This article was originally posted on the ACC Docket here.
24 May 2019 | Anna Triponel
Photo: Anna Triponel, business and human rights advisor at Triponel Consulting, speaking at the ACC Europe Annual Conference 2019
On May 13, 2019, I spoke at the ACC Europe Annual Conference 2019 in Edinburgh on “Human Rights and the In-house Lawyer: Creating and Maintaining an Ethical Business.” John Morrison from the Institute for Human Rights and Business (IHRB) provided an overview of the direction of travel and the legalization of companies’ human rights responsibilities while Moira Oliver from British Telecommunications plc (BT) provided insights from her personal experience on BT’s journey respecting human rights, sharing suggestions for fellow lawyers along the way.
My part of the panel was titled “Business and Human Rights in Practice for In-house Legal Teams,” and I spoke about key lessons learned from general counsel and legal departments when it comes to business and human rights. Our session was oversubscribed, and the room was full, which is a solid indication of the growing importance of this topic for in-house lawyers. I am providing here an overview of my comments, for those lawyers who were unable to join us in person.
How many of you went to law school more than 10 years ago? Twenty years ago? Thirty years ago? I set foot in my first law course 19 years ago and — like many of you, I’m sure — prided myself on getting a strong legal education. I spent many hours in the library, I read all the books my professors had written, I wrote lengthy papers, I sat for exams in New York, London, and Paris, and I qualified to practice law in the three countries where I took those exams.
Nonetheless, when I started practicing corporate law (I was an M&A lawyer in New York, specializing in cross-border transactions), I felt that law school hadn’t provided me with the tools I needed. Before joining the firm, I had spent time in Africa and Asia as part of work on the Millennium Development Goals with the World Bank.
I had seen where several of my clients’ operations took place and where their suppliers were from. I had also focused my research in law school on the intersection between business law and human rights law. So, I was troubled when my focus as a lawyer was solely on legal compliance, including when local counsel on the ground in higher risk countries supported me in assessing legal compliance.
At the time, it was unclear what could be expected, and what could not be expected, of multinational companies operating overseas. Harvard Professor John Ruggie was appointed by Kofi Annan, then UN Secretary-General, in 2005 to find an answer to this question.
I had the immense privilege of working with Ruggie and his team, initially as their pro bono lawyer, and then believed in this work so profoundly, I left the firm to continue supporting the process as a consultant to the Harvard Kennedy School of Government.
Since then, I’ve had the opportunity to work with many forward-looking general counsel and legal departments around the world. I wanted to share with you today three statements I frequently hear from in-house lawyers and how forward-looking legal teams are responding to them.
1. “The law is the law. I don’t see how I can do anything other than comply with the law.”
So, let me ask you:
- If the law criminalizes homosexuality, and requests that you report homosexual employees to the authorities so that they can be put in prison, or put to death, would you do it?
- If the law allows you to drill in a national park, without consideration for wildlife or local communities, would you do it?
- If the law asks that you severely restrict your workers’ ability to leave their jobs freely, would you do it?
Let’s be clear: We are not saying here you should blatantly violate the law. The UN Guiding Principles recognize that companies need to comply with applicable laws. At the same time, companies are now expected to assess how applicable laws compare to international standards.
Does the law fall short of international standards? Does it contradict them? Companies are expected to have some visibility into these questions, and to seek ways to honor the principles of internationally recognized human rights when faced with lower or conflicting legal requirements.
What does this look like in practice?
Let’s take an example from Uganda. Extractive companies operating there in 2013 (and in particular French and British companies Total and Tullow Oil) were faced with the potential passage of the Anti-Homosexuality Bill, which included the death penalty for “aggravated homosexuality” and required persons in authority, including themselves as employers, to report homosexuals to the authorities.
This bill stood in direct contradiction to these companies’ global policies. Rather than sit around waiting for the bill to pass, these companies acted. They reiterated their commitments to diversity, organized events on the topic and — importantly — took the opportunity to convey to governmental authorities how bad this law would be for business.
This was particularly compelling since Ugandan President Museveni had publicly stated at the time that he did not need to bow to pressure from the development world (i.e., from the World Bank) since the country would start to benefit from income from its natural resources. The resulting bill that passed was watered down, and the death penalty and obligation to report were removed.
