This article is written by Mohit Kumar, pursuing Diploma in Law Firm Practice: Research, Drafting, Briefing and Client Management from LawSikho. The article has been edited by Tanmaya Sharma (Associate, LawSikho) and Smriti Katiyar (Associate, LawSikho).
Never start a business just to “make money”, start a business to make “DIFFERENCE” -Marie Forlio. Humanity and greed are two qualities of human life that overlap each other more than we think in the world of business operations. Business operations are necessary for the growth of the economy of any state and the advancement of the human race. They have both positive as well as negative impacts on the lives of people.
They create employment for a huge number of people. Businesses intend to provide products and services which make life easier and comfortable etc.
Businesses have adverse impacts on the human rights of people in the form of forced labour, invasion of privacy etc.
The growing conflict between Human Rights and business is relatively new but it has its inception in the past from industrialization, colonialism and globalisation. Let us discuss the burgeoning field of business and human rights; its history, the role of the state, the United Nations and businesses in maintaining a balance between human rights and business operations in perspective.
History of business and Human Rights
During the Industrial Revolution, the role of the state was limited to that of a mere watchman. Economies were governed by the policy of Laissez-Faire (Leave Businesses Alone). Here, the State did not interfere in the free economy. Business Enterprises operated as per their whims and fancies, unrestricted by state.
But this unbridled freedom to business enterprises led to gross violation of the natural rights of human beings during the colonial period. Business enterprises were guilty of colonialism, slavery, apartheid, human trafficking which are considered crimes against humanity.
It was realized that business operations cannot be left unchecked for the sake of society at large.
The concept of Human Rights
The Charter of The Universal Declaration of Human Rights was introduced by the United Nations in 1948 laid down guiding principles of inalienable human rights which are the basis of a decent life. These Human Rights are inherent and fundamental to all the human beings living on the planet irrespective of class, caste, religion, place of birth and colour. They are based on the principles of equality, dignity, freedom and fairness.
This charter makes it necessary for all the States and Persons (natural or juristic) to implement and respect the internationally recognized human rights of all the individuals in the world.
The need of guiding principles on business and Human Rights
With the advent of Globalisation, the economic market of a State is no longer limited to only domestic players. In the International Free Market, Companies are now operating globally. They have grown bigger, richer and are more powerful than they have ever been. The turnover of some companies is more than the GDP of many developing and underdeveloped countries. This puts them in a dominant position and increases the risk of human rights violations in their operations. In the race for economic development and to attract foreign investments, states were reluctant to address the abuse of human rights by their own business operations or trans-national business enterprises.
The United Nations laid down the guiding principles on business and human rights in 2010, laying down the role of the state, business operations for the smooth operation of business operations without violating the human rights of any individual.
The role of the State
The State cannot sit and act as a watchman as it used to in the Laissez Faire. Now, the State has to act as the protector of the people and their rights. The state has to safeguard people not only from external aggression but also from the internal passive abuses in the form of economic development. The state should strive for a balance of sustainable economic development.
The first and foremost duty of the state is to be proactive and prevent any abuse of human rights in its own business operations or of any third party. The state is duty-bound to foresee any potential risk to the enjoyment of human rights by any business activity. If there is any impending abuse of human rights then the state should address the same promptly. The state should be extremely careful in business operations in conflicted and high-risk areas as the chances of human rights abuse are extremely high.
The state cannot ignore the impact on human rights while encouraging economic developments and Foreign Direct Investments. The state is the knight in armour for the people to protect themselves against giant business enterprises.
The state can avoid any human right abuse
- Enforcing strong labour laws that safeguard the poor and illiterate labour from any coercion, violation of their human rights.
- Labor Inspections at fixed intervals to reduce the risk of slavery, forced labour, child labour and unhealthy working environment.
United Nations guiding principles on business and Human Rights
Introducing and implementing strong corporate laws that encourage businesses and enterprises to respect human rights.
- Avoid collaborating with any business enterprise that hinders the enjoyment of human rights.
- Framing policies that promote and assist in identifying, addressing and mitigating any risk of human rights abuse by business entities.
- Denying public access to any business enterprise which is involved in human rights abuse.
- Providing training to the government aided business practising agencies to maintain human rights obligations and maintain domestic policies that promote human rights enforcement.
- Raising the Licensing requirements, which make it mandatory for business enterprises to respect human rights in their operations.
Remedial of Human Rights abuse
- Addressing any violation of human rights promptly.
- Establishment of a judicial and non-judicial grievance system for complaint, investigation and remedy of any violation of human rights if occur.
- The state should make sure that those affected are adequately compensated.
Role of the businesses enterprises
Businesses are operating to make profits. But they cannot abuse human rights or hinder the enjoyment of human rights in their operations. Such violation will lead them to lawsuits, loss of goodwill and investments, heavy penalties or cancellation of license or winding up of their operations. To sustain for a longer time, businesses should operate in coordination with human rights.
Business enterprises are required to:
- Comply with the labour laws of a country.
- Avoid infringement of any of the human rights of the workforce or customers in their operations.
- Mitigate any human rights abuse if it occurs in their operations.
Even if the state is ignorant of human rights, the business enterprises should respect human rights in their operations.
Business Enterprises can respect human rights by:
- Conducting enhanced Human Rights due to Diligence-The United Nations guiding principles on Business and Human Rights urges the business enterprises to conduct enhanced human rights due diligence to identify, prevent and mitigate risks of abuse of human rights.
