As Maplecroft launches its Human Rights Risk Report 2009, mapping human rights risk to business in 196 countries worldwide, it is clear that the need for risk mitigation by business is greater than ever. Building on three years data and analysis, Maplecroft’s research paints a gloomy picture of human rights globally on the 60th Anniversary of the signing of the Universal Declaration of Human Rights, calling into question many governments’ commitments regarding the protection of human rights, as well as the role of business in respecting human rights within their sphere of influence.
The findings of the report, which uses 30 unique indices to measure the risk to business of potential involvement with and complicity in human and labour rights violations, show countries ranked as extreme risk are predominantly within Asia and Africa. These include emerging economies such as India and China, highlighting areas where responsible business must take action to mitigate risk, promote responsibility and protect reputation.
The report also assesses localised risk within a number of extreme risk countries, to enable business to understand and distinguish ‘hotspots,’ allowing for the assessment of risk and targeting of risk mitigation measures at the factory, farm, pipeline, town, city or administrative level. This localised level of risk assessment is vital for companies operating in high and extreme risk countries for human rights, to avoid being considered complicit in violations perpetrated by suppliers and other business partners, even if their own operations are well managed.
Bangladesh is a case in point, where incidences of the use of child labour and poor ‘sweatshop’ working conditions are high. Maplecroft’s
indices show that there has been little to Localised human rights risk profile: Bangladesh
no improvement in working conditions in Bangladesh over the last few years. Bangladesh scores in the ‘extreme’ risk category, with particularly poor scores for child labour and working conditions. Maplecroft’s GIS-derived localised human rights risk maps show a clear cluster of human rights violations perpetrated in or around Export Processing Zones in Dhaka and Chittagong in particular (see map).
Localised human rights risk Bangladesh profile: Link to the map usage -http://share.maplecroft.com/HRRI/Map_GIS_Bangladesh.jpg
These data sets and analysis show as much variation between individual violation categories (human security, labour rights and protection and civil and political rights) within countries as between them. For example a region might be extreme risk for labour rights violations but lower risk for human security violations. Responsible business must, therefore, understand their risks and prioritise their risk mitigation efforts according to the risks relating to those rights categories that are most pertinent to their business, no matter where they operate.
Other risks facing business include dilemmas posed by working within countries in which the rule of law has broken down or where the government is not effective in protecting internationally recognised human rights. This is particularly the case within conflict zones where the government has lost control of part or all of its territory. The Democratic Republic of the Congo (DRC) is a good example.
Research shows that DRC has ranked as the worst place for reported human rights violations globally, for a second consecutive year. Twenty-two of the 24 human rights violation categories receive a score within the extreme category, the remaining two (discrimination and freedom of religion) are found to be high risk. Maplecroft’s GIS-derived localised human rights risk maps show that the highest risk area within DRC are the Kivus, areas largely controlled by rebel forces but which also contain valuable mineral deposits of coltan and tin. Allegations, including payments to rebel groups and sourcing from mines that use child and forced labour, have been made against companies that source minerals from these regions.
These cases exemplify the risks responsible business faces when operating in and sourcing from countries with a proliferation of human rights violations, including where the state is largely accountable. But responsible business can also play a role in the promotion and protection of certain human rights where the state has failed. Managing the risk of complicity in human rights violations is fundamental to the reputation of responsible business and consumer confidence in their products.
The poor picture of human rights realisation that we describe on the 60th Anniversary of the signing of the Universal Declaration of Human Rights, underlines the imperative for business to incorporate human rights considerations into both strategic and operational decision making. The area of ‘business and human rights’ is rapidly expanding and taking shape, significantly advanced by the work undertaken by the Special Representative on the issue, John Ruggie. However, there remains a long way to go. Whilst Maplecroft’s research highlights the dilemmas and challenges that responsible business faces when working in countries with a poor human rights record, it also serves to highlight and identify areas in which business and policy makers can contribute to the promotion and improvement of human rights throughout global value chains.
Recommendations to policy makers
There are no easy answers to the question of how far the boundaries of corporate social responsibility should extend, but it is clear that responsible business has a role to play in economies where there is a high risk of involvement with and complicity in human rights violations. Across-the-board divestment makes neither economic nor humanitarian sense. Companies, if they stay in high and extreme risk areas, can become part of the solution by following these recommendations:
• Develop business principles based on the U.N. Global Compact
• Establish a human-rights policy supported by training and monitoring systems and the empowering of local managers
• Create an ethical supply-chain management system
• Work with expert third parties to audit activities and suppliers
• Engage on human rights dilemmas and solutions with internal and external stakeholders
• Build relationships with employees and address humanitarian and human rights flash points, such as disasters and conflict zones
• Develop sustainable social investment programs with employees, their families and local communities
• Engage in dialogue with host governments to promote transparency and promote human rights
• Build trust with home-country governments and avoid communicating with politicians via the media
• Communicate regularly with civil society organisations and the media in Europe and the US
For more information: humanrights@maplecroft.com, www.maplecroft.com
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About Maplecroft
Maplecroft advises global companies and organizations to help them identify and measure social, economic, political and environmental risks.
Using this risk insight and information, Maplecroft works with companies and organisations to manage their risks and responsibilities, often in collaboration with affected stakeholders.
Maplecroft helps businesses to gain both strategic insight and reputational advantage through effective and creative communication of their risk and responsibility policies and performance.
Maplecroft Human Rights Risk Scorecards are one in a series of products that provide accurate, detailed and easy-to-use information about non-financial risks at the country level.
Other risks covered by the series include climate change, political risk and health.