Human rights are a key risk for business, yet many companies fail to prioritise the issue. The World Economic Forum contends that human rights must find a permanent place in the boardroom – but how can companies embed them in the business and make them an integral part of corporate culture? And what does best practice look like? Fiona Zerbst investigates.
South Africa’s landmark ‘Deadly Air’ pollution case against the South African Government has received global attention for good reason. A legal challenge brought against the State – and by extension the coal industry – has been led by two environmental justice groups, groundWork and Vukani Environmental Justice Movement (VEM), which have asserted that coal-related air pollution in Mpumalanga violates the rights of communities in the area to live in a healthy environment.
UN special rapporteur on human rights and the environment, David Boyd, has provided expert evidence in the case, indicating that around 2 239 human deaths a year are directly attributable to coal-related air pollution in the country, not to mention 9 500 cases of bronchitis among children six to 12.1 A 2019 report shows that, by World Health Organization standards, sulfur dioxide and nitrogen dioxide levels in the Highveld’s industrial region are ten times higher than is safe for human health.2 The plaintiffs in the matter argue that government should compel coal mining companies to take steps to reduce air pollution in terms of the 2011 Highveld Priority Area Air Quality Management Plan, which was launched in 2012.
This and similar environmental cases around the world show that the intimate nexus between business, the environment and human health is increasingly coming under scrutiny. Fossil fuel companies and other big polluters will have to accelerate their transition to a net zero carbon economy or face increasing legal action. A recent landmark case in the Netherlands provides cause for optimism – on 26 May 2021, the District Court of The Hague ordered fossil fuels giant Royal Dutch Shell to reduce its carbon emissions by 45% by the end of 2030. This is the first time an oil company is being held liable for contributing to climate change – and this has a direct bearing on human rights.
Since the Universal Declaration of Human Rights by the United Nations in 1948 – a post-war affirmation of the inherent dignity and equality of all people – there has been a move towards ensuring that basic rights are enshrined in many constitutions, treaties, codes and instruments of states and state actors around the world.
“The Shell case represents a tectonic shift in the way we think about the role of companies – and the investors that support them – in the climate emergency,” says Nicole Martens, Director of Martens Impact Advisory and a Trialogue associate. “In essence, the message sent by the ruling against Shell is that not having a clear plan in place for mitigating against the climate emergency is not only bad business or immoral, but fundamentally illegal – it is a clear and significant violation of the human right to life. This case has placed the protection of human rights firmly at the centre of the climate discussion. It is no longer a question of standard of living, but of ability to live. Companies that are doing significant harm in the absence of a strategy for mitigating against or remediating this harm, are guilty of clear human rights abuse.”
According to Martens, the right to life is the most fundamental human right of all. The most severe negative impacts of climate change – like extreme weather events – threaten people’s lives, both directly and indirectly, through an impact on livelihoods (like the economic destruction following a severe flood). “To protect the human right to life, we must protect the underlying natural and socioeconomic systems that support life, and these are being threatened by climate change,”she asserts. “The fact that climate change negatively affects other aspects of human rights, such as inequality and poverty, further emphasises the need to combat the climate emergency as a vehicle for elevating human rights protection.”
In April 2021, three students in the United Kingdom sued the government over the human rights impact of the climate crisis, arguing that their right to life has been breached because of the state’s failure to act decisively. The students, from diaspora backgrounds, have noted the links between the climate crisis and wider social injustice, particularly as air pollution largely affects racially marginalised communities, and the UK exports plastic pollution to poorer countries.
Closer to home, South African climate justice activist Ayakha Melithafa was one of 16 young people filing a landmark complaint to the UN Committee on the Rights of the Child, protesting the lack of government action on the climate crisis. With climate litigation on the rise, there is increasing pressure on governments and big business to take their responsibilities seriously.
The evolution of corporate human rights responsibilities
Since the Universal Declaration of Human Rights by the United Nations in 1948 – a post-war affirmation of the inherent dignity and equality of all people – there has been a move towards ensuring that basic rights are enshrined in many constitutions, treaties, codes and instruments of states and state actors around the world. This is a moving target as the progression or regression of rights depends on various factors, including whether societies view human rights as a fundamental goal, where political power is concentrated, and if societies themselves demand change.
