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

Case Studies

April 2014, Bangladesh: Four people were killed and three others were injured when a gas cylinder exploded at a ship-breaking yard in Chittagong. The workers were dismantling a scrap ship. More...

March 2011, India: A radiation scare at a scrap market in Mayapuri, Delhi in which five people were injured was due to disposal of Cobalt-60. Greenpeace said that India needs to put in place standards More...

Utilities and waste management

Utilities and Waste Management includes the following sub-sectors:

  • Electricity transmission, distribution and supply
  • Water supply
  • Sewage treatment works
  • Landfill facilities (hazardous and domestic)
  • Waste incineration
  • Scrap metal and mineral recovery

These industries are often highly regulated, but this is not a guarantee that human rights risks are addressed. Increasing privatisation of formerly state-owned utilities/service provision, including in emerging economies, may be associated with bribery and corruption as private interests compete for contracts.

Electricity generation is covered in Power Generation. The construction of facilities for this sector is covered in Infrastructure.


Key human rights related risks

  • Workforce health and safety during facilities/infrastructure management and maintenance.
  • Access to basic services for vulnerable/poor customers who may be unable to pay their bills.
  • Labour standards and community impact in the supply chain with particular focus on:
    • the sourcing of water treatment materials such as carbon
    • products common to the sector such as meters, piping, cables and personal protective equipment (PPE)
    • use of migrant workers
  • Public health and safety issues relating to inadequate sewage/waste management, power cables, sub-stations, reservoirs and electro-magnetic fields
  • Security arrangements around facilities.

Examples of voluntary and trade initiatives

  • Young Power in Social Action: an NGO working to improve the conditions in shipbreaking yards in Bangladesh to ensure that the rights of workers are respected and that shipbreaking is conducted in a safe and environmentally friendly way
  • The UK Equalities and Human Rights Commission has carried out a review of financial inclusion in relation to utilities.

There are links to these initiatives in Resources.


Core Operations

Health and Safety

The sector maintains and manages facilities and infrastructure that transmit high voltage electricity and use potentially dangerous equipment (such as incinerators), hazardous waste and chemicals. Workers also collect refuse from domestic and commercial premises.

Main issues for the utilities and waste management sector:

  • Fatal and non-fatal incidents caused by lack of proper procedures, failure to follow procedures, inadequate risk assessment, poor risk management, faulty or inappropriate tools, equipment and materials
  • Fatal and non-fatal incidents and injuries which could be prevented with relevant training, information and education of employees delivered in appropriate languages and protective clothing/equipment (PPE)
  • Contraction of diseases among workers due to lack of education, inadequate procedures, lack of PPE
  • Employee exposure to protests, discrimination or abuse from local communities/customers
  • Working excessively long hours under strenuous conditions may lead to accident or injury.

Workplace conditions

Workplace conditions include factors such as working hours, disciplinary practices and discrimination.

Main issues for the utilities and waste management sector:

  • Working hours exceeding the daily/monthly limits and overtime not paid at a higher rate
  • Workers fined as a disciplinary practice (for example if damage occurs to equipment)
  • Migrant workers receiving less payment than local workers, given unpopular shifts and longer hours, and do not have equal opportunities for promotion

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 maintenance of sub-stations, cables, waste facilities and so on with adequate technology, guidance and equipment provided to all workers
  • 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 around anti-discrimination and equal opportunities, including the protection and welfare of migrant workers

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.

Labour rights

This covers workers rights in the supply chain including the use of contracted and agency labour.

Main issues for the utilities and waste management sector:

  • Coal mines and carbon processing plants (for water purification) may employ child or migrant labour. See Mining and Metals for more information
  • The sector is a key customer for suppliers of cabling, piping and meters. Meters in particular can contain components or be compiled in factories where working conditions are harmful and/or that employ child labour
  • The sector is also a large purchaser of personal protective equipment, uniforms, and other products marked with company logos. These items may be produced in factories with poor labour standards in relation to child labour, pay, health and safety standards, treatment of migrant workers and/or forced overtime
  • Sub-contractors and their workers may be subject to degrading/threatening treatment from customers and discrimination against workers from other cultures/races
  • Risk of illegal/migrant workers recruited by sub-contractors

Community impact

Some key supplier facilities impact on local communities.

Main issues for the utilities and waste management sector:

  • Coal mines, carbon processing plants (for water treatment) and power generators can have significant impacts on local communities. See Mining and Metals and Power Generation for more information.

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
  • Health and safety plan communicated to all workers (including contractors and sub-contractors) in their own language and supported by robust governance procedures. Effective health and safety procedures need to be built into contractual arrangements
  • Effective documented procedures to ensure that workers are employed legally by sub-contractors and agencies.

Communities

Community Health and Safety

Sub-stations, reservoirs, landfill and re-cycling sites, incinerators and water/ sewage treatment plants may pose risks for the surrounding environment or communities and for individuals who may come into contact with them or the equipment used.

