July 31, 2011

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.

Dona John
By Dona John
Jul 31, 2011 9:06:19 AM

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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?<br/> <br/> 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.<br/> <br/> On 21 July the European Court of Human Rights (ECtHR) issued its judgment in the case of Heinisch 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:<br/> <br/> 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.<br/> 2. Mrs Heinisch had approached management previously but had never received any indication that a solution would be found.<br/> 3. Mrs Heinisch had not knowingly or frivolously reported incorrect information.<br/> 4. She had acted in good faith<br/> <br/> 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, the ECtHR’s mother body, issued recommendations in 2009 for its member States to adopt comprehensive legislation to protect whistleblowers. Now finally German politicians are stepping up and calling for such legislation to be implemented.<br/> 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.<br/> <br/> 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:<br/> • Is there a system in place through which employees can raise concerns, if need be confidentially and anonymously?<br/> • Are concerns raised by employees taken seriously and addressed in a timely and adequate manner?<br/> • Is the process of dealing with concerns transparent to the employee?<br/> • 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.?<br/> <br/> 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!<br/>
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