The UN Human Rights Council’s endorsement of the Guiding Principles on Business and Human Rights in 2011, has been a vitally important step towards integrating human rights within the corporate environment.3 The impact a company has on society has everything to do with human rights, which are not only about sweatshops and child labour, but also issues like the right to privacy, the protection of whistle-blowers, and health and safety issues (the way companies manage the Covid-19 pandemic being a good example). The Guiding Principles outline the legal duties of governments to protect citizens against third-party human rights abuses, which include those of businesses. In addition, the African Commission on Human and Peoples’ Rights (ACHPR) has established the Working Group on Extractive Industries, Environment and Human Rights Violations, with the aim of addressing human rights abuses in the extractive industries sector.
However, there are not yet internationally binding principles for holding private actors to account for their impacts, particularly when these violate basic rights. According to Dr Tshepo Madlingozi, Director and Associate Professor of the Centre of Applied Legal Studies at the University of the Witwatersrand, this will change within the next decade or so, as a draft treaty is in process.
“The need for such a treaty has grown, as multinationals have become more powerful than many governments, which makes it difficult for countries to hold them accountable,” he says. “The primary entity responsible for promoting and respecting human rights is the state because they are voted in by the public and we pay taxes that are used to promote our socioeconomic rights. However, the second-biggest actor is private-sector businesses, which should be held to account without infringing on their constitutional right to trade freely.
“Section 8 of South Africa’s Constitution makes it clear that citizens can claim their rights from the state and other juristic persons,” he says, indicating that, in line with the UN Guiding Principles, companies should not just desist from doing harm but should be held accountable for violations – and should actively work towards remedying negative impacts.
Business has an ethical obligation to society
Madlingozi believes a company’s first obligation should be a moral one: “Constitution and legislation aside, a business is a member of society and profits from its engagements with that society, unlike non-profit organisations,”he points out.“ This means that, apart from corporate social investment, a company has a heightened responsibility to respect human rights – and this in turn benefits business, because it creates a stable, harmonious society, where strikes and protests are uncommon. If you look at the history of business in South Africa, much of the economy was built by exploiting the overwhelmingly black labour force. This historical inequity led to poor relations between business and society, but companies can undo some of the damage by looking at what they can voluntarily contribute to society today.”
“Doing what is right should never be on the opposite end of the spectrum to profits,” says Zellah Fuphe, Chief Corporate Governance Officer at Dimension Data Middle East and Africa.4 “Indeed, ethical business conduct is a prerequisite for sustainable profitability. Without ethics, we are doomed to be another cautionary tale. Ethical business conduct does not happen by magic – it can only be birthed through deliberate and strategic planning that drives intentional efforts across the organisation.”
Fuphe urges companies to have a clearly defined purpose that transcends immediate profits and considers a sustainable future, along with company values and a code of business conduct and ethics to guide operations, including stakeholder relations. Strong governance structures are also essential, backed by boards that are not afraid to hold a company accountable for its actions. The World Economic Forum has asserted that human rights need to find a permanent place in the boardroom, though some companies would clearly find this more vexing than desirable.5
How South African companies are faring
In South Africa, the Companies Act calls for compliance with the Bill of Rights, as provided for in the Constitution of South Africa, which means that human rights form part of company law. But the private sector has a poor track record when it comes to human rights. Three South African multinationals were named among the worst-performing companies in the 2020 Corporate Human Rights Benchmark (CHRB), which is part of the World Benchmarking Alliance.6
The CHRB assessed 229 of the largest listed companies in the world using the UN’s Guiding Principles on Business and Human Rights (UNGPs) as a starting point, along with other industry and global standards on responsible business practices and human rights. Distressingly, only a minority of global companies appear willing and committed to taking human rights seriously, and there is a disconnect between commitments and processes on the one hand and actual performance and results on the other. Of the 229 companies assessed, 104 had at least one allegation of serious human rights impact, with 225 allegations reported in total.
In South Africa, companies will be forced to take human rights due diligence more seriously. Madlingozi points out that the Companies Act places direct and personal liability on directors: “In the past, directors could hide behind the corporate veil, but now they cannot hide behind ‘the company’ as an entity. The courts are increasingly likely to rule that companies are made up of human beings – they are not faceless entities,” he says.
