Thursday 26 May 2016

Business, human rights and income inequality

What role does business have in addressing income inequality?

Does the way in which we now ask this question risk a gradual shift that wrongly pulls the focus away from its proper subject, which is the duties and policies of the regulatory state? 

How did I arrive at these remarks?

1. Very few reasonable people would dispute that income inequality (globally, and within various countries and cities) is a major issue of our time.

2. Very few business leaders would dispute the trend towards greater interest in / scrutiny of the social impact of business practices by social, consumer, market / investor and regulatory stakeholders.

Yet it is not particularly obvious, putting 1 and 2 together as issues, that one aspect of being a responsible business is to take steps to address income inequality -- a highly complex policy puzzle and socio-economic phenomenon (insofar as I understand it myself... ), one not easily fixed by simply appealing, for example, for greater bona fide corporate adherence to national taxation regimes.

At very least, is it not obvious that compliance by business with fundamental human rights standards (or even some fulsome embrace of these norms, beyond mere compliance) would necessarily have any real impact on income inequality.

Approached in terms of the legal standards that comprise the global human rights architecture, sure, there are perhaps some issues for example around wage levels that would differentiate 'employment' from 'servitude'.

I am sure that a case can be made that better performance by business actors on recognised human rights standards might materially improve (narrow) the income inequality margins.

I just do not think that case has been made yet, or properly, or fully.

At very least, I think arguments that put 'business and human rights' and 'income inequality' together are at risk of positioning human rights as some kind of magic policy fix-all, as is often the case. So that we get arguments (in effect) that if one just applied a human rights lens to climate change = fix! (see here). Or if one just looked at income inequality from a business-human rights perspective = fix!

These comments of mine are no doubt full of holes, but are prompted by the otherwise unobjectionable and agreeable remarks of a leading scholar on business and human rights in a recent post in The Conversation: here.

Academics can (and sometimes should) be advocates. Yet they can (and often should) also be nit-picking and devoted to accuracy. In this post I am probably at risk of being seen at best as overly nit-picking, or at worst as an apologist for business.

Instead my only point is the nit-picking one that it hardly seems self-evident that if more businesses ensured their operations did not violate human rights standards (as I understand these in terms of present international law), that this would affect income inequality in a meaningful way.

Income inequality matters -- no doubt. But human rights vocabularies, standards, strategies, lenses, frameworks, etc., are not necessarily the secret to addressing this endemic and worsening issue. Nor necessarily is it the role of business to address that issue, lest we let the state and policymakers off the hook (and inadvertently ascribe far greater social influence to business than is proper or prudent).

The current fashion of focusing on business's own responsibilities can sometimes have that effect. On income inequality, it is ultimately the state that matters, and while we must demand all sorts of things of 21st century business and finance, it is the state first and foremost that has the duties and powers to attempt to address the problem of income inequality.

Jo

See previous more practical, less nit-picking posts on this issue in 2014 and 2015 around the time of Davos with its focus on income inequality: here.

Tuesday 17 May 2016

Human rights, business and end users

We focus on social impact integrity in corporate supply chains, but what about corporate 'responsibility' for the downstream end-use made of a product or service?

I use the term 'responsibility' very broadly -- mostly in relation to 'liability' in the court of public / consumer / market opinion, rather than in any legal sense.

One manifestation of the shifting expectations of business in society is that some brand-conscious firms are paying far more attention to the use to which their products are put, in human rights impact terms. This is in addition to the more familiar concept of the attention to the human rights footprint of the 'upstream' supply chain through which they source components and ingredients for their products.

The sensitivities on this issue vary greatly by sector and firm and context -- this is true of corporate human rights impact generally.

One sector of interest is the pharmaceutical sector in relation to the supply of drugs capable of being used in state-administered lethal injections pursuant to a death penalty order.

Last week global pharma giant Pfizer became the last major firm to announce that it was taking steps to ensure that its products would not be procured for use in lethal injections (at least in the US).

This fell from concerns about the morality, if not the legality, of administering cocktails of drugs that did not always ensure a relatively swift and painless execution.

I blogged on this long-building issue some four years ago in relation to an EU-based firm exporting to the US: see here.

The more interesting question is whether this growing 'end-user due diligence' is capable of wider analogy to other products, or is specific to this issue...

Jo