Human Rights Guidance Tool for the Financial Sector
Human rights issues by topic

Abuse of human rights by host governments

This covers human rights abuses carried out by or on behalf of the government. A company may have a relationship with the government in the region where operations are carried out. Issues to consider include:

  • Any benefits derived (directly or indirectly) from abuses perpetrated by the government may result in the company being perceived as complicit in the abuse
  • In operations with a large footprint involving natural resources there may be potential for government use of forced or bonded labour to extract and realise the resources
  • The violent removal, severe repression or arrest of protestors and resisting indigenous groups by governments or their agents.

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)
  • Ensuring that agreements with host governments reflect the rights of indigenous and local people
  • Transparency in reporting all payments made to host governments, locally and nationally.
See Resources.

Child Labour

There is a high incidence of child labour in many sectors. Issues to consider include:

  • Children working long hours are missing out on educational opportunities
  • They are at high risk of accidents, injuries and chronic health problems and disorders
  • They may have little or no access to basic amenities like healthcare or education
  • Children are vulnerable to trafficking or sexual abuse
  • Conditions may be hazardous for young workers (under 18) who should not be exposed to dangerous equipment, machinery or chemicals.

Additional sector-specific issues are highlighted in 'Human Rights Issues by Sector'


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)
  • Policies and procedures on employment and protection of young workers including prevention and mitigation measures in relation to child labour
  • Ensuring that international standards are met in relation to children and young people.
See Resources.

Forced or Compulsory Labour

This includes any work or service that a person does under the threat of a penalty or where they have not entered voluntarily into an employment contract. Issues to consider include:

  • The use of trafficked labour, where workers are not free to leave their employment and may be living in poor conditions, working very long hours and receiving low or no wages
  • Migrant and immigrant workers can have their travel documents held by the employer as a condition of work. This takes away their freedom of movement and is a form of bonded labour.

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)
  • Policies and procedures on the prohibition of use of forced labour
  • Ensuring that international standards are met in relation to forced labour.
See Resources.

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. Issues to consider include:

  • Fatal and non-fatal incidents and injuries that may have been prevented with
    • appropriate policies and procedures being fully implemented
    • proper training
    • appropriate use of protective clothing and equipment
    • appropriate maintenance and use of tools and equipment
    • information and training for employees
    • proper transportation, storage and use of chemicals
  • Health and safety relating to the use of hazardous materials or machinery, exposure to pollutants, ergonomic issues (eg lifting)
  • Insufficient information and training provision for workers on health and safety issues (or information not provided in languages appropriate to the workforce)
  • Failure to respond adequately to an emergency situation such as an explosion, leakage or other release of dangerous substances into the air, water or ground
  • Complex operations involving a number of sub-contractors may make it more difficult to ensure that health and safety standards are understood and rigorously implemented.

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
  • Regular health checks available to workers.
See Resources.

Impact of migrant population

This covers human rights such as the right to health, adequate standard of living, and non-discrimination that may be threatened due to large influxes of workers. Issues to consider include:

  • Large, mainly male, migrant populations away from their families are a market for prostitution. This can lead to the spread of sexually transmitted diseases (including HIV/Aids) within the area and to families when workers return home
  • Basic health and hygiene standards of housing provided to workers can be poor, leading to illness and the risk of disease being passed on to the local population
  • There can be social conflict and a negative impact on social cohesion.

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
  • Regular health checks available to workers
  • Policies and procedures to ensure that migrant workers are protected and provided with adequate facilities, that local workers are used where possible to reduce the need for migrants and that facilities are provided which enable families to live together.
See Resources.

Livelihood and standard of living

This covers the rights to work, a fair wage and an adequate standard of living. These rights also support the realisation of other rights such as the right to health, housing, participation in the culture of the community, education and the right to a family life. Issues to consider include:

  • Threat to life and livelihoods due to use of land and other resources previously depended on by local populations
  • Relocation of communities away from their traditional means of living
  • Jobs created for migrant workers but not for local people
  • Health and safety impacts on local communities
  • Reduced standard of living due to environmental impacts (such as the use of hazardous substances and materials, water and soil contamination, destruction of habitats and resources, noise associated with airports and roads, and the visual impact of large projects which substantially alter the landscape)
  • Lack of effective security creates health and safety impacts for local communities. These include dangerous sites, equipment or machinery and transport movements. Risks are especially high for children and young people who less aware of dangers
  • Strain on infrastructure and public services due to an influx of workers
  • Transport networks and basic services like health and education may become more difficult for local people to access
  • Damage, reduced access to or loss of cultural, historical or religious sites which form the basis of the identity of communities or indigenous groups.

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)
  • 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
  • Rehabilitation of land disturbed or occupied by operations in accordance with appropriate post-operation land uses
  • Recognition of existing communities' rights, including 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
  • Assessment to evaluate a project's positive and adverse effects on indigenous peoples and examine alternatives where adverse impacts may be significant
  • Emergency response plan to protect affected communities in the event of a major incident such as the release of hazardous materials. This should 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 on conservation and sustainable use of finite resources eg: water, energy, land, which take account of local community need for these resources now and in the future.
See Resources.

