Can India benefit from a human rights framework for business?
India is yet to put in place a human rights framework for businesses at home
On 26 June 2014, the government made a commitment at the United Nations Human Rights Council (UNHRC), when it voted in favour of a resolution to establish an open-ended inter-governmental working group to negotiate a legally binding international treaty to impose human rights obligations on transnational corporations (TNCs) and other business enterprises.
Even as the second anniversary of the date approaches, India is yet to put in place a human rights framework for businesses at home.
This, despite the UNHRC adopting the UN Guiding Principles on Business and Human Rights on 16 June 2011.
While there is no arguing that the involvement of business in social development is a win-win for business and the community as a whole, and the premise forms the basis of the Corporate Social Responsibility (CSR) Rules, 2014, the ground reality is very different from boardroom analysis of the impact of business operations.
According to the India Responsible Business Index, 2015, developed by Oxfam India, Corporate Responsibility Watch, Praxis and Partners in Change and based on self-reported information of the top 100 BSE companies by market capitalization, it was found that companies rarely recognize or have mechanisms in place to act on human rights violations extending beyond their own employees.
For instance, the index found that of the companies surveyed, 57 do not recognize human rights violations in the supply chain, 42 recognize it as an issue but none of the 100 companies has a mechanism to both recognize and address violations.
“Human rights abuses by business is an almost universal phenomenon, though the nature and extent of violations do vary from country to country. India is no exception. In fact, the Bhopal gas disaster of December 1984 is a living reminder of how the private sector could undermine human rights,” said Surya Deva, associate professor at the School of Law, City University of Hong Kong.
In 2015, he authored a background paper titled ‘India National Framework on Business and Human Rights’ and in March 2016 he was appointed UNHRC’s Asia-Pacific representative of the UN working group on human rights and TNCs.
According to Deva, India has a vast body of legislation for human, labour, environmental and consumer rights as well as for the protection of the rights of women, children, Scheduled Castes and Scheduled Tribes, but “the current regulatory framework is patchy, outdated or cumbersome”. He believes that the existing judicial and non-judicial mechanisms suffer from multiple inadequacies and are unable to provide effective access to justice to communities adversely by corporate activities.
“Rather than doing piecemeal revisions of laws (such as in the areas of labour laws or land acquisition), the Indian government should conduct a holistic assessment of the legal-cum-policy framework to identify what is working and what is not in ensuring that companies respect human rights. Doing so would allow India to come up with a model of economic development that is both sustainable and inclusive,” Deva added.
He will be in New Delhi next week for meetings on the subject with both the central government and corporate entities.
But experts point out that there are a number of challenges to ensuring human rights protection by the business community, even if such a framework is adopted. A major one being the fact that a majority of Indian businesses fall under the informal or unorganized sector.
“It is pertinent to note that much of the law applies to the formal sector that is but a small fraction of the large, predominant informal sector that is mostly outside the purview of legislation. Here, labour and environmental laws are violated with impunity by business especially in the supply chains even of large brands,” said Amita Joseph of New Delhi-based not-for-profit Business and Community Foundation.
Joseph pointed out that while the Companies Act, 2013, does provide a forward-looking statute for aspects such as oversight of boards, directors, auditors and class action suits, and the judiciary has stepped in fairly regularly to liberally interpret rights, “there needs to be a more stringent focus on corporate accountability”.
Voicing similar concerns, Rohan Preece, project manager at Partners in Change, a non-profit working on issues of awareness regarding CSR, said that some existing laws actually permit human rights violations, for example, the law allowing children to work.
“The law permits children as young as 14 to work in a wide range of occupations (except certain occupations that are deemed to be hazardous). This jeopardizes their right to education. And following an astonishingly regressive amendment in 2014, children below the age of 14 can now work in certain settings (such as family businesses). The law pays lip service to the child’s right to education by allowing this only after school hours or during holidays; but this misses the point entirely,” he explained.
Again, not everyone is convinced that a new framework, even if it is an international one, will help the situation in India.
Ravi Rebbapragada, founder of Visakhapatnam-based not-for-profit Samata and now chairperson of the network of organizations Mines, Minerals and People, said, “I do not completely negate the possible benefits of such a mechanism, but strongly feel that laws are on the periphery with so many systemic problems on the ground—like caste, class, awareness and even corruption. We have to deal with these first.”
Deva dismisses the scepticism. “It is critical for the central government to start the dialogue on this issue with state governments, third-tier governance institutions as well as other stakeholders such as not-for-profit organizations and business associations. An inter-ministerial body should perhaps be created at the central government to take the lead on this.”