As a preventative measure, Business Enterprises should conduct due diligence to address the vulnerable section of people whose human rights might be infringed in their operations. If there is any potential abuse of human rights, the Business Enterprises should address the same and cooperate with the state for a quick remedial of the same.
- Complying with all applicable laws of the state.
Due diligence under United Nations guiding principles on business and Human Rights
Honouring human rights in case of any conflict with business operations. People need businesses for a comfortable life and businesses to need people as clientele for their exponential growth. They benefit mutually from each other.
The outbreak of COVID-19 exposed that despite the existence of various labour laws, corporate laws and guiding principles of the United Nations on Business and Human Rights, the relationship between businesses and human rights still remain estranged.
Businesses all over the world abused the following human rights of people in the pandemic in form of:
Abuse of right to work
The life of workers has drastically changed in the spread of COVID-19, approximately 450 million workers around the globe have been directly impacted. They have either lost their job or are underpaid or are forced to work for longer or shorter durations or their incentives have been cut down or they are forced to work in an unhealthy environment.
Health workers worked tirelessly, risking their lives but they are still underpaid. The private hospitals charged exorbitant fees from the patients in the pandemic.
Abuse of right to health and life
The basic safeguards against coronavirus like masks, sanitiser, gloves and PPE kits were hoarded, to later sell them at exorbitant prices. Further, in India medicines like Remdesivir were sold in the black market, making them out of reach of the common man. To add more to the injury, fake vaccines and sanitisers were also introduced in the market.
Example: Vaccine shortage in poorer countries.
Vaccination is the only way to contain the coronavirus yet. The vaccine manufacturers play a vital role in achieving this goal. But they are reluctant to share the formula of their vaccines for the reason of intellectual property protection. This prevents the availability of vaccines for people in poor countries. “The current pace of vaccination is very slow, some countries would not have vaccinated the majority of their populations before 2023, risking lives of millions at stake. This is a serious concern for the world.”
The pandemic was the worst nightmare for migrant workers all over the world. They are the most impacted class in the world. Many lost their jobs; others are being forced to work for less than minimum wages, forced to work in an unhealthy environment, spent all their savings and are left with heavy debts.
Businesses and States did not look after the well-being of the working class. During the lockdown, workers were forced to work in miserable conditions for less than minimum wages, risking exposure to coronavirus.
In India, migrants were forced to return to their native places due to the lockdown. With no public transportation available, they had to take up arduous journeys of thousands of kilometres on foot. Many migrant workers lost their lives on the journey to their native places.
No place to go
Seafarers are stuck in the sea for a period longer than their contracts. State and Business Enterprises are negligent in resolving this problem. The emotional and physical well being of people is at stake.
Example: Seafarers stranded at sea.
Abuse of Human Rights by state and business enterprises in India
For the gains of earnings in cricket, BCCI (Board for Control of Cricket in India) organized the Indian Premier League (IPL), which led to an upsurge in the number of covid cases in India, abusing the right of the health of players and audience.
Infringement of right to privacy
Despite the Right to privacy having been recognized internationally as a basic human right, the Internet companies have time and again shared the data of users to third parties invading their privacy.
example: Privacy Scandal by Facebook.
Business operations have a profound impact on the biosphere. Businesses abuse the right to a healthy life by exploitation of natural resources like air, land and water. Factories pollute the air and water, severely affecting the quality of life of people.
Example: Illegal Mining in Brazil.
Violation of right to property
Businesses need land for their operations which cause resettlement of natives. The loss of habitat violates their right to property and destroys their livelihood.
Modern slavery (forced labour)
The modern form of slavery (forced labour) is still carried out on vulnerable and trafficked people in China and Japan. Over 200 big companies have their manufacturing units in this region where forced labour is carried out.
Example: Forced Labour in China and Japan.
The pandemic revealed that to achieve the goal of sustainable development on the part of the state as well as business enterprises, bare guiding principles are not sufficient. The world needs stricter human rights treaties, customs and policies that have a direct legal obligation on the businesses operations.
State and Business Enterprises have to play an important role in getting society back on track post the pandemic, with special care to the most vulnerable.
State and Business enterprises should coordinate to resolve the current issues by –
- Speeding up the Covid-19 vaccination drive, setting up covid proof workplace, providing basic wages to workers.
- Hiring people of all cultures and races at all levels.
- Forced Labor by strict inspection of the supply chains.
- Promoting environment-friendly operations, regulating emissions.
- Promoting a safe and healthy working environment for women to work.
- Data protection by ensuring an end to end encryption.
- The mental health of children by promoting healthy food and censoring the content of online games and shows.
- LGBTQ movement by increasing representation of all the sexes in their operations.
State as well private business operations in Finances can resolve the crisis of growing poverty by providing loans to people to restore their livelihood. Loans should be granted with minimum or no collateral with the least documentation. This will save people from falling into the trap of greedy money lenders and they will be able to enjoy the right to a dignified life.
The clock is ticking. The world needs strong international human rights rules that have direct legal obligations on the business operations around the world. These laws should govern all business operations around the world. The United Nations and the respective states immediately need to introduce and implement such hard laws which minimize the abuse of human rights in business operations.
Businesses have the potential to promote a good life along with making profits. Businesses are also operated by natural persons only. It is high time that business operates with the values of humanity and fairness along with a motto of profit.
Making a positive impact along with profit is the best way for a business operation to sustain and grow.
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