OPPORTUNITIES AND CHALLENGES OF SOFT LAW CSR IMPLEMENTATION: PERSPECTIVES FROM THE EXTRACTIVES SECTOR AND FENCE LINE COMMUNITIES

Transcription

1 OPPORTUNITIES AND CHALLENGES OF SOFT LAW CSR IMPLEMENTATION: PERSPECTIVES FROM THE EXTRACTIVES SECTOR AND FENCE LINE COMMUNITIES 22 MAY 2015 Rajiv Maher

2 AGENDA: DIHR S WORK AND THE UN GUIDING PRINCIPLES ON BUSINESS AND HUMAN RIGHTS BUSINESS CASE CRITICAL PERSPECTIVES

3 National Human Rights Institution Est by act of Danish Parliament 100+ staff Work with business, government, and civil society in 30+ countries Human Rights and Business since DIHR

4 2015 DIHR

5 CORPORATE ENGAGEMENT PRINCIPLES 1. DIHR is a National Human Rights Institution with the sole objective of protecting and promoting human rights. 2. Corporate actors engage with DIHR in good faith with the aim of improving their impact on human rights. 3. DIHR strives to carry out its corporate engagement projects using a human rights based approach. 4. DIHR will continuously evaluate the results of its work with corporate actors, and may discontinue concrete corporate engagements if the results achieved over time are not satisfactory. 5. DIHR is an impartial, independent human rights institution, and does not offer public endorsements of specific corporate actors. Public communications by a corporate actor regarding its work with DIHR should be agreed prior to disclosure. The communication must be factually correct and must not indicate endorsement by DIHR. 6. DIHR will in all cases disclose the identities of the corporate actors with whom it engages. DIHR actively encourages disclosure by corporate actors of the outcomes of their work with DIHR. 7. DIHR strives to publicly disseminate knowledge based on experiences gained in corporate engagement projects in order to advance human rights in the wider corporate sector.

6 HOW OLD IS THE IDEA OF CSR AND SUSTAINABLE BUSINESS? Being good to workers since Victorian times in the UK. 19 th Century UK, Holland, US examples of companies taking care of workers lives, families, health. Even traced back to ancient Greece and India Usury seen as sinful by Islam.

7 What are human rights? Human rights are universal legal guarantees protecting individuals and groups against actions which interfere with fundamental freedoms and human dignity Office of the High Commissioner for Human Rights 2014 DIHR

8 GLOBALIZATION AS DRIVER FOR HUMAN RIGHTS Danish Institute for Human Rights

9 THE COSTS OF CONFLICT A major, world-class mining project with capital expenditure of between US$3-5 billion will suffer costs of roughly US$20 million per week of delayed production in Net Present Value (NPV) terms, largely due to lost sales. In one Latin American mine, a nine-month delay during construction in 2010 resulted in US$750 million in additional project costs. Community conflict in one country led to stoppages and down days that cost another project US$100 million per year. In another case, community conflict that shut down a few key power lines caused an entire operation to halt at a cost of US$750,000 per day. 7 Day Blockade at energy project s pipeline in middle Eastern country, which interrupted operations, cost US$20,000 per day. Davis, Rachel and Daniel M. Franks Costs of Company-Community Conflict in the Extractive Sector. Corporate Social Responsibility Initiative Report No. 66. Cambridge, MA: Harvard Kennedy School

10 Business & Human Rights: Background : UN Framework : Guiding Principles : UN WG / Implementation UN Protect, Respect and Remedy Framework and Guiding Principles 1. State duty to protect against human rights abuses by third parties, including business, through appropriate policies, regulation, and adjudication 2. Corporate responsibility to respect human rights, which means to act with due diligence to avoid infringing on the rights of others 3. Access by victims to effective remedies, judicial and non-judicial

11 SOCIAL INVESTMENT PROJECTS Nice to have Social investment and community development projects Must have Corporate responsibility to respect and human rights due diligence Business enterprises may undertake other commitments or activities to support and promote human rights, which may contribute to the enjoyment of rights. But this does not offset a failure to respect human rights throughout their operations. - Guiding Principle 11 commentary.

12 Human rights due diligence: Procedure The steps a company takes to identify, prevent, mitigate and address the adverse human rights impacts of its activities and relationships. Policy Commitment II. Corporate responsibility to respect human rights Assess Impacts Communicate and Report Integrate and Act on Findings Identify and Remedy Grievances Track and Monitor 2014 DIHR

13 KEY MESSAGES FOR BUSINESS 1. Know your operations and their impacts 2. Act early 3. Ensure common understanding/expectations 4. Engage openly with interested stakeholder (including in rights-holders)

14 HUMAN RIGHTS REPORTING AND ASSURANCE FRAMEWORKS INITIATIVE Early adopters: Unilever, Ericsson, H&M, Nestlé and Newmont.

