ASSIGNMENT ON

Problems in implementing UN Framework on Business and Human Rights in Indian Organizations

The three pillars of the UN Framework on Business and Human Rights

The state duty to protect against human rights abuses by third parties, including business, through appropriate policies, regulation, and adjudication;

The corporate responsibility to respect human rights, that is, to act with due diligence to avoid infringing on the rights of others and address adverse impacts with which they are involved; and

The need for greater access by victims to effective remedy, both judicial and non-judicial.

The Guiding Principles spell out the implications of the three pillars of the UN Framework for governments, businesses and other stakeholders. They are applicable to all governments and to all businesses in all situations. The Guiding Principles are based on extensive research and consultations with representatives from governments, business, civil society organizations, and legal and academic experts across all continents, and gained broad acceptance and support even before their adoption by the Human Rights Council. The Guiding Principles establish an authoritative global standard on the respective roles of businesses and governments in helping ensure that companies respect human rights in their own operations and through their business relationships.

Problems in implementing UN Framework on Business and Human Rights in Indian Organizations

The Framework provided an authoritative focal point around which the expectations and actions of the various players could converge in this debate business, government, civil society, investors and beyond. At its foundations is good risk management. Here companies should manage three overlapping sets of risks: the first is to the victims of corporate related human rights harm. The second risk is to companies themselves. This has come to be called stakeholder-related risk, or risks stemming from community challenges and resistance to company operations, typically on environmental and human rights grounds. Such risks to companies include delays in design, siting, granting of permits, construction, operation and expected revenues; problematic relations with local labor markets; higher costs for financing, insurance and security; reduced output; collateral impacts such as diverted staff time and reputational hits; and possible

project cancellation, forcing a company to write off its entire investment and forgo the value of its lost reserves, revenues and profits, which can run into several billion dollars in the latter case. The third risk is the systemic fall-out of the first two. It can take the form of populist resistance, like organized local activity with transnational support that fights an entire industry sector. For example, the World Bank came perilously close to getting out of extractive projects a decade ago and the friction still exists. A second form is resource nationalism, which is on the rise everywhere. And the third is gradual decay in the rules, customs and institutions necessary for sustainable markets. History teaches us that markets pose the greatest risksto society and business itselfwhen their scope and power far exceed the reach of the institutional underpinnings that allow them to function smoothly. 1) The normative claim of human rights, i.e. not only civil and political but also social, economic and cultural rights, calls for a clear definition of what we want to understand by the impact of a company, in particular regarding business relations in the supply chain. On a universal basis, however, this definition can hardly be formulated in satisfactory form

2) The basis of the legal claim on which the human rights approach is founded calls for a highly systematic approach, bringing in the perspective of rights-holders. This calls for opportunities for participation by stakeholders, organisational learning, strategic integration into management and the development of standard complaint procedures. Clarification is needed on how this claim is compatible with existing impact assessment procedures and what difficulties are entailed by the right to participation of those concerned.

3) Companies often make the business case for human rights risk analyses, and in principle avoiding human rights infringements is understandably also one way of preserving their reputation; it is also noticeable, however, that e.g. in the environmental field rigorous and successful impact assessments frequently only take place in the presence of clear legal requirements

Conducting appropriate human rights due diligence should help business enterprises address the risk of legal claims against them by showing that they took every reasonable step to avoid involvement with an alleged human rights abuse. However, business enterprises conducting such due diligence should not

assume that, by itself, this would automatically and fully absolve them from liability for causing or contributing to human rights abuses.

Prospects in implementing UN Framework on Business and Human Rights

The Guiding Principles provide practical and concrete recommendations to governments and companies on the policies and processes they may put in place to manage these risks. And in particular for companies, the systems to help integrate respect for human rights throughout the enterprise to help meaningfully prevent and address their involvement in human rights abuse. In this regard, what I recommend is human rights due diligence. It can be incorporated within broader enterprise risk management systems, provided that it goes beyond simply identifying and managing material risks to the company itself, to include risks to rights-holders. The process should include assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating howi mpacts are addressed. And it: (a) Should cover adverse human rights impacts that the business enterprise may cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships; (b) Will vary in complexity with the size of the business enterprise, the risk of severe human rights impacts, and the nature and context of its operations; (c) Should be ongoing, recognizing that the human rights risks may change over time as the business enterprises operations and operating context evolve. Human rights due diligence should be initiated as early as possible in the development of a new activity or relationship, given that human rights risks can be increased or mitigated already at the stage of structuring contracts or other agreements, and may be inherited through mergers or acquisitions.