BLIHR | Step 2

STEP 2: Identify potential human rights risks and opportunities in your operations

It is important for a company to map its existing strategy and policies and undertake a gap analysis to establish how well human rights issues are covered and whether additional policies or strategic changes are needed.

A crucial part of the gap analysis is to identify human rights risks and dilemmas facing your business operations. The Business and Human Rights Matrix can be used to assist in identifying which policy areas with human rights sensitivities require corporate attention. There are many examples of human rights dimemmas faced by companies around the world on a daily basis; a few are listed here.

Human Rights Dilemmas – Some Examples

LACK OF RULE OF LAW - How do you operate within international standards where corrupt financial practices are prevalent; where lack of laws and the improper administration of justice are prevalent; and where authorities demonstrate very limited respect for human rights?

WEAK LEGAL ENFORCEMENT - How do you operate in emerging economies where rapid growth and development exceed the capacity and capability of the local government infrastructure to ensure proper human rights protection?

SECURITY - How do you obtain protection for personnel and plant when the state security forces are known to use excessive violence and commit other human rights abuses against the local population? How do you ensure you are not perceived as complicit in such abuses?

DISCRIMINATION - How do you reconcile the realities of traditional work and cultural practices with your own policies and adherence to international standards? How do you ensure disabled workers have equal job opportunities within the company? How do you ensure representation of women at all managerial levels?

MIGRANT LABOUR FORCES - How do you ensure you do not participate in or replicate abuses against migrating populations (who may not have equal access to basic services usually afforded to local populations such as healthcare, education, housing and legal assistance)?

REST, LEISURE AND PAID HOLIDAYS - How do you keep production costs competitive when you operate in a country where there is no legal mandate for overtime limits, premiums or paid holidays, but you wish to follow international standards?

PRIVACY - How do you balance the marketing advantages of registering your customer information with their legitimate request for protection of their right to privacy?

HOUSING - How do you evaluate the financial impact of upgrading staff quarters to international minimum requirements when performing a due diligence assessment of a factory that you plan to take over or outsource work to?

Failure to manage dilemmas properly may lead to additional risks. These may include negative impacts on stakeholder relations, such as with customers, shareholders and investors, employees, suppliers, local communities, and local and national governments. Consequences of poor management of risk may include possible operational disruption, negative publicity and associated brand damage, or a negative impact on investor confidence and share value.

However, if dilemmas are properly managed, they can become opportunities for your company. It can lead to assurance of supply of products, better opportunities for positive public relationships with society and the media, and a positive impact on investor confidence and share value. Turning risk into opportunity is a key component of a strategic approach to human rights in business. During the initial scoping phase, a company may also identify other opportunities to promote human rights in the conduct of their regular business activities.

Once risks and opportunities are identified, the next step is to recognise human rights priorities based on these conclusions. The Business and Human Rights Matrix, can assist a company in mapping which ‘essential steps’ are most relevant to its operations. It also provides for best practice examples illustrating the value of applying human rights beyond those which are essential. It allows risks and opportunities to be shown together and helps to identify the human rights content of a company’s sphere of influence.

With a proactive approach, companies can go beyond compliance and use their human rights strategy to create a competitive edge. When integrating human rights in strategy, it is important that the rights are relevant to the specific sector. The food industry, for example, will be expected to have a strategy regarding the right to food, and the pharmaceutical industry to pay specific attention on the right to health.