It will also become more difficult for directors to point a finger at auditors and compliance officers. However, the challenge is that although we have progressive legislation that can hold company directors to account, implementation is lacking.
Clearly, it is unsustainable to put profit-making above respect for the law and human rights in general. A culture of non-accountability erodes the moral fibre of a company – but companies should be aware of the reputational, financial and legal risks of impunity. “The public is increasingly unwilling to do business with companies that do not respect basic rights,” Madlingozi explains. “It is far better for companies to lead by example – it’s inexpensive and you don’t have to hire lawyers.”
Companies should take this seriously. In South Africa, a proposed amendment to the Promotion of Equality and Prevention of Unfair Discrimination Act will see employers becoming liable for unfair discrimination committed by their employees, unless they have taken “reasonable steps” to ensure that those employees do not discriminate against others when performing their duties.7 The overall aim of the amendment is to provide greater protection to people challenging unfair discrimination, particularly victims of hate crimes. It is therefore in a company’s best interest to educate staff about rights and responsibilities – both formally, through employee education programmes, and informally, by providing a safe space for discussions.
In addition, the investor landscape is increasingly interested in how companies live up to their social responsibilities. The newly released Refinitiv Satrix South Africa Inclusion & Diversity Index, for example, encourages investors to commit capital to companies that actively invest in and promote inclusion and diversity in their businesses. Such benchmarks would provide fresh impetus for companies to make systemic changes within their organisations.8
How can companies embed human rights within the business?
According to the United Nations Global Compact, the field of human rights is one of the most challenging areas of corporate responsibility for companies to address – and they suggest that more human rights tools and guidance are needed.
A good starting point is to be clear about the business case for human rights and seek resources that can assist companies on their journey. Companies should start by ensuring that they are familiar with the South African Constitution, legislation, and regulations affecting the particular sector in which they operate. Beyond that, there are human rights due-diligence tools that allow companies to understand and reflect on their actual and potential impact on society.
Resources for companies
- UNGPs Reporting Framework – comprehensive guidance for companies to report on how they respect human rights: https://www.ungpreporting.org/
- The Ten Principles of the UN Global Compact – derived from the Universal Declaration of Human Rights, the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption – outline fundamental responsibilities for companies in the areas of human rights, labour, environment, and anti-corruption: https://www.unglobalcompact.org/what-is-gc/mission/principles
- Office of the United Nations High Commissioner for Human Rights (OHCHR) and Global Company e-Learning Course on Business and Human Rights – an e-learning course to help businesses understand what human rights mean to them, and how they can support human rights in accordance with the Ten Principles of the UN Global Compact and the UNGPs: https://info.unglobalcompact.org/humanrights
- The Global Compact Network (GCN-SA) and the National Business Initiative (NBI) have introduced a Toolkit for Business and Human Rights in South Africa, which guides companies regarding integration and alignment in implementation: https://www.nbi.org.za/wp-content/uploads/2016/06/Human-Rights-Benchmark-Tool-2-2.pdf
2020 Corporate Human Rights Benchmark (CHRB) – the top global companies
Italian multinational oil and gas company Eni and British multinational consumer goods company Unilever – long-standing members of the World Business Council for Sustainable Development – ranked highest among the 229 companies assessed in the CHRB. Both have made continuous improvements over the years, outpacing other companies and producing comprehensive reports on human rights due diligence.
For the third year in a row, Eni has published a report that takes stock of work it has done during the past five years to strengthen its approach to human rights. The report outlines how it manages human rights issues with regard to its employees, business partners, suppliers, and local communities, as well as how it prevents violations, or sets out to remedy them if they occur.9
Unilever has created a new human rights pillar as part of the Unilever Sustainable Living Plan, Fairness in the Workplace, strengthening its human rights policy framework across functions and geographies to include new policies that guide its relationship with employees, suppliers, partners, and stakeholders.10
The United Nations Development Programme (UNDP) has come up with six best practices for companies to integrate human rights into their business – particularly SMEs, which may find the journey from intention to action more difficult than larger companies.11
1. Understand risks and impacts
A company should identify its human rights risks and impacts and know the scope of its responsibility. According to management consultancy Business for Social Responsibility (BSR), the extractives sector needs to focus on issues like environmental impacts,
labour risks, economic and social disruption, security incidents, land acquisition, indigenous peoples, supply chains, bribery and corruption, cumulative impacts, and access to remedy (a core element of the UN Guiding Principles). Anglo American provides a good example of how to address actual and potential human rights impacts with its Social and Human Rights Impact and Risk Analysis (SHIRA). This tool is shaped by the UN Guiding Principles and helps the company to identify, prevent, mitigate, and account for how it addresses impacts.
