Perspectives in Responsible Sourcing

Voluntary Business Responsibility Framework Unveiled in India

In 2009, the Indian Ministry of Corporate Affairs took the first step introducing the concept of business responsibility towards society by releasing the voluntary guidelines on CSR.  The refined version of the guidelines was released in July after extensive stakholder consultations. It is titled as the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business.

The business responsibility (BR) framework, as it is called, has been jointly designed by the Indian Institute of Corporate Affairs, a think tank under the ministry, and German-based international enterprise GIZ as part of a bilateral co-operation effort.

The voluntary guidelines have been intended for use by businesses of all sizes operating in the country including multi-national corporations. Businesses have been urged to apply the guiding framework to all actors across their value chain.

To move towards sustainable business ethos, the guidelines recommend that there should be a firm commitment from the top leadership, integration of the business principles into core strategies and policies, strong and continuous engagement with stakeholders and disclosure to all stakeholders.

The BR framework encompasses nine principles with core elements to operationalize each of these principles, including:

1. Businesses should conduct and govern themselves with Ethics, Transparency and Accountability;
2. Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle;
3. Businesses should promote the wellbeing  of all employees;
4. Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized;
5. Businesses should respect and promote human rights;
6. Business should respect, protect, and make efforts to restore the environment;
7. Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner;
8. Businesses should support inclusive growth and equitable development, and
9. Businesses should engage with and provide value to their customers and consumers in a responsible manner.

The fifth principle takes into account the ‘Corporate Responsibility to Respect Human Rights’, as referred in the United Nations framework of “Protect, Respect, Remedy”.

The framework encourages businesses not only incorporate responsible practices into their business model but to communicate these efforts to stakeholders in a transparent manner. Thus, the document includes a chapter on reporting CSR efforts effectively. The reporting framework stresses the fact that by unveiling responsible business practices, companies can more effectively engage with their stakeholders.

Currently the BR framework remains voluntary. It remains to be seen whether the Ministry of Corporate Affairs eventually makes the guidelines mandatory or chooses to incorporates some or all of the principles into policies.

Whistleblowers protected by the European Court of Human Rights

Imagine you worked in a job and things weren’t going well: Management has decided to cut staff and you find it impossible to fulfil your own duties because you’re overburdened. Your colleagues are in the same position. You’ve alerted management and pointed out that the practice is leading to serious quality defects in the service you provide. In fact, you’re no longer providing the service advertised and that clients pay for. However, management does nothing and appears to not care about your concerns. You raise the matter repeatedly until the situation and the services you provide deteriorate so badly, that the only available solution to effect change is to alert the authorities. More specifically, to file a criminal complaint against your employer for fraud because the services your company advertises are not actually being provided. What would you do? Would you risk your job, income, security and speak up?

The question of whistleblowers has hit the media repeatedly in recent years. Cases of employees speaking up and pointing to serious defects within their workplace have put the spotlight back on what kind of protection we afford such people. The US and UK are two examples of countries that have responded by implementing comprehensive protective legislation for employees who blow the whistle. But in most other countries employees still do not have the benefit of protection from the law when they do the ethical thing and speak out against wrong practices that they are witness to. At least in Europe, things might be about to change.

On 21 July the European Court of Human Rights (ECtHR) issued its judgment in the case ofHeinisch v Germany. The facts were those set out above and related to a nursing care home. Following the criminal complaint Mrs Heinisch brought against her employer she was dismissed without notice on the grounds of breaching her duty to loyalty to her employer by publicly damaging its reputation. Finding in favour of Mrs Heinisch, the Court noted that whistleblowing is protected speech under Art. 10 of the European Convention on Human Rights and that the following considerations weighed in favour of Mrs Heinisch:

1. The information she had disclosed was of public interest, particularly because those suffering detriment were probably not in a position where they could speak up.

2. Mrs Heinisch had approached management previously but had never received any indication that a solution would be found.

3. Mrs Heinisch had not knowingly or frivolously reported incorrect information.

4. She had acted in good faith

The German people have reacted with a combination of admiration and bewilderment – admiration for Mrs Heinisch and bewilderment at the law. How can a country that professes to encourage civic courage and ethical business still have a statute on their books that penalizes employees for doing the right thing? The question is a fair one as the Council of Europe issued a Resolution in 2010 recognising the importance of whistleblowing and urging member States to adopt comprehensive legislation to protect whistleblowers, as outlined in the Resolution. Now finally German politicians are stepping up and calling for such legislation to be implemented. It would then be up to other European states to follow suit. Until that happens, whistleblowers in Europe will have to rely on their national courts to apply the Heinisch jurisprudence.

European employers (and those in other countries) should take this judgment seriously and begin to look at their own approach to whistleblowers. Some basic questions to consider are:

• Is there a system in place through which employees can raise concerns, if need be confidentially and anonymously?
• Are concerns raised by employees taken seriously and addressed in a timely and adequate manner?
• Is the process of dealing with concerns transparent to the employee?
• Are policies and procedures in place to ensure that where employees raise concerns they do not experience any form of retaliation, e.g. dismissal, discrimination in employment decisions, etc.?

