Whenever I participate in events about business and human rights, the one question that always pops into my mind is: “Do you have a human rights division in your company?” Surprisingly, there are only a few companies that do and others claim that it is under their corporate social responsibility (CSR) divisions.
Is business and human rights the same as CSR? I was confused because technically, all activities that companies do as part of their CSR programs are related to human rights. In fact, they can fulfill the human rights of others.
However, despite my reasoning, business and human rights is different than CSR. It is more than CSR.
The CSR concept emerged in the 1950s. It is a concept where companies “do good”. According to François Maon’s paper, CSR is a stakeholder-oriented concept that extends beyond the boundaries of the organization, driven from an ethical understanding of the responsibility of the organization and its impact on business activities, seeking in return the willingness of society to accept the legitimacy of the business.
In reality, studies have shown that CSR tends to be implemented based on the organization’s strategy, structure and culture. On the other hand, business and human rights has been globally discussed since the late 1970s, specifically concerning the human rights impact of corporations. These global debates led to the creation of several international standards and initiatives, in which human rights concerns were recently added.
Such initiatives require corporations to pay more attention to and respect human rights to become eligible to compete worldwide.
Moreover, in 2011, the UN adopted the UN Guiding Principles on Business and Human Rights: Protect, Respect and Remedy Framework. The framework clearly describes the roles of corporations in respecting human rights throughout their business operations by implementing human rights due diligence.
There are five elements of human rights due diligence: human rights policy, assessing impacts, integration, tracking performance and a grievance mechanism.
Firstly, corporations should state that they are committed to respecting human rights by creating a human rights policy. The policy should be declared by the top management and known by every staff member within the corporation.
Secondly, corporations have to closely assess their potential human rights impacts throughout their business operations, including on the environment and local communities. This step is important to prevent and decrease the risks of any human rights violations.
Thirdly, human rights should be integrated within the overall management system by assigning responsibility for human rights, providing human rights training for every staff member and adding this to the corporation’s culture. Once human rights is integrated in corporations, it is important to track the companies’ performances. Companies can develop key performance indicators that will later be evaluated and reported to see whether they are moving in the right direction.
Last but not least, companies should develop an effective grievance mechanism, so that victims know who to contact if their rights have been violated.
The above explanation of human rights due diligence is the main aspect that differentiates business and human rights from CSR. Business and human rights focuses on the human rights of local communities, then incorporates them into business policies, management systems and culture. CSR tends to follow organizational culture to implement social activities.
Business and human rights concerns every aspect of human rights, thus it has a larger scope than CSR, which is only concerned with stakeholder demands. In addition, business and human rights has to face lawsuits and political claims, while CSR only has to face social complaints. If business and human rights is implemented by companies, they will ensure the sustainability of the future market, while CSR will only ensure consumer and stakeholder satisfaction.
For several years, companies have tended to see conflicts such as land grabs, low wages or pollution mainly as violations of the law. They do not see the big picture, which is the fact that all the conflicts they face are results of human rights violations. Thus, the business and human rights concept provides ways to prevent such violations.
The three pillars of protect, respect and remedy clearly encourage dialogue between all stakeholders, including the government, private sector and civil society, to figure out ways to respect human rights and prevent potential conflicts within their everyday operations.
CSR, on the contrary, only deals with social issues that are already happening within the communities where the business operates. Although CSR in Indonesia has already been transformed into a law on corporation limited liability and several regional bylaws, it does not clearly have the system or mechanism to prevent potential harm.
Such regulations are only to monitor the implementation of CSR by companies operating in the area. They are designed to plan, monitor, evaluate and report on CSR to local governments and legislative councils. In other words, it does not offer ways of how companies can prevent human rights violations.
In conclusion, business and human rights is a much bigger concept than CSR. It challenges corporations to respect human rights to reduce conflicts and shape future markets. Most multinational companies already have human rights policies. The big question lies in their implementation, especially with regard to respecting human rights.
The writer is an assistant program officer on business and human rights at the Institute of Policy Research and Advocacy (ELSAM).