Let’s take another example from the Democratic Republic of Congo. In 2011, British extractive company SOCO International received its permit from the Congolese authorities to explore for oil, including in the Virunga National Park situated in the east of the country.
There was no question regarding the legality of the permit under Congolese law: this exploration was legal. At the same time, we are talking about exploring in Africa’s oldest national park, a UNESCO World Heritage Site and the continent’s most biologically diverse protected area (including being the habitat of the critically endangered mountain gorilla).
Following Human Rights Watch reports of attacks perpetrated against park rangers and local activists and a documentary produced by Leonardo DiCaprio and Netflix, the demand for the company to withdraw intensified. SOCO International received pressure from a wide range of organizations (e.g., UNESCO, the UK Government), individuals (e.g., Richard Branson, Archbishop Desmond Tutu) and investors (e.g., the Church of England) condemning the exploration.
The company received a petition signed by approximately 700,000 individuals and was the subject of a complaint under the UK’s Organisation for Economic Co-operation and Development (OECD) National Contact Point (NCP). As a result of this sustained pressure and the OECD NCP mediation, SOCO decided to abandon entirely its oil exploration plans in the national park and not to conduct operations in any other World Heritage sites, regardless of whether this was legally allowed.
Let’s take a final example from Qatar, where until recently the Sponsorship Law creating the kafala system required all migrant workers to obtain the permission of their employer before being able to change employers or leave the country. Further, the country’s 2004 Labour Law forbade non-Qatari workers from membership in a labor organization, resulting in a complaint lodged against the country at the International Labour Organisation (ILO) for violating the principles of freedom of association.
French concessions and contracting company VINCI decided to take a number of actions to push the boundaries of the law, including issuing advance No-objection Certificates systematically to all workers, creating workers’ committees with elected members, and signing a framework agreement with trade union BWI to monitor working conditions in its operations as well as in its contractors’ operations.
2. “But surely, our role as lawyers is to minimize the legal liability of the company.”
Let me ask you:
- Is it better to fight a court case, tooth and nail, or to use that money instead to try and resolve the grievances at the heart of the complaint?
- Is it better to focus energies on allocating legal liability for an issue, or to find ways to bring in other stakeholders and seek to find a common solution satisfactory to all parties?
Of course, lawyers will always be looking at minimizing the legal liability of the company they work for. This forms part of their role as lawyers. But under the Guiding Principles, they are also asked to look at how they can play a role in minimizing the harm to people their company could be involved in. In fact, the two now go hand in hand. As the laws on the books evolve, not managing one’s human rights risks increasingly translates to legal risks and lawsuits.
Forward-looking legal departments now ask themselves whether they could be considered to have a responsibility under soft law, in addition to the question of whether they have legal liability. In most cases, a company’s legal liability for impacts will be limited, due in large part to the role clever lawyers play when designing contractual provisions. Responsibility for human rights impacts, however, is another matter, and one in which lawyers have a role to play in both helping their company understand how this responsibility may be triggered and what to do about it.
What does this look like in practice?
Let’s take the example of one of the United Kingdom’s largest parcel delivery companies, Hermes Parcelnet.Following reported unacceptable working conditions faced by its self-employed couriers, the company realized it lacked a strong commitment and visibility into its operations. It proceeded to adopt a code of conduct based on respect and dignity and created a grievance mechanism (for which I serve as ombudsperson).
When it lost a UK lawsuit lodged by trade union GMB, the company decided not to appeal the court case. Instead, it sat down to hear what couriers wanted. Over several months of negotiations, the company and GMB reached a solution that worked for both couriers and the company.
With couriers being provided the option of holiday pay, guaranteed pay, and full trade union representation, the company also benefits from happier and more fulfilled couriers, with the resulting positive impacts on retention and productivity that a happier workforce can provide.
Let’s take another example from Dutch brewing company Heineken, which, in 2015, received news of an OECD NCP complaint lodged against it in the Netherlands for firing 168 workers in 1999-2003, at the height of the civil war in the Democratic Republic of Congo. The company could have tried to dismiss the complaint, distance itself from the actions of its subsidiary, or argued that the complaint was time-barred.