In the telecommunications sector, digital human rights that require safeguarding include freedom of expression, data privacy and protection, information security, and the rights and principles of Treating Customers Fairly. These are an integral part of the MTN Group’s Digital Human Rights Policy and due-diligence framework, for example, which is guided by globally defined standards that include the Universal Declaration on Human Rights, the UN Guiding Principles, the African Union Convention on Cyber Security and Personal Data Protection, the ECOWAS Supplementary Act on Personal Data Protection, and the SADC Model Law on Data Protection. In practice, this plays out in a number of ways, including managing customers’ privacy rights, empowering them through fair treatment, protecting children online, restricting illegal or harmful content, and tackling discrimination.
2. Educate employees
It is important that employees are aware of human rights principles so that they can help to integrate them into the business. Although human rights law forms part of labour law, many employees remain unaware of their rights. Companies should therefore educate their staff about their rights, particularly within the context of the Promotion of Equality and Prevention of Unfair Discrimination Act and the Employment Equity Act. Nestlé has gone as far as to institute human rights training for employees, with respect for human rights embedded in its Corporate Business Principles document. Nestlé encourages companies to adapt this training to their own needs. In addition, rights pertaining to clients, the supply chain, and communities should also be articulated.
3. Articulate commitment
Being vocal about your company’s stance on human rights is essential, as is publicising any policies that demonstrate this commitment. Vodacom has taken a very vocal stance on gender- based violence (GBV), for example. The Vodacom Foundation partnered with the Department of Social Development (DSD) in 2013 to set up the Gender-Based Violence Command Centre (GBVCC) for women experiencing violence and abuse, and in 2019, the company rolled out its ‘Be the Light’ campaign, which calls on men to be change agents and play an active role in stemming the GBV tide. Vodacom has held dialogue sessions internally and externally looking at the role men play in perpetuating but also ending GBV.
4. Embed in the business
Embedding human rights into an organisation means ensuring that they are a key component of corporate culture, with clear policies and procedures driving decision-making across business operations. Senior management should be vocal about the company’s commitment to human rights but should also demonstrate this commitment by actively engaging in responsible business practices. To improve its supply chain sustainability,
Sappi partnered with sustainability performance company EcoVadis to assess the sustainability performance of its suppliers. EcoVadis focuses on sustainability criteria that are grouped into four main categories: labour and human rights, the environment, sustainable procurement, and ethics. “By working together in partnership with EcoVadis and our valued suppliers, we can better identify risk, assess social and environmental performance, and encourage commitment to sustainable choices and the SDGs throughout our value chain,”Sappi said in a statement in July 2021.
5. Be transparent
Being transparent means engaging with your stakeholders and reporting publicly on your progress, but also being open about missteps and failures. Unilever has long been committed to human rights in principle, and in 2014 it released its first report outlining its work on human rights, in which it was frank about some of the challenges it had faced and the lessons it had learnt. As the first company to adopt the UN Guiding Principles Reporting Framework, and the first to provide a detailed report using this framework, it demonstrated its commitment to ‘getting it right’ – however, it indicated that this was a work in progress as it has operations in more than 190 countries in the world.
In 2020, Unilever brand TRESemmé shampoo came under attack for an advertisement that described African hair as ‘frizzy and dull’ and ‘dry and damaged’, with a white woman’s hair referred to as ‘normal’. Protests against racism saw Unilever pulling the haircare products from shelves and taking a decision to drop the word ‘normal’ from all beauty products in future. Unilever’s 2020 human rights report reads: “Given the social relevance of the issues of racism and institutionalised discrimination, Racial and Ethnic Equity has been established as one of four Strategic Identity Groups in our Global Equity, Inclusion and Diversity (EI&D) strategy and we have developed a strategic framework to ensure visible, measurable, sustainable actions to impact representation, employee experience and career progression of Black and Brown Talent.”
