Human rights and corporate social responsibility

The definition given to Corporate Social Responsibility (CSR) by Business for Social Responsibility is that it usually refers to business decision-making which is linked to ethical values, compliance with legal requirements and respect for people, communities and the environment.

It is therefore defined as "operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business".

This does not involve a mere collection of sporadic practices and decisions, but rather, it involves a comprehensive set of policies and practices that are integrated throughout business operations and decision-making processes.

In other words, CSR requires the integration of ethical values into the tradition business model; it envisages the recognition of an obligation beyond shareholder value.

CSR renders the corporation responsible as a global citizen, a concept going beyond mere compliance and approximating the notion of good governance.

The link between good governance and economic growth is increasingly being proved the world over. To this end, corporations are encouraged to act responsibly - both ethically and socially - so that their practices will increase the quality and extent of social and economic issues, thereby supporting international human rights, labour and environmental standards. In this way, this policy leads to an increase in job growth and employability, a sustainable economy and a more just society.

CSR offers benefits to business in the form of a positive impact on economic performance. Among the various benefits, one may mention the avoidance of scrutiny by consumers and other stakeholders; the protection of brand equity; improved financial performance; reduced operating costs; enhanced brand image and reputation; increased sales and customer loyalty; increased productivity and quality; increased ability to attract and retain employees; reduced regulatory scrutiny and added access to capital.

Among the factors instigating the growth of CSR is increased consumer interest in the way a business in conducted, so much so that this plays an important part in their purchasing decisions.

Perhaps even more determining is the changing expectation of stakeholders regarding businesses. Society at large looks to corporations to solve contemporary social and economic issues.

This is due, in part at least, to the increasingly diminishing role of governments in international business, due to the expansive growth of globalisation of commerce.

Further issues include the so-called 'supply chain responsibility' (which renders companies responsible for other companies as well, namely, their suppliers and their customers); growing investor pressure; more competitive labour markets and demands for increased disclosure.

CSR is rapidly growing to encompass new topics such as how boards of directors are chosen and compensated; religious freedom in the workplace; cyber-ethics; consumer concern over the use of genetically modified organisms in agriculture and new demands caused through increased concern over environmental sustainability.

Various guidelines exist as to what issues should be considered under the notion of CSR, among which one finds the Global Reporting Initiative and the Global Sullivan Principles.

However, ultimately, as various case-studies demonstrate, the method of implementation resides with the size and type of corporation concerned.

CSR and human rights

"If human rights are respected and basic education, housing and health care are secure, if there is freedom from personal violence and freedom for men and women to earn their living and raise their families, not only are human rights violations prevented, but conflict, terrorism and war can also be prevented", says Mary Robinson, UN High Commissioner for Human Rights

Human rights are a focal point in CSR, especially in the way that new approaches should be sought in order to solve persistent and serious global problems.

Ms Robinson has stated that a lack of political will, accountability and resources are mainly responsible for such a situation.

However, a general lack of imagination and reticence to look for new approaches are also to blame. The duty to search for alternative solutions to an endemic problem is embedded in the Universal Declaration of Human Rights and it is a duty imposed on all society.

The Universal Declaration states that "Everyone has duties to the community" i.e. the world community, and not merely the immediately proximate group.

It is here that the multinational corporation comes to the fore. Ms Robinson has emphasised that it has to be shown that globalisation does not only work for the privileged, but also for the powerless.

The multinational enterprise does not need to wait for states to impose these principles through legislation since it is strong enough to implement them on a voluntary basis.

In fact, it is through a merging of the regulatory and voluntary systems that human rights may become an integral part of corporate strategies.

Regulation will enforce compliance with minimum norms whereas voluntary systems are necessary for the provision of incentives which instil the mentality that 'doing the right thing' is also good business sense.

In this regard, various initiatives need to be examined, perhaps most importantly, the UN's Global Compact, launched by the UN Secretary General in July 2000.

This calls on companies to adhere to human rights principles as defined in international instruments and to core labour standards as defined by the International Labour Organisation.

A monitoring mechanism which would ensure adherence to such fundamental principles must complement such an approach. Various arguments have also been forwarded to the effect of having a set of UN-approved guidelines of international standards for corporate practice.

In this lies the clear advantage of a universally applied set of standards setting the level of authority which would therefore simplify implementation, as opposed to the various existing codes containing different directives.

While this may be nearly impossible to achieve in the shorterm, Ms Robinson sees this as the new challenge and it is her belief that international standards will become increasingly relevant in this particular context.

She states that "the challenge is not to develop a new swathe of regulations, rather, the task is to make the human rights norms proclaimed more than 50 years ago relevant, influential and, most importantly, effective and enforceable in today's globalised world".

Again, various benefits exist in the development and adoption of policies which ensure compliance with and respect for human rights. Among these, one may mention the protection of brand image, the avoidance of trade sanctions, the increase of worker productivity and retention and the appeasement of consumer concerns.

Some years ago, only a handful of companies addressed human rights issues; today, hundreds of them have drafted codes of conduct and policies integrating human rights principles into their day-to-day business management.

This development mirrors the progression that has occurred from the stage where human rights principles were intended to control state action vis-à-vis the individual to the stage where it has been recognised that many human rights relate, in some way, to the private sector.

This link between businesses and human rights has significantly increased in recent years.

Various areas of analysis

The role of globalisation in this development, due to the fact that the traditional guarantor of human rights - the state - may appear to become ousted by the private sector.

The role of various stakeholder groups, such as human rights organisations, labour organisations, religious organisations, corporate accountability organisations, shareholder groups, student groups, environmental organisations and local organisations and consumers.

Business initiatives - international organisation efforts, especially the UN Global Compact principles, external Standards such as the Universal Declaration of Human Rights, UN Covenants, ILO Conventions, the ILO Tripartite Convention on Multinational Enterprises, Global Compact, Amnesty International Guidelines for Companies and Principles for Global Corporate Responsibility.

Issues to be addressed at this week's conference will include: What is CSR and how is it implemented? How can products and services contribute to a wider enjoyment of human rights?

Privatising human rights - reassessing the roles of corporations, governments and civil society.

Dialogue with local and international organisations: How businesses and organisations are collaborating and establishing accountability schemes.

The role of various organisations and external factors;

Measuring and reporting on corporate human rights performance - monitoring and verification efforts;

Alternative approaches to improving working conditions;

The importance of educating employees on labour rights;

Addressing the downsides of globalisation;

The changing business environment and emerging business practices - how the corporation steps into the shoes originally conceived to be worn by governments;

From theory to practice - implementation;

Implementation of the global compact principles into business practice;

How can businesses play a role in the development of society?

Dr Mallia is the academic co-ordinator of the conference