Having a stated human rights policy is no longer a matter of choice, but a business imperative for an increasing number of companies around the world. And in the Indian context, it’s just right that two of the country’s largest and respected companies the Tata Group and Indian Oil have made it to the list of 270 companies worldwide to have adopted a human rights policy statement, according to a report released at a recent UN Business Summit in the US.
Companies everywhere are realising that human rights are core business concerns. It’s about putting people at the centre of what businesses do. Its about the social sustainability of markets and enterprises. “This understanding builds on a longstanding tradition in the relationship between business and communities in India,” says John G Ruggie, special representative of UN secretary-general for business and human rights.
Explaining the rationale behind having a written policy, VC Agrawal, director (Human Resources), Indian Oil & director-in-charge (IBP division), says, “It’s helpful to have a written human rights policy in todays world because human beings are now increasingly being seen as central to business, and everything flows from a policy.”
Ruggie was the star speaker at the UN Global Compact Leaders Summit, which was attended by representatives from over 1,000 businesses and saw high profile NGOs share the list of companies having a human rights policy. The UN Global Compact is a public-private initiative, which encourages companies to commit to sustainability and corporate citizenship by adhering to its principles on human rights, labour, environment and anti-corruption.
Recent problems like those in land acquisition have highlighted the need for businesses to look into human rights aspects. And even the Tata Group, despite its long track record of corporate social responsibility, was the target of public ire in Singur, West Bengal, over land acquisition, which finally led to its group company Tata Motors abandon the Nano project and shift to Gujarat. Companies are realising that they not only have to respect human rights, but also demonstrate it. If businesses have to grow, they cannot operate in their own islands of prosperity amidst deprived population. If they do so, it can lead to a backlash, says Uddesh Kohli, a special adviser to the UN Global Compact.
Delays over land acquisition alone can derail investment of about $100 billion, estimates industry chamber Assocham. And the risks are from multiple, ranging from investors pulling out over allegations of human rights violations, as in the case of Vedanta, to firms facing criticism for buying assets in conflict-ridden countries like Sudan, as in the case of OVL.
Elaborates Mark Hodge, director, UK-based Global Business Initiative on Human Rights, “The costs are increasingly high under various heads like financial (including limited access to capital markets), reputational, legal (including the cost of litigation), operational interruptions and cancellation of licence to operate.”
Based in New Delhi, Hodge consults with Indian companies and speaks regularly at business and human rights roundtables. One of the key messages from such workshops is that when companies take care of human rights of neighbourhood populations, particularly in improving their quality of life, its likely to ensure availability of healthy and educated manpower, consumers for their products, and local goodwill, which secures amicable environment for their operations.
The need for getting the human rights approach right is felt all the more in areas with weak governance or in conflict-like situations, where philanthropic or corporate social responsibility initiatives may not earn adequate rub-off. “A number of Indian companies have a long and respectable tradition of philanthropy,” points out Salil Tripathi, policy director at UK-based Institute for Human Rights and Business. He added, “What these companies should do is to connect these dots and learn from the international experience, which shows that philanthropy is entirely voluntary, corporate social responsibility is desirable, but accountability and respecting human rights is increasingly essential and necessary.”
The realisation needs to sink in sooner than later. The government policy is already moving ahead in this direction. Voluntary Guidelines on Corporate Social Responsibility issued by the ministry of corporate affairs in December 2009 urge companies to respect human rights for all and avoid complicity in human rights abuses. Its now the turn of companies to respond.
Source: The Financial Express
Published on 18 July 2010