6. Provide remedy
If your company has actively caused harm, providing remedy is essential. In South Africa, six mining groups – African Rainbow Minerals, Anglo American, AngloGold Ashanti, Gold Fields, Harmony and Sibanye-Stillwater – faced a class action lawsuit from up to 500 000 former miners who contracted silicosis and/or work- related tuberculosis while working on their mines. A R5 billion settlement was agreed upon in 2018, with the Tshiamiso Trust formed to oversee worker compensation.
This has been delayed because of the pandemic, but compensation is expected to be paid out to affected gold mineworkers and their families over the next ten years. In recent years, mines have worked towards ‘zero harm’ and doing more to safeguard the health and safety of their miners. The benefits are clear – looking after the wellbeing of workers and their communities makes for a more stable, less inherently risky business environment.
Applying best practice
Human rights are no longer incidental in the workplace – they are a fundamental part of a company’s social responsibility. However, many companies are uncertain about how to integrate and implement best practice when it comes to human rights. As mentioned, GNC-SA and the NBI have developed a toolkit to assist companies, which brings together a variety of resources for them, such as which strategies, policies, processes, and procedures they should have in place, and which human rights benchmarks they should measure themselves against. They also provide links to a network of organisations engaged in human rights.12
Ultimately, companies should realise that human rights are an integral part of corporate sustainability, the impact of which extends far beyond corporate social investment. Human rights are at the core of day-to-day operations precisely because they are founded on human dignity and worth – everything we say and do either promotes or infringes on the rights of others. Companies that understand this landscape will perform better than those that do not, simply because they acknowledge that people are their greatest asset, both within and outside of the workplace.
- Holland, M., Dr. (2017). Health impacts of coal fired power plants in South Africa. Accessible at: https://lifeaftercoal.org.za/virtual-library/resources/health-impacts-of-coal-fired-power-plants-in-south-africa-2017
- Gray, H. A., Dr. Air quality impacts and health effects due to large stationary source emissions in and around South Africa’s Mpumalanga Highveld Priority Area (HPA). Accessible at: https://cer.org.za/wp-content/uploads/2019/06/Andy-Gray-Report.pdf
- The UN Working Group on Business and Human Rights. (2011). The UN Guiding Principles on Business and Human Rights –
An Introduction. Accessible at: https://www.ohchr.org/Documents/Issues/Business/Intro_Guiding_PrinciplesBusinessHR.pdf
- Fuphe, Z. (2021). Why good corporate governance goes beyond mere compliance. Accessible at: https://www.itweb.co.za/content/rxP3jMBmOgj7A2ye
- Morrison, J. and Olofsson, J. (2020). Human rights must find a permanent place in the boardroom. Here’s why. Accessible at: https://www.weforum.org/agenda/2020/12/business-human-rights-must-find-a-permanent-place-in-the-boardroom/
- World Benchmarking Alliance. (2020). 2020 Corporate Human Rights Benchmark. Accessible at: https://www.worldbenchmarkingalliance.org/corporate-human-rights-benchmark/
- Allsop, G. (2021). Here’s what’s in the new Equality Bill. Accessible at: https://www.groundup.org.za/article/new-protection-proposed-victims-hate-crimes/
- Refinitiv. (Undated). Refinitiv Satrix South Africa. Accessible at: https://www.refinitiv.com/en/financial-data/indices/equity-indices/refinitiv-satrix-inclusion-diversity-index
- www.eni.com. (2020). For Human Rights. Accessible at: https://www.eni.com/assets/documents/eni-report-human-rights.pdf
- www.unilever.com. (2020). Human Rights report: Creating a fairer and more socially inclusive world. Accessible at: https://assets.unilever.com/files/92ui5egz/production/3309dd602b6a698bd4b6fa12f74cdf1d4f807d74.pdf/Unilever-Human- Rights-Report-2020.pdf
- Lee, M. and Vali, N. (2018). 6 ways companies can integrate human rights. Accessible at: http://www.undp.org/blogs/6-ways-companies-can-integrate-human-rights
- National Business Institute. (2016). Toolkit for Business and Human Rights in South Africa. Accessible at: https://www.nbi.org.za/wp-content/uploads/2016/06/Human-Rights-Benchmark-Tool-2-2.pdf