Main issues for the utilities and waste management sector:

  • Risk (especially for children) of accident/death when inadequate security and warnings are provided around reservoirs, sub-stations, cables and incinerator facilities
  • Landfill, re-cycling and ship-breaking sites may attract groups seeking scrap metals and minerals, food, household goods or waste material for their own use or to sell as a source of income. This may lead to illness and disease, potentially spreading to the local community or exposure to hazardous materials and substances
  • Security arrangements may not recognise the needs of people who live on and around waste sites. This may result in a loss of livelihood or access to basic resources
  • Poor maintenance/repair of sewerage systems may result in disease and illness
  • Electro-magnetic radiation can be considered a risk to communities living close to power lines and sub-stations
  • Emissions from incinerators and fumes from landfill sites may adversely affect local air quality
  • Lack of appropriate signage, education and security during maintenance work, (for example excavation sites for underground piping/cables, particularly when the work takes place near public highways or amenities) can lead to a risk of injury or death.

Property rights and land acquisition

The sector acquires land for sub-stations, pylons, landfill and re-cycling sites, water treatment facilities, sewage plants and reservoirs. Communities may need to be relocated if their current location is to be re-developed for a power generation plant. Their needs may include residential land, land for agriculture, fisheries and traditional employment and land used for community activities.

Main issues for the utilities and waste management sector:

  • Governments may take responsibility for consulting with communities on relocation and ensuring that agreed compensation is paid. Companies involved with a project may be publicly associated with any government poor practice (or perceived poor practice) in this respect
  • Lack of free, prior and informed consent of local and indigenous populations and/or lack of process to explore this can lead to arbitrary destruction of identity and livelihood
  • Forced removal of indigenous groups from lands. This may be carried out by host governments which do not recognise indigenous groups or their rights
  • Lack of, or unfair, compensation, or lack of adequate and appropriate alternative provision
  • Damage to or loss of cultural/historical sites which form the basis of indigenous groups and/or national identity
  • Communities may also be split or separated from neighbouring communities by the development
  • Economic depression after facility closure, particularly in remote areas, due to lack of alternative sources of employment.

Controls and mitigants

  • A stakeholder engagement plan to ensure full and effective consultation with all stakeholders
  • Community awareness and education plan as part of health and safety measures
  • Engagement with community leaders to explore access to landfill and the related safety and security issues, and alternatives for local communities
  • 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
  • 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.

Society and Governments

Vandalism, terrorism and sabotage

Basic infrastructure such as electricity pylons and substations may be targets for vandalism, terrorism or sabotage during construction or when operational. Water supplies may be at risk of being poisoned and contaminated.

Main issues for the utilities and waste management sector:

  • Restrictions on local people's movement or access to facilities, as part of the overall security provision for site
  • Discrimination against some sectors of society due to government views on their likely involvement in terrorism or sabotage
  • Catastrophic damage to the local community, including large scale injury, deaths and damage to community infrastructure and livelihoods in the event of an attack
  • Regional or national loss of life and livelihood due to break in supply of energy. Examples include loss of income due to business closure and shut-down of basic services such as hospitals and schools.

Customers: access to basic services

Electricity, water and waste management services have a direct impact on the living conditions and health of customers. Lack of access to basic services impacts on human rights including the right to an adequate standard of living, the right to health and the right to water.

Main issues for the utilities and waste management sector:

  • If electricity and water bills consume a disproportionate amount of household income, this may lead to debt, poverty, and/or reduction in consumption (which may threaten health and other areas of life)
  • If electricity or water services are cut-off, elderly, young, disabled or ill people are at particular risk
  • In the case of flooding or other natural disasters, issues include disease due to overflowing sewage or contaminated water supplies, and hardship caused by interrupted power supplies
  • Ill health and disease can arise when sewerage and waste management services are not provided. This is most likely to occur in poor areas and in informal settlements.

Corruption and bribery

The sector tends to be highly regulated or part/fully-owned by the state. In some jurisdictions the relationship between the sector and the state may be associated with significant levels of bribery and corruption.

Main issues for the utilities and waste management sector:

  • Taxes and revenues may be diverted from basic services, impacting the realisation of rights such as access to education and health
  • Price may be set and controlled by a regulator, which may limit price sensitivity to the market and transparency around charges. There is potential for over-charging in what may be a monopoly market
  • The development and operation of major utilities projects may be subject to corrupt practice and bribery during planning processes
  • Regulation may mean that utilities providers have a close relationship with government officials, which can give rise to concerns about transparency of taxation, licensing or other payments.

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 there is full and free consultation with local communities
  • Ensuring that agreements with host governments reflect the rights of indigenous and local people
  • Transparency about payments to governments, including licence payments, taxation and other payments
  • Anti-corruption policies which are communicated to all employees, agents and intermediaries.
  • Policies in place to identify and protect vulnerable customers
  • Participation in government or community programmes which provide connection to basic services for poor and informal communities
  • Clear emergency plans in place to deal with the company's role in reacting to and managing large scale incidents.

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

 

December 2014     United Nations Environment Programme Finance Initiative