Instead, the company decided to sit down and listen to the complaints voiced by the workers, including their deep disappointment that the last bastion of stability that they felt they had (i.e., their employer) had let them down. This resulted in productive negotiations and a successful OECD NCP outcome, both for the plaintiffs and the company.
3. “A number of these challenges are endemic. It’s really up to governments to fix the issues we face.”
Yes, states are the primary duty bearers; they are required to respect, protect, and fulfill the human rights of individuals within their territory and/or jurisdiction. Discussing the role of the private sector should not be seen in any way as reducing this duty, and this was made clear in the Guiding Principles which places the states’ duty to protect human rights as its first pillar.
At the same time, companies are expected to respect human rights, independently of states’ abilities or willingness to fulfill their own human rights obligations. Therefore, companies are unable to point to deficiencies in the states’ approach to human rights to explain deficiencies in their own approach to ethical and sustainable business.
Of course, where governments are unwilling or unable to acknowledge, or “fix”, the issues, this makes it particularly difficult for in-house lawyers to know how to proceed. It can be helpful in this case for lawyers to think about three different types of response:
Collective leverage
In most (if not all) cases, there will not be an easy answer to the human rights-related issue the company is confronted with. Take the example of the excessively high recruitment fees commonly paid by migrant workers in order to secure employment overseas. These payments form part of a global recruitment system; several individuals and organizations benefit from them and they are not easily eradicated.
In response, a few companies including Coca-Cola, IKEA, Hewlett-Packard, Unilever, and VINCI joined forces with other expert organizations to create the Leadership Group for Responsible Recruitment — working to put systems in place to ensure that the costs of recruitment are borne not by the worker but by the employer.
Building channels for worker voice
Faced with systemic human rights challenges, companies have also responded by creating channels for workers to voice their concerns, without fear of retaliation from their employer. Take the example of the slavery, trafficking, and violence that has been uncovered on fishing boats and in onshore processing facilities in Thailand.
As a sector-wide issue that is firmly part of the Thai fishing industry, companies such as Marks & Spencer, Mars Petcare, Walmart, Tesco, and Waitrose have supported the Issara Institute, premised on the continuous monitoring of workplaces through direct engagement with workers. The Issara Institute reports having found a little over 5,500 workers in forced labor situations in one year through this direct engagement with workers.
Transparency
There will be several times when lawyers feel that the challenges are too significant, and that their companies can’t do anything about them. An understandable response may be to close up and say the least possible. However, the opposite response is now expected, and lawyers play a critical role in helping their companies with this transparency.
For instance, in response to the intense scrutiny surrounding how information and communications technology companies respond to government requests for data, UK mobile operator Vodafone enlisted the support of its lawyers. Its in-house lawyers conducted extensive research to compile a public report summarizing the applicable laws in force in the company’s countries of operation, thereby shining a spotlight on the challenge of both meeting the law and the company’s principles, including with regard to the right to privacy.
This insight into applicable law has been updated and expanded. The transparency supports and complements the role of the senior legal counsel at the company’s local operating businesses who advise Vodafone on how to ensure compliance with both the law and its own principles.
Another example comes from Swiss food and beverage company Nestlé whose lawyers played a critical role in the publication of its white paper, “Talking the Human Rights Walk.” While publication of human rights impact assessments in full or of their executive summaries is now expected, this was one of the first disclosures in this regard. Not only does it show steps taken, but it also helps the company be transparent about challenges faced in practice, based on its sector of activity, and the countries it operates in and sources from.
Conclusion
As lawyers, we are trained to know our companies’ risks, to quantify them, and to limit our companies’ exposure to them. We have tools at our disposal to do so, such as contracts, limitations on liability, and rights of termination.
It can feel very uncomfortable to not have all the answers. But navigating complexity is the reality for companies operating in today’s world, and the soft law embodied in the Guiding Principles has been developed to help support these companies as they do so.
Lawyers play a significant role in helping steer their companies through this new reality and lean into the challenges faced to emerge as sustainable, ethical, and rights-respecting companies.