taking stock of their end-to-end supply chains or to make sustainable human rights practices central business priorities.

As well as making human rights a central part of their business models, global companies needed to develop industry-wide standards and performance metrics to motivate collective action, he said.

“We need to move beyond the era of pilot projects, where individual companies are each determining and reporting on their own version of ‘due diligence’ in the human rights realm. Corporate lawyers here and elsewhere should be urging their clients to adopt this more forward-looking model.”

Governments in industrial states also needed to ramp up their efforts to apply appropriate reporting and regulatory muscle to encourage these efforts. “Early efforts to apply a more ambitious model to labour are beginning to emerge as some governments are restricting the import of goods that are the product of forced or child labour,” he said. “In places like the US and Australia, government purchasing practices are the logical place to start implementing these controls.”

When addressing chronic problems like labour violations in Thai fishing or Bangladesh factory safety, it was imperative to work collectively to develop and adopt cost sharing plans among industry, governments, international financial institutions and philanthropy, he said.

“It is neither reasonable nor right to assume that global brands can or should foot the bill for everything that needs to be fixed. But they do bear some responsibility commensurate with the benefits they derive. The shared responsibility model, which we developed with the World Economic Forum, allows a more open discussion of the real risks and costs, and a fair allocation of financial responsibility across the private sector, governments, international institutions like the World Bank and private philanthropy,” he said.

The AHRCentre  is an inter-disciplinary research and teaching institute based in UNSW Law. It aims to promote public awareness and academic scholarship about domestic and international human rights standards, laws and procedures through research projects, education programs, publications, seminars and public events. The AHRCentre Annual Lecture is sponsored by Maurice Blackman Lawyers.