Human Rights Guidance Tool for the Financial Sector
Human Rights Issues by Sector

Case Studies

August 2014, China: A major IT manufacture has banned two hazardous chemicals from its supply chain. One (benzene) is carcinogenic and the other (n-hexane) can cause nerve damage. More...

April 2011, USA: The Environmental Protection Agency has proposed that manufacturers of PVC plastics should be required to reduce their emissions of vinyl chloride, dioxins and hydrogen chloride. More...

Chemicals and Pharmaceuticals

This diverse sector includes the manufacture of:

Also:

  • paints
  • medicines
  • fertilisers, pesticides and other agrichemicals
  • animal health products
  • pharmaceuticals
  • water treatments materials
  • colouring agents
  • man-made fabrics
  • detergents
  • disinfectants
  • polishes and cleansers
  • cosmetics and toiletries.
  • laundries
  • dry cleaning.

Some products are the basis for other manufacturing activities.


Key human rights related risks

  • Sourcing of raw materials which exploits scarce resources to the disadvantage of local communities
  • Occupational safety and health of workers and local communities
  • Poor working conditions and labour standards in regions with little or no regulation
  • Political and litigious issues resulting from damage claims eg:
    • from individuals or communities affected by land, water or air contamination, through gradual release/leakage or through accident at the company premises or when transporting or storing hazardous products
    • from consumers whose health is adversely affected by product use
  • Health risks from testing and use of pharmaceuticals
  • Trials targeting low income or other vulnerable groups
  • Affordable access to medicines in developing nations
  • Product stewardship - consumer health and safety, product safety and labelling, and responsible marketing
  • Water consumption - depletion of local resource and reduced access for local communities.

Relevant voluntary and trade initiatives

  • The UN office of the High Commissioner for Human Rights has published 'Human Rights Guidelines for Pharmaceutical Companies in relation to Access to Medicines'
  • Responsible Care is the chemical industry's initiative to improve health, safety and environmental performance, and open and transparent communication with stakeholders.

There are links to these initiatives in Resources.


Core Operations

Health and Safety

Companies need to be aware of the risks to health and safety and take appropriate steps to avoid accidents and limit their consequences.

Main issues for the chemicals and pharmaceuticals sector:

  • Health and safety relating to the use of hazardous materials including short and long-term risks to health
  • Other health and safety issues including dust, noise, unguarded machinery and ergonomic issues (eg lifting)
  • Accidents at work with potentially severe consequences, eg: risk of explosion of volatile materials
  • Insufficient information and training for workers on health and safety issues
  • Information not provided in languages used by the workforce
  • Protests against the use of animals in testing products may impact on the safety and security of workers.

Child Labour and young workers

Exposure to chemicals can be particularly hazardous for young workers.

Main issues for the chemicals and pharmaceuticals sector:

  • Children working long hours and missing out on educational opportunities
  • Potentially hazardous conditions for young workers (under 18) who should not be exposed to dangerous equipment, machinery or chemicals.

Development, testing and use of products

Companies are responsible for the impacts their products have when they are being developed and tested and when they are being used. However, it is difficult for a company to deal with deliberate misuse of its products once they have been sold.

Main issues for the chemicals and pharmaceuticals sector:

  • Testing conducted without the informed consent of those taking part. (Taking into account:
    • motivation for participating, particularly in poor or vulnerable communities
    • the tone and content of company communications
    • the provision of clear information about potential short and long-term side effects.)
  • Testing conducted without due regard for the health and safety of participants
  • Failure to apply internationally accepted standards when developing and testing potentially hazardous products in regions where laws or accepted standards may be lax or not applied
  • Potential misuse of products for purposes not planned or condoned by their designers, manufacturers and distributors (eg: medicines used for torture; inhalation of glues and solvents).

Responsible marketing and freedom of information

Depending upon the product, there may be inherent risks of damage to health for consumers. Health risks should be clearly and simply displayed on the product or in information connected to the product.

Main issues for the chemicals and pharmaceuticals sector:

  • Lack of appropriate and comprehensive product information, preventing consumers from making an informed choice
  • Health risks of products inadequately explained in literature, labelling or advertisements
  • Inadequate response to unforeseen product related crises eg: when a product already taken to market is found to have serious health implications
  • Limited access to products due to cost, lack of availability or patent disputes may result in cheaper, less safe versions being developed and marketed.

Controls and mitigants

  • Compliance with local/national law is the starting point
  • Even if local/national law, standards or enforcement are lower than internationally accepted good practice, a company should apply the same consistent and effective management practices globally (on workforce, community health and safety, supplier screening, site safety and security)
  • Health and safety plan communicated to all workers in their own language and supported by robust governance procedures
  • Emergency preparedness/accident response plan to ensure safety of workers in the event of a major incident and to limit the effects of the incident as far as possible
  • Policies and procedures on employment and protection of young workers including prevention and mitigation measures in relation to child labour
  • Explicit policies and procedures covering the health and safety aspects of human testing, including comprehensive communication of the potential risks to participants (in their own language), compliance with regulation, and payment details
  • Product development strategy and risk management plan with appropriate and consistent parameters around safe use and disposal of hazardous materials. These should comply with local and national law but also meet internationally accepted standards. Companies should not seek to benefit from lax local regulation by not applying standards which are routinely required elsewhere
  • Provision of detailed information about correct product use (including any risks involved) and documented assurance that reasonable steps are taken to ensure that products are not made available to those likely to misuse them
  • Emergency response plan in the event of product recall on health and safety grounds.

