The Institute for Human Rights and Business (IHRB), a relatively new London-based organization, is attempting to set inclusive benchmarks in coordinating with businesses, government and multilateral agencies, legal experts and NGOs (non-government organizations) for guidelines and practices in the areas that its title refers to. While this is at a nascent stage of conventional wisdom, this column has more than once argued that businesses which acknowledge the pressing convergence of human rights and industry and trade will decrease their potential for legal and financial grief. This holds true for both Indian businesses with global footprints, and global ones with Indian footprints.
As a heads-up for 2010, a few days ago, the institute listed 10 “top” challenges. The key ones are:
• Clarifying responsibilities “beyond borders”. IHRB says “pressure is mounting to lift the corporate veil”.
• Establishing universal criteria for operating in conflict zones. This will prove useful to control both violations of human rights by governments, and the contribution of business to wilfully, or inadvertently, add to, or perpetuate, violations.
• Developing standards for human rights due diligence.
• Protecting migrant workers—in global and local situations.
• Using corporate law to strengthen respect for human rights.
• “Addressing challenges relating to land acquisition and use.” This goes beyond the concept of Eminent Domain to “clearer understandings and good practices around principles such as free, prior and informed consent/consultation”.
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Several of these points are far from being understood in India. Others, such as land acquisition, mark varying degrees of acknowledgement depending on who is doing the acknowledging—less by business and more by those who would hold it accountable.
Recent talk about amending rules related to mining industries in India that seeks to provide sellers of land a 10% stake in the enterprise in addition to the price of land, is a more productive call than ever before, but nowhere close to resolving the issue of compensation in a holistic way. Meanwhile, entities in India might soon find themselves under legal and media pressure to reform, driven by developments and precedents in other parts of the world.
A recent and pressing case is about European commodities company Trafigura AG, which in 2004 picked up cheap contaminated petrol from a Mexican refinery. After cleaning it up, a contractor engaged by Trafigura dumped the slops—toxic petrochemical waste—around Abidjan, the largest city of Côte D’Ivoire, in 2006.
The dumps, according to the government of the West African country, killed several people and made tens of thousands ill. In 2007, Trafigura paid £100 million (around Rs760 crore) to the government for a clean-up without admitting liability. This past year it moved to conclude negotiations in a British court for compensation to 30,000 affected people, an amount approaching £1,000 per person.
A final thought, taking from the flap this past fortnight about what has come to be globally known as the “Bhopal Anniversary”.
I wonder if Dow Chemical Co., which inherited several liabilities of Union Carbide but has steadfastly declined any link with Bhopal, would in 2009 have the courage to put out a clarification with the tonality it did in 2004 (www.dowethics.com). This was in response to an activist, pretending to be a Dow spokesperson, who appeared on the BBC and claimed the company had acknowledged responsibility for Bhopal.
Among other things, the company said: “Dow will not commit any funds to compensate and treat 120,000 Bhopal residents who require lifelong care. The Bhopal victims have already been compensated; many received around $500 (Rs23,350) several years ago, which in India can cover a full year of medical care.
“Dow will not remediate (clean up) the Bhopal plant site. We do understand that UCC (Union Carbide) abandoned thousands of tonnes of toxic chemicals on the site, and that these still contaminate the groundwater which area residents drink. Dow estimates that the Indian government’s recent proposal to commission a study to consider the possibility of proper remediation at some point in the future is fully sufficient.
“Dow shareholders will see no losses, because Dow’s policy towards Bhopal has not changed. Much as we at Dow may care, as human beings, about the victims of the Bhopal catastrophe, we must reiterate that Dow’s sole and unique responsibility is to its shareholders, and Dow cannot do anything that goes against its bottom line unless forced to by law.”
And so, much work is yet to be done.
Sudeep Chakravarti writes on issues related to conflict in South Asia. He is the author of Red Sun: Travels in Naxalite Country. He writes a column alternate Thursdays on conflicts that directly affect business.
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