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Applicability to all business

Updated 12 May 2010:  The Special Representative has been collecting views and feedback; here he aims to test some of the propositions that are emerging.

The corporate responsibility to respect human rights applies to all business enterprises regardless of size, industry, region or ownership.  The scope of the responsibility to respect human rights is determined by the actual and potential impacts of a company's activities and relationships, not its revenues or number of employees.  All companies have a responsibility to respect human rights, which requires human rights due diligence; but the resultant company activities will vary depending on the particular context and circumstances.

Some have expressed concern that human rights due diligence is too onerous for small- to medium-sized enterprises (SMEs).  SMEs may have less capacity and more informal processes and management structures than larger companies, which means that their human rights due diligence will take on a different form than that of larger companies.  But SMEs can have significant impacts on human rights; if they were absolved of responsibilities because of size, some might deliberately keep the size of their workforces or annual turnover below any designated threshold.

In fact, compared to larger, complex, globally-dispersed companies, SMEs may find it easier to ensure that commitments are implemented throughout their business, to react quickly to changing conditions, and to develop strong ongoing relationships with the people they affect --  “bricks and mortar” SMEs often have closer ties to their immediate community than corporations based elsewhere.

Questions for discussion:

  • Are the following propositions reasonable?  What is missing?
  • How can expectations for SMEs be articulated without diluting their responsibility to respect human rights?

Propositions:

  • The corporate responsibility to respect human rights applies to all business enterprises regardless of size, industry, region or ownership. 
  • Small- to medium-sized enterprises (SMEs) have a responsibility to respect human rights like every other business enterprise, but their human rights due diligence might look different than that of large corporations.  For example, most SMEs are privately held and therefore not subject to public reporting requirements, but should consider other means of demonstrating that they are meeting their responsibility to respect.
  • SMEs might particularly benefit from simple tools to help them meet their responsibility to respect, as well as government support and partnerships, whether with other companies or nongovernmental organizations, for example.

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Discussion

posted by: JoMo on Wednesday January 6, 2010
Ratings Relevance: 6 0 Agreement: 6 0

One of the key questions is what should be expected of small and medium-sized enterprises? I wonder if there will be a particular output here from the SRSG mandate, as it comes up any national or local convening on business and human rights, in the global South and North?


It would be really interesting to field a spectrum of reactions from smaller companies and business associations about what might be reasonably expected? Particularly interesting will be business sectors or national contexts where SMEs are already moving on human rights related issues - and not just because multinationals are requiring this through their supplier relationships. It seems there might be some interesting examples out there (e.g. women in management in male-dominated societies and industries). Also the particular role national governments can play in enhancing SME capacity here and what incentives (tax and otherwise) might be offered for good practice?

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posted by: Nora Gotzmann on Sunday January 10, 2010
Ratings Relevance: 6 0 Agreement: 2 6

In terms of operationalising the framework I would suggest that industry, region and topic specific case studies and contexts be used as the basis for developing guidance rather than developing guidance that is relevant for all companies everywhere as this might be too general to result in practical changes.

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posted by: hoffstaedter on Wednesday January 20, 2010
Ratings Relevance: 5 0 Agreement: 5 0

It seems to me there are two debates at work here, one pushing for a global norm and UN framework to apply and the other opting for a regional and/or business size model that sees different needs and priorities. Of course both ought to be implemented, a global framework with sufficient flexibility for small and medium businesses as well as regional actors to tailor the protection, respect and remedy framework to specific industries (eg extraction industry) and specific locations with specific needs/issues. The danger always is to create a very demanding UN framework that cannot or will not be operationalised and implemented. Big corporations may find implementation and engegment with human rights easier because they have the resources to do so whilst smaller companies can be more flexible in the actual implementation of programmatic change.

The international conference on the Millennium Development Goals at the Institute for Human Security at La Trobe University in late November last year hosted a range of discussions around these issues and the most vocal were bog corporations who have spent a coniderable amount of time and money on thinking about the MDGs, human rights and their companies' positions. What is needed is to roll out discussions, information sessions and workshops on what smaller companies can, should or even must do in the future. Here larger companies should take the lead and partner up with smaller companies for synergy in good practice.

Business for Millennium Development in Australia has attempted just that and it is vital to bridge the gao between what business is doing and what works (largely unbeknown to others) and what academics, NGOs and other civil society organisations are working towards.

Dr. Gerhard Hoffstaedter
Institute for Human Security, La Trobe University, Australia

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