15 OUR WORK WITH SHELL REPORT/2012/OURAPPROACH/LIVINGBYOURPRINCIPLES/HUMANRIGHTS.HTML

16 NESTLE HUMAN RIGHT IMPACT ASSESSMENT (HRIA)

17 OUTCOMES FROM HRIA - NESTLÉ The findings triggered concrete actions implemented by Nestlé at country operations and corporate levels: Human resources: living wage Health & safety: road safety Security arrangements: human rights training Business integrity: anti-corruption Community impacts: grievance mechanism Procurement Sourcing of raw materials Products quality and marketing practices Daunting challenge

18 LESSONS LEARNT #1: Setting priorities: theory and practice should be said according to risk to rights holders (evolving methodology still). #2: HRIAs are not audits - more complex and comprehensive than audits due to the nature of human rights which cut across a number of different issues and functions. #3: The evolvement of the HRIA process and methodology developed scenarios with Open questions around policies and practices. #4: HRIAs are valuable but resource intensive

19 LESSONS LEARNT II #5: The challenge around local community consultations - Access to vulnerable peoples in a culturally sensitive way, language, deep understanding of Local context. #6: Dilemmas around external stakeholder engagement In country operations with public governance, HRIAs - negatively perceived by authorities. May feel they are being assessed on human rights policies practices of the country. #7: Compliance vs. continuous improvement helped Nestlé uncover more areas for improvement. #8: HRIAs are important drivers to develop employees capacities and increase awareness over 30,000 taken online training.

20 HUMAN RIGHTS AND BUSINESS TREATY DEBATE Small group lead by Ecuador calling for Treaty EU and US pushing through National Action Plans on B&HR. Counter the calls for a Treaty Danish CSR Council called for Government to enact legislation with Extraterritorial Reach US Government also discussing inclusion of Extraterritoriality in Access to Remedy

21 HUMAN RIGHTS AND BUSINESS TREATY DEBATE Chances of an international binding treaty on business & human rights is low. Policy on Responsible Lobby However, expect some concessions on extraterritoriality to be passed by certain EU governments and even the US.

22 CSR GUIDELINES FOR CHINESE MINING COMPANIES OPERATING ABROAD Chinese chamber of commerce for minerals, metals and chemicals importers and exporters (CCCMC) guidelines preventing: conflict and corruption, labour rights, environmental protection, and community relations. Main focus on supply chain due diligence to avoid conflict minerals. Importance of Home States requiring extractive companies to respect human rights abroad.

23 HUMAN RIGHTS DEFENDERS AND COMMUNITY CONFLICT Top Issue for 2015 IHRB Currently over 1400 community conflicts in the world with extractives and natural resource projects EJOLT, 2015 Lack of community consent and acceptance to certain projects.

24 UNDERLYING THEORY BEHIND CSR/SUSTAINABLE BUSINESS AND BUSINESS AND HUMAN RIGHTS What do they all have in common? Instrumental Utilitarian: Business Case, Win-Win, Shared Value is truly possible when implemented by Business. Within the current neo-liberal paradigm. No need for radical changes to the system.

25 WHAT THE GUIDING PRINCIPLES DO NOT ADDRESS Top Down like all global standards/policies Existing Power structures and asymmetries between State, Business, Workers and Communities Politics, interests, behaviour technical (input = human rights respect) Affected Community Consent for project planning. No reference to ILO169 Some/Many communities do not want any project in the first instance! What good is responsible/respectful security in such an instance? Empowerment of affected Rights Holders (Employees, Communities and others) for decision making Human rights impacts. Emphasize Mitigation not Elimination (links to first point).

26 LIMITS OF VOLUNTARY GLOBAL STANDARDS: SECURITY AND HUMAN RIGHTS

27 LIMITS OF VOLUNTARY GLOBAL STANDARDS: SECURITY AND HUMAN RIGHTS We should also pay attention to the less explicit and more hidden forms of human rights abuses by corporations and the State. For example its possible to have state of the art policies, tools, systems on human rights (security) but still behave irresponsibly and unethically in the eyes of community residents. A possible weakness of the human rights concept? (around manipulation with PR/CSR/Human rights policies; spying; lobbying/influence) All with an aim to get a social license to operate

28 LIMITS OF VOLUNTARY GLOBAL STANDARDS: SECURITY AND HUMAN RIGHTS

29 LIMITS OF VOLUNTARY GLOBAL STANDARDS: SECURITY AND HUMAN RIGHTS

30 WHAT MY PERSONAL ACADEMIC NON- DIHR RESEARCH WITH COMMUNITIES SHOWS Based on communities perceptions and actions (indigenous and non) towards near large mining and hydropower projects in Brazil and Chile. Bottom Up Approach Well intended CSR related policies (engagement, benefits, partnering) aimed at win-win lead to community divisions and in-conflict. Divide and Conquer? Corporate Surveillance of critical voices and workers Some companies keen to publicize friendly community groups as having a social license to operate and compliance of CSR and human rights. Corporate Power One side want the CSR, Human rights and Development the other sees this as incompatible with their worldview. So what is Development and Poverty? Who gets to Decide what it is? Identity strengthening via social movements of indigenous groups in resistance.

31 NOT EVERYBODY WANTS LARGE PROJECTS (EVEN WITH RESPONSIBLE SECURITY) "You've been trying to instruct Indians to be capitalists ever since you got here. But we don't value what you value." (Intercontinental Cry, May 2015) This quote of Onondaga Faithkeeper Oren Lyons, a respected Native American elder, sums up an indigenous worldview in sharp contrast with the modern paradigm of profiting from the Earth.

32 PERU EQUIDAD HOW COMPANIES COMPLY X X XX XX XX

33 VIDEO OF COMMUNITY RESISTANCE

34 CRITICAL QUESTIONS With State-of-the-Art environmental/social and now human rights corporate policies why are there so many counts of Environmental related company community conflicts? Are the UNGPs and VPHRS the Panacea to social environmental justice conflicts? Where are the gaps between how the approaches used by UNGPs and VPHRS and ourselves for human rights and environmental injustice? Why does corporate - community conflict still occur?