August 12, 2019
Part 2 – Human rights violations – how it goes wrong
Human rights violations occur in many forms and contexts, sadly. To better understand how it goes wrong, we need also to look at what goes wrong. Let’s consider a few examples.
Paying the bad guys
An organization pays terrorist organizations to continue operations. A much-publicized case in Syria drew attention to this issue. However, we have worked with a number of clients wanting to avoid and prevent extortive demands from criminal and/or terrorist organizations.
These issues are not limited to the obvious insurgency- and conflict-prone countries and regions. For example, we worked on an extortion case that turned into a drive-by-shooting (when payment was not made) in a South-east Asian country which has a U.S. Department of State travel security rating of “Exercise Normal Precautions”.
By paying-off organized criminals and/or terrorists the organizations perpetuate often acute and severe human rights violations. Murder, torture, rape, trafficking, exploitation, slavery, forced marriage, servitude, forced labor, the list goes on.
Yes, saying no to scary people carries risks, and expecting an underpaid security guard at your factory gate to stand up to committed murderers is unfair and unwise. These issues can be avoided, or at least mitigated, with proper planning, If you’re in, or entering a market where these human rights violations have occurred, or could occur, then you should make sure your ethics & compliance, government relations, CSR, and security teams are talking and working together. More on that in our next post…
Ignorance is no defense
Fashion houses, FMCG retailers, and tech giants (among others) outsource key components of their value chain. Garment manufacturing, aquaculture, fisheries and agriculture, tech component assembly, and business process outsourcing (including content moderation) are well-publicized for their human rights risks and human rights violations. The Global Slavery Index 2018 picked the following products as especially problematic:
There are many legitimate reasons to outsource elements of your value chain, but the onus is on you to know the human cost of those decisions. One of the most common issues we’ve seen organizations struggle to manage is when they didn’t realize or think that their suppliers were subcontracting. It’s not enough to know who your immediate business partner is. You need to know where they get their inputs (products or services).
The other common challenge we’ve seen is a lack of understanding of how your business partner does business. You’re paying them, you have a right to ask. Take the fashion retailer who sourced garments from Asia but barely ever visited the supplier factory. They did not know that (contrary to legal and union requirements) most employees were on temporary contracts and accrued no benefits beyond a below-poverty-line wage, and women routinely miscarried on the factory floor before being fired if they didn’t get back to work (after very brief and unpaid medical leave with no medical insurance). The managers at the factory routinely sexually harassed women, which eventually prompted riots resulting in deaths (the trigger event that forced the retailer to take notice).
Not paying enough attention
You pay people to do a job, so they should do it well. Honestly, is that always the case? We’ve yet to see an organization where everyone is on-message and “lives our values” (a common mantra). That’s not a criticism, it’s human nature. Some of us want more than our current lot. Some of us don’t like our bosses or colleagues. Some of us don’t care much for our jobs.
Faced with this, complacency can be a killer. Not every part of your organization will be operating as you’d wish all the time. We’ve seen reputable organizations using illegal or forced labor, with rampant discrimination and harassment, and working practices that mentally or physically break people. As a general rule, the quietest parts of your organization and the noisiest are good places to start. If everyone in Country X is “moaning”, there might be a reason. Just as, if everyone in Country Y is silent, be afraid. Especially if Country Y is (or was recently) a totalitarian state where speaking-up against authority carries/carried serious risk to life and liberty.
Take the construction contractor who ignored one regional business, as “It was just so profitable, we didn’t think we should mess with that!” The only problem was that trafficked people were being paid derisory wages, kept in policed dormitories, and subject to working conditions (duration, heat, lack of nourishment) that may not have broken the feeble local laws, but certainly broke all boundaries of human decency.
Not asking enough questions
For other organizations, you might be more removed from the blunt end of human rights violations. But you could be exposed to aiding and abetting those benefitting from such suffering.
Take the banks who took deposits in precious stones from no-name ‘businessmen’ (proxies for warlords and a kleptocratic elite). These stones had been illegally mined using forced labor and slaves, where rape (female and male) was the punishment of choice, to keep order. Sometimes these rapes were so savage that the victims bled to death on the jungle floors. The banks meanwhile were in gleaming cities in countries sitting proudly near the top of anti-corruption and anti-money laundering indexes.
We have to hope that the bankers failed to ask enough questions, rather than turned a blind eye. But that is no excuse. Asking questions of someone who you are paying may be more comfortable than asking questions of someone who pays you, but not knowing and not asking is no longer an option.
What’s reasonable to expect of organizations?
This post is intentionally bleak. Human rights violations are bleak and awful. Having seen the suffering at the sharp-end it is not a subject we should dance around. We need to have direct and sometimes uncomfortable conversations, and yes, sometimes lose income or face adversity. Because whatever losses you suffer mean others won’t suffer more.
If you’re expanding into, or sourcing from, markets where the human rights risk is more acute, there is probably a good reason. Is it not, therefore, reasonable to expect that some of the gains from that lower cost-base or emerging profit center are deployed in gathering sufficient intelligence and educating your partners about human rights exposure? If you think you might need support, just ask.