Identifying the human rights issues and expectations relevant to business
(based on internationally recognised standards and voluntary initiatives)
Companies may require links with governments and regulators to conduct their business operations. The closer the relationship is with a state, the more likely it is that the company may be perceived as associated with a government's actions (or failure to act) which result in human rights abuses.
If a multinational company is operating in a country where there is ongoing conflict, even if the company is not situated in the zone of conflict, it may be seen to be associated with human rights violations. In some circumstances, the company may be forced to withdraw from the region due to growing pressure in its home country to disengage or risks of financial disincentives to remain in country.
A company may wish to enter a new market in a country where conflict is likely or where there has been recent conflict. This may raise issues about the stability of government, the provision of essential services and infrastructure, and the role of security professionals. There may also be heightened potential for human rights abuses to occur, but conversely there may also be opportunities to contribute to the development or re-development of the country.
Bribes, excessive hospitality, and facilitation payments may be "business as usual" in some regions. In accordance with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, bribing or complicity in bribing a foreign public official should be a crime in the countries that have ratified it.
Other relevant instruments on bribery and corruption include the United Nations Convention against Corruption, and the International Chamber of Commerce Rules of Conduct and Recommendations for Combating Extortion and Bribery. The USA Foreign Corrupt Practices Act 1977 and the UK Bribery Act 2010 are examples of strong national and extraterritorial legislation.
In some countries, there is concern that taxes are not used to provide basic services such as education and health to local communities. In such cases, companies may be perceived as complicit in corruption. Greater transparency over revenue flows between companies and governments would enhance accountability. A second important issue is that banks may act as a channel for illegal transactions within and between countries. Failure to be alert to this risk and ask appropriate questions can make it easier for illegal actors to conduct their business.
To access particular markets companies may be required to obtain an agreement from the state government to operate in the country. Proximity to states with poor human rights records can result in reputational and complicity risks for the company.
December 2014 United Nations Environment Programme Finance Initiative