Creating Value Through Human Rights in Business

The issue of globalization and open markets is in the forefront of public debate these days, and this is not only because it affects the economy, but human rights as well. The most common concern is that free trade would enable companies to shift production of goods and services to countries where workers get abused and exploited. The United Nations recently adopted the Guiding Principles on Business Human Rights (UNGP). While the implementation of the UNGP was welcomed, there are serious challenges that concern the responsibility and accountability both on the side of businesses and governments.

Former German Commissioner on Human Rights Markus Loening pointed out that the real debate is the intertwine between business and political issues. “How can we create a world order that enforces the rule of law in a globalized world? Where does the responsibility of businesses end? Where does political intervention begin?”

The primary task of ensuring human rights lies with the state. Corruption and inefficiencies in the judiciary, the security forces and the bureaucracy, especially among health and safety inspectors, are key reasons for human rights abuses. However, this does not absolve companies from acting responsibly within their own domain.

The pilot Corporate Human Rights Benchmark (CHRB) was released in March 2017. Interestingly, the report shows that companies have recognized the commercial viability of taking action on human rights, and there are emerging practices that already integrate the discussion of human rights in boardroom meetings. After all, respecting human rights is part and parcel of true professionalism. Abused workers will not be productive and professional employees which will hurt companies in the longer run. However, grave concerns remain on the follow through on these commitments, and this is where government can step in by using a “smart mix of regulation and incentives to enhance transparency and minimum standards of corporate behavior.” Perhaps more importantly, this is where civil society can also play a role by similarly engaging with companies, and rewarding human rights-related policies and programs.

Cambodian high-rises

The construction industry in Cambodia is growing. High-rise commercial and residential buildings are shaping Phnom Penh’s skyline. However, taller structures mean riskier jobs for workers. Safety standards in construction sites are now in the limelight in Cambodia as workers’ lives literally hang in the balance.

The entry of foreign companies to engage in construction work has opened up not only the capital to investments, but to new practices particularly in safety regulations. A new building, which is expected to be ASEAN’s tallest, is in the works in Phnom Penh. The Taiwanese firm involved in the construction is dedicated to offering quality work as well as to providing a model of building safety.

An earlier initiative of a civil society group is also giving recognition to companies that improve health and safety in the construction industry. Branded as the Golden Helmet Award, the project advocates for regular equipment maintenance, and providing the essential equipment to guarantee the safety of workers.

The introduction of these safety standards has prompted Cambodian property buyers to become more selective of where they will invest – they look for seals that warrant that the building was constructed safely. After all, sloppiness in safety standards is usually connected to sloppiness in material quality and in building techniques – and such sloppiness can have expensive consequences later.

Philippine rainbow

Commitment to diversity in the workplace is demonstrated when differences among people is recognized and valued. IBM Philippines exemplifies this when it became the first unit in the ASEAN region to extend benefits such as health coverage to its employees’ LGBT partners.

In a 2013 survey, the Philippines ranked among the most gay-friendly countries in the world, the high level of acceptance being comparable to that in secular Western Europe. However, legalizing same-sex marriage continues to be an uphill battle, with the country’s President Rodrigo Duterte looking at the subject as another imposition of western values.

IBM Philippines’ move reinforces its strong stance on equal rights and inclusiveness. Mainstream media widely covered IBM’s announcement of benefits for LGBT domestic partners, getting acclaim and encouragement from the wider LGBT community and the general public.

This expansion of benefits has meant IBM was able to attract diverse talents, especially as more and more young people choose to work for “good companies.”

Everybody’s business

The state’s duty and corporation’s responsibility to protect human rights require reciprocal support from both stakeholders, but also from consumers. The state should ensure an environment conducive to business respect for human rights. Corporations should exercise due diligence in mapping human rights risks in their supply chain. Consumers should demand that what they buy are not products of inhuman working conditions, accidents, discrimination, and slavery.

In a globalized world, the promotion of free trade should come hand in hand with an equally strong lobby for the protection of human rights. After all, the question to businesses now is not how much is your production cost, but how much are you adding to the good of society. That’s real value.