Supply Chain

Companies face human rights issues and risks in their supply chain, as purchasers of goods and services from other companies/sub-contractors which may be associated with poor practice or controversy.

Sourcing raw materials

Sourcing of raw materials (including metals, minerals or product ingredients) from regions where there is conflict can give rise to risks.

Main issues for the chemicals and pharmaceuticals sector:

  • the safety and security of workers involved in extracting or producing the materials
  • the provision of support (directly or indirectly) for illegal or oppressive armed conflict.

Transport and storage of materials

Transporting hazardous materials is risky

Main issues for the chemicals and pharmaceuticals sector:

  • Failure to ensure safety and security of transport and storage of hazardous materials at all stages in the production process.

Indigenous peoples' rights

The rights and intellectual copyright of indigenous people should be respected

Main issues for the chemicals and pharmaceuticals sector:

  • Failure to obtain the free, prior and informed consent of indigenous peoples when using their knowledge and resources to develop commercial pharmaceutical products.

Controls and mitigants

  • Ethical and environmental supplier screening policy covering labour relations issues, sustainable/ethical sourcing of materials and transparency/bribery. Suppliers should be aware of potential hazards and have systems in place to protect workers and communities
  • Clearly defined procedures around use of indigenous peoples' knowledge and resources, including payment, benefit-sharing or other consideration
  • Transport and storage risk management plans for handling hazardous materials, including training of drivers and other workers and action to increase local community awareness of risks
  • Site security plans which ensure that appropriate security measures are in place, specifying measures to be taken in the event of a major incident. For example, providing an emergency water supply to local community if usual sources are contaminated.

Communities

Health and Safety

Local people may be exposed to risks

Main issues for the chemicals and pharmaceuticals sector:

  • Storage and transport of hazardous materials may pose risks for local communities if inadequate standards are applied, leading to damage to health or the local environment
  • Natural resources may be contaminated by waste disposal and pollution. This may lead to damage to people's health through contamination of the food chain or water supplies.

Exploitation of resources

Local people may be disadvantaged by large scale use of resources

Main issues for the chemicals and pharmaceuticals sector:

  • Requirement for access to natural ingredients to produce pharmaceutical products may create tensions in the community and damage relationships with indigenous peoples
  • Access to water, energy and land for product manufacture may impact adversely on the community.

Relocation of communities

Moving populations away from their land for product or site development may lead to loss of livelihood, resources or assets

Main issues for the chemicals and pharmaceuticals sector:

  • This can result in tensions if there is not full consultation and compensation arrangements are inadequate, including the amount and mechanism for distribution.

Major incident management

Companies need to respond appropriately to major incidents

Main issues for the chemicals and pharmaceuticals sector:

  • Failure to respond adequately to an emergency situation eg: major explosion, leakage or other release of dangerous substances into the air, water or ground.

Controls and mitigants

  • A stakeholder engagement plan to ensure full and effective consultation with all stakeholders
  • A community awareness and education plan as part of health and safety measures
  • Emergency response plan to protect affected communities in the event of a major incident such as the release of hazardous materials. This would include the provision of emergency water and food supplies to local community if usual sources are contaminated
  • Clearly defined procedures on the use of indigenous peoples' knowledge and resources, including payment, benefit-sharing or other consideration
  • Policies and procedures to conserve finite resources, including water, energy and land, which take account of local community need for these resources now and in the future
  • Policies and procedures to ensure free, prior and informed consent of local and indigenous communities; ensuring that vulnerable groups are part of the consultation process and including a complaints mechanism for local communities
  • Policy and procedures on the relocation of communities, including measures around consultation, prompt and adequate compensation and continuation of livelihoods
  • Policies and procedures on the conservation of cultural, historical or religious sites which form the basis of the identity of local and/or indigenous groups.

Society and Governments

Standards of operation in different jurisdictions

National and local standards may fall short of international good practice, in terms of the testing and use/misuse of products.

Main issues for the chemicals and pharmaceuticals sector:

  • Failure to apply acceptable management and policy standards where these are not required under local law
  • Potential in extreme cases for products or testing procedures to be used by local or national authorities for political reasons to abuse human rights (eg using chemical or pharmaceutical products for torture)
  • Potential for products to be used by illegal organisations.

Access to medicines

People in developing countries may find it hard to access medicines.

Main issues for the chemicals and pharmaceuticals sector:

  • High prices and the restrictive affect of patents limit access to medicines for people in poorer countries
  • Lack of investment in diseases endemic in poorer countries such as malaria and tuberculosis

Controls and mitigants

  • Compliance with local/national law is the starting point
  • Even if local/national law, standards or enforcement are lower than internationally accepted good practice, a company should apply the same consistent and effective management practices globally
  • Development of systems to ensure traceability of products and awareness of customers and their product needs
  • Partnerships or engagement with host governments and/or other agencies to facilitate low cost access to products such as medicines where there is significant social need.

See also the broader UNEP FI Environmental and Social Risk Briefing as well as Resources.

 

December 2014     United Nations Environment Programme Finance Initiative