Local and indigenous peoples' rights

Projects can impact on ancestral land which is important because of people's cultural heritage and because natural resources are used for medicine, housing, food and clothing. Issues to consider include:

  • The rights and intellectual copyright of indigenous people should be respected
  • Moving populations away from their land may lead to loss of livelihood, resources or assets. This can result in tensions if there is not full consultation and compensation arrangements are inadequate, including the amount and mechanism for distribution
  • Failure to obtain the informed consent of indigenous peoples when using their knowledge and resources to develop commercial products
  • Lack of formal tenure arrangements (with tenure based on historical use rather than documentation) and complex national laws on land rights and land use, can lead to traditional land rights being overlooked and claims that indigenous people's activities are illegal. There may be informal land ownership, or conflict on how land titles are administered (whether formal or informal). Companies should be aware of and respect the special status of local and indigenous populations under international law
  • Lack of free, prior and informed consent of local and indigenous populations and/or lack of process to explore the issues can lead to arbitrary destruction of identity and livelihood
  • Revenues from projects may be channelled by host governments to support the national economy rather than benefitting local or indigenous people
  • Damage or reduced access to cultural and historical sites which form the basis of the identity of local or indigenous groups
  • Alternatives to relocation should be considered (such as alternative sites for the development), particularly where replacement land is not appropriate or available
  • Compensation provided to the community should be based on 'replacement value' and be sufficient to allow an adequate standard of living. This should be issued prior to relocation or before impacts of a development are experienced
  • Communities should be transferred to alternative land with housing which matches or exceeds the previous standard and which allows for the continuation of their livelihood
  • Forced relocations (for example through the use of security forces) should not take place in connection with the development of company activities. This may be carried out by host governments which do not recognise indigenous groups or their rights.

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)
  • 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
  • A stakeholder engagement plan to ensure full and effective consultation with all stakeholders
  • Rehabilitation of land disturbed or occupied by operations in accordance with appropriate post-operation land uses
  • Recognition of existing communities' rights, including 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
  • Assessment to evaluate a project's positive and adverse effects on indigenous peoples and examine alternatives where adverse impacts may be significant
  • Clearly defined procedures on the use of indigenous peoples' knowledge and resources, including payment, benefit-sharing or other consideration
  • Policies and procedures on conservation and sustainable use of finite resources eg: water, energy, land, which take account of local community need for these resources now and in the future.
See Resources.

Revenue transparency and capital flight

There may be corrupt practices or economic disruption within a state. Issues to consider include:

  • Failure by the state to provide basic services to local people
  • Increased cost of essential items such as food
  • Perception that companies are not paying tax due, if revenue is being diverted by governments and is not seen to be benefitting local community.

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
  • Ensuring that agreements with host governments reflect the rights of indigenous and local people
  • Transparency in reporting all payments made to host governments, locally and nationally.
See Resources.

Security of operations

This covers the activities undertaken by a company or their contractors to protect their assets and ensure the safety of their employees. Issues to consider include:

  • If projects are in areas of current or recent conflict, the risk of security problems increases
  • In conflict zones or failing states, there is potential for security contractors to be complicit in fuelling conflict by aiding illegal armed groups, including payment of protection money
  • Security forces may over-react to protests against a project. This can result in an escalation of violence, leading to the injury or death of union members and others exercising their right to protest
  • Security operations should consider the safety of workers beyond the boundaries of the project - when travelling to and from work or in housing facilities
  • Lack of effective security can lead to attacks, theft of dangerous equipment and an unsafe environment for workers
  • Lack of effective security creates health and safety risks for the general public (especially children/young people unaware of the dangers of machinery and equipment).

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)
  • Policies and procedures on security, covering the employment and training of security workers; dealing with violent and non-violent protests; and use of local police force if arrests or detention are necessary
  • Companies should communicate their policies regarding ethical conduct and human rights to security providers, including the need for personnel to receive adequate and effective training
  • Security contractors should be competent and the number of staff deployed should be appropriate and proportional to the need
  • In cases where physical force is used by security, such incidents should be reported to the appropriate authorities and to the company. Where force is used, medical aid should be provided to all injured persons
  • A security contractor should respect the confidentiality of information obtained as a result of its position as a security provider.
See Resources.

Workplace conditions

Workplace conditions include factors such as working hours, wages, health and safety and disciplinary practices. Issues to consider include:

  • See also Health and safety
  • Low wages (which may not meet minimum wage requirements) and working hours which exceed the daily/monthly limits (including involuntary overtime and lack of rest days)
  • Workers fined as a disciplinary practice (for example if damage occurs to equipment)
  • In countries where trade union activity is seen by governments or business as a barrier to economic growth, national laws and norms may be barriers to collective bargaining. In some jurisdictions, trade unions are illegal
  • Migrant workers may be unaware of their rights and how to enforce them or excluded from unions and other structures through discrimination or language differences
  • Migrant workers receiving less payment than local workers, given unpopular shifts and longer hours, and do not have equal opportunities for promotion
  • All workers should be treated fairly with respect to working hours, pay, training, housing conditions and access to health care or education
  • Issues in the supply chain also need to be taken into account, including the use of contractors and sub-contractors.

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)
  • 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
  • Policies and procedures on collective bargaining and recognition of trade unions
  • Policies and procedures on anti-discrimination and equal opportunities, including the protection and welfare of migrant workers.
See Resources.

 

December 2014     United Nations Environment Programme Finance Initiative