Businesses should welcome the Heinisch decision. By protecting whistleblowers who denounce unethical and illegal behaviour those businesses abiding by the rules and striving towards ethical practices are in turn given greater protection. And that should be good news!

Sri Lanka: Toward Safe Migration?

The first thing I noticed upon arriving to Sri Lanka was the lack of military checkpoints. As my previous visits all took place during the decades-long civil war, I was seeing peacetime Colombo for the first time. And while peace is a massive accomplishment for any country, there are many challenges that remain for this island nation.

Like many countries in South Asia, Sri Lanka is grappling with the mixed blessings of labor migration, or “pain and gain” as some like to say. While providing critical revenue for the country, migrants face hardships while working overseas and their governments struggle to protect them through a mishmash of policy and diplomatic manuveuring.

Case in point: the entire country is currently riveted to the plight of Rizana Nafeek, a Sri Lankan domestic worker who has been sentenced to death by execution in Saudi Arabia. According to local accounts, Rizana’s identity documents were falsified by a recruiter to allow her to subvert the minimum age requirement for overseas workers; she was just 16 years old when she went abroad to work. In a tragic turn of events, the baby in her care died and she was charged with murder, rather than negligence.

Rizana’s story was on the lips of everyone I spoke with, from the Chairman of the Foreign Employment Bureau (FEB), to the Secretary of the National Workers Congress. Yet Sri Lanka is powerless to stop Saudi Arabia from proceeding with the execution, as Indonesia learned just last month when one of their workers was beheaded in Saudi Arabia without the Indonesian embassy receiving any prior notice.

Partly at issue is the reliance of labor sending countries on migrant remittances to bolster gross domestic product. Although sending countries try to negotiate for improved working conditions and protections for their citizens abroad, the receiving countries hold all the cards. When the Philippines attempted to impose a minimum wage for their domestic workers abroad, Saudi Arabia responded by banning new workers from the Philippines. With more workers deployed to Saudi Arabia than any other country, this puts the Philippines in a difficult position.

During my visit to Sri Lanka, there were indications that the government is trying to do more to protect its workers, including cracking down on illegal recruiters and preparing departing workers for life abroad. During an impromptu tour of the FEB offices, we even saw case officers reviewing contracts with workers about to be sent to work in factories in the Mid-East. While the contracts still were not in the local language, case officers were explaining the terms of the contract with the workers.

It’s more than was being done before, according to local NGO groups. However, such groups are pushing for much more to be done, including engagement by government with civil society, improved governance and strategy on migration policy, more focus on safe migration for workers, as well as development of alternative economic opportunities at home.

It seems that while Sri Lanka is finding the path to improving migrant worker protections, actual implementation remains a challenge. 

Made in Thailand

As I browse through the interminable counters at Bangkok airport displaying colourful souvenirs made in Thailand, I cannot help but wonder who sewed the intricate embroidery on the scarf I’m about to spend my last few Thai Baht on. A heaven for bargain hunters, Bangkok is sprawling with malls and marketplaces selling everything from fake Gucci bags and gold watches to the latest electronic gadgets. As long as you are prepared to negotiate fiercely, you can walk away with some great deals, but your purchases may have come at a price for some. As part of an STR research project on South-South labour migration, I have spent a week in Thailand meeting with local NGOs, trade unions and workers to shed light on some of the challenges faced by migrants in the country.

There are around 1.2 Million migrant workers from Myanmar, Lao and Cambodia officially registered in Thailand and a further 1.2 Million undocumented workers according to International Organisation for Migration estimates. Most of these workers –around 70%– are from Myanmar and work in the construction and fishing industries. However, my research revealed that in reality, most industries using low-skilled labour in Thailand have a large proportion of migrants in their workforce, the majority of whom have entered the country illegally. This is true for the seafood processing, apparel and other manufacturing industries that produce goods for the export markets. Many pay carriers to take them across the border by boat to Mae Sot, in the Tak province where they work in factories for less than 100 Baht a day, well below the minimum wage. Their illegal status makes them more vulnerable to exploitation and many of them face severe human rights violations and work in conditions akin to slavery.

While they might be better off than their undocumented counterparts, documented workers are not sheltered from abuse in the workplace. I met several workers who had had their passports and work permits confiscated by their employer, a common practice in Thailand. Document retention does not only bind migrants to a workplace, it might also get them into trouble with the Thai authorities. If they are stopped by the police and cannot show a valid work permit, migrants may face extortion or arrest. A report published in 2010 by Human Rights Watch paints a depressing picture of the role of the Thai authorities in exploiting migrant workers.

While the outlook may seem bleak for migrant workers in Thailand, the type of issues they face are no different from the ones faced by migrants in other labour receiving countries.  Over the next few months, our team will be travelling to several more countries in Asia and the Middle East to conduct further research on labour sending and receiving countries. Follow me on twitter @Leiloucha92 to find out more about my next destination.