Business and the Advocacy of Human Rights

Panel 2:

Human rights and how business responds to it

in Indonesia

Seminar hosted by

Indonesia Business Links

Noke Kiroyan

Jakarta, July 13, 2011

2

Current Mainstream Definition of CSR

The commitment of businesses to behave ethically

and to contribute to sustainable economic

development by working with all relevant stakeholders

to improve their lives in ways that are good for business, the sustainable development agenda,

and society at large.

(The World Bank Group, 2008)

• Responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behavior that Contributes to sustainable development,

health and the welfare of society; Takes into account the expectations of

stakeholders; Is in compliance with applicable law and

consistent with international norms of behavior; and

Is integrated throughout the organization and practiced in its relationships.

Social Responsibility in ISO 26000

3(Adapted from “ISO 26000: Guidance on social responsibility ,” November 2010 )

Annex: Examples of voluntary initiatives and tools for social responsibility

Sustainable development

Recognizing social responsibility

Stakeholder identification and engagement

Organizational governance

Related actions and expectations

Human rights

Labor practices

The Environ-

ment

Fair operating practices

Consumer issues

Community involvement/development

Practices for integrating social

responsibility throughout an organization

The relationship of an organization’s

characteristics to SR

Understanding the social responsibility of the organization

Reviewing and improving an organization’s actions and

practices related to SR

Enhancing credibility

regarding SR

Voluntary initiatives for social

responsibility

Communication on social

responsibility

Scope Clause 1Guidance to all types of organization regardless of their size or location

Definition Clause 2Terms, abbreviations and abbrev. Terms

UnderstandingSocial Clause 3ResponsibilityHistory, Characterist-ics, Relationship between SR and Sustnble. Developmnt..

Principles of Social Clause 4Responsibility• Accountability• Transparency• Ethical Behavior• Respect for

stakeholder interests• Respect for rule of

law• Respect for inter-

national norms of behavior

• Respect for human rights

Two fundamental practices of social responsibility

Social resp. core subjects

Integrating social responsibility throughout an organization

Clause 5

Clause 6

Clause 7

Schematic overview of ISO 26000

(Adapted from “ISO 26000: Guidance on social responsibility.” November 2010 )

Bibliography: Authoritative sources and additional guidance

4

5

The UN Global Compact

Labor Standards

3. Freedom of association and recognition of collective bargaining

4. Elimination of forced and compulsory labor

5. Abolition of child labor

6. Elimination of discrimination in employment and occupation

(United Nations, 1999/2000)

Environment

7. Support a pre-cautionary approach to environment

8. Promote greater environmental responsibility

9. Encourage environmentally friendly technologies

Anti Corruption

10.Work against

all forms of

corruption,

including

extortion and

bribery

Human Rights

1. Support and respect protection of human rights

2. Avoid being complicit in human rights abuses

6

The Business Case for Human Rights - Commercial

• Enhanced corporate reputation and brand image

• More secure license to operate

• Improved employee recruitment, retention, motivation

• Diminished employee unrest, increased productivity

• Improved stakeholder relations

• Reduced risk of consumer protest, boycotts, adverse publicity

• Reduced security risks and associated costs – reduced material losses, lower insurance premiums, reduced security forces

• More sustainable relationships with business partners, sub-contractors, suppliers

• Improved risk assessment and management

• Improved investment climate

• Strengthened shareholder confidence

• Competitive advantage over other companies not yet adopting human rights policies

(“Human Rights – is it any of your business?,” - Peter Frankental & Frances House, Amnesty International & The Prince of Wales Business Leaders Forum, 2000)

7

The Business Case for Human Rights - Social

• Strengthening the rule of law through application of international human rights standards

• Strengthening capacity of civil society organizations through dialog and partnership

• Encouraging other domestic and transnational companies in the sector/region to follow example of responsible business practice and corporate leadership

• Increased trust between community groups and company through consultation and partnership activities

• Opportunity for fair representation of different community groups’ views and concerns can strengthen social cohesion

• Decline in social unrest, conflict, violent sabotage

• More stable employment opportunities

• Greater potential for sustainable socio-economic development

(“Human Rights – is it any of your business?,” - Peter Frankental & Frances House, Amnesty International & The Prince of Wales Business Leaders Forum, 2000)

Voluntary policies and actions beyond legal compliance

Mandatory compliance with the laws

Voluntary policies and actions beyond legal compliance

STRATEGY AND COMPETITION

ETHICAL CONDUCT OF BUSINESS

Human rights Initiatives

Anti-corruptioninitiatives

EnvironmentalPolicies

EmploymentPolicies

CommunityDevelopment

TransparencyPolicies

8

COMPANYLAWS

LAWS AND REGULATIONSENVIRON-MENTAL

LAWS

HUMANRIGHTS LAWS

ANTI-CORRUPT-ION LAWS

LABOR LAWS

STOCK-MARKETRULES

Voluntary Policies and Initiatives beyond legal compliance

CSR: Beyond Compliance

9

Non-discriminatory employment practice

Provide safe working environment

Clear guidelines against abusive

behavior

Possible Application of Human Rights

10

Kelian Equatorial Mining

Case Study 1: Mining Company (KEM)

Complaint lodged with National Commission on Human Rights in 1997 set in motion negotiations over a 4-year period ending with an agreement signed by community and company representatives.

11

Case Study 1: “Sweatshops” in Indonesia

“Exploring labour conditions in Indonesia, Harrison and Scorse (2004)conclude that codes of labour conduct, together with anti-sweatshop campaigns, were responsible for increasing wages in export-oriented factories during the 1990s, and moreover, that this was achieved without lessening employment opportunities.”

(“Corporate Responsibility – a Critical Introduction,” - Michael Blowfield & Allan Murray, Oxford University Press, 2008)

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