Towards an Australian National Action Plan on Business & Human Rights: Business Roundtables Summary

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1 Twards an Australian Natinal Actin Plan n Business & Human Rights: Business Rundtables Summary The Glbal Cmpact Netwrk Australia (GCNA) and Department f Freign Affairs and Trade (DFAT) cnvened business rundtables in May and June 2016 t cnsider the develpment f an Australian Natinal Actin Plan n Business and Human Rights. The Australian Gvernment has made a vluntary cmmitment t undertake a natinal cnsultatin n the implementatin f the UN Guiding Principles n Business and Human Rights during The develpment f a Natinal Actin Plan is ne way t further implementatin f the UN Guiding Principles. Rundtables were held in Sydney, Melburne and Perth, with the primary aim f intrducing Australian businesses t the cncept f Natinal Actin Plans n Business and Human Rights. The rundtables als prvided an pprtunity t discuss key human rights challenges facing Australian businesses and explre initial views n ptential gaps that an Australian Natinal Actin Plan culd fill and the cnsultatin prcess fr any such plan. 80 business representatives participated frm a range f sectrs including retail, FMCG, fd and agriculture, manufacturing, banking and finance, insurance, lgistics, technlgy, pharmaceuticals, technlgy and extractives. This summary reprt utlines highlights frm the discussins, in keeping with the Chatham Huse rule f nnattributin under which the rundtables were held. This summary des nt necessarily represent the GCNA s, DFAT s r any participating business views. Cntext Natinal Actin Plans arund the wrld There is grwing mmentum arund Natinal Actin Plans (NAPs) fr the implementatin f the UN Guiding Principles n Business and Human Rights (UNGPs). T date, ten cuntries have launched NAPs (including the UK), and 26 thers are in the prcess f develping ne (including the US). There has been grwing pressure n, and encuragement f, the Australian Gvernment including frm ther gvernments, NGOs, business and the brader internatinal cmmunity t d the same. Traditinally, NAPs prvide a way fr gvernments t set ut their expectatins f business in relatin t respecting human rights at hme and abrad, prvide clarity n the rle f different gvernment actrs in supprting business and ther stakehlders and as the name suggests, set ut a plan fr further actins which may help the gvernment t fill any current implementatin gaps regarding the UNGPs. NAPs launched t date have included a range f bth regulatry and nn-regulatry measures (e.g. strengthening reprting bligatins, awareness raising, develping tls and guidance, supprting crprate respnsibility initiatives, gvernment prcurement cmmitments and supprting access t judicial and nn-judicial grievance mechanisms). Australian Gvernment perspective Earlier this year, the Australian Gvernment made a vluntary cmmitment t cnduct natinal cnsultatins n implementatin f the UNGPs. (It was nted, thugh, that further cmmitments have nt yet been cnsidered by the Gvernment.) At this stage, DFAT has five pririty issues fr cnsideratin: First, the Gvernment s bjective is that Australian cmpanies embed human rights cnsideratins int their cre business practices s that they are better equipped t manage risk, have greater clarity abut hw plicies and laws apply, can gain better access t stable glbal value chains, are cmpeting n a level planning field, and are able t prmte the Australian brand as ethical, transparent and respectful f human rights wherever they perate. Secnd, t help achieve this bjective, the Gvernment cnsiders its cre rle as being t help raise awareness f business and human rights issues, t cnvey its expectatins and plicy psitins, and t prvide clearer directin and, where relevant, plicy and legislative certainty t businesses n their human rights bligatins. 29 July

2 Third, the Gvernment has examined ther cuntries experience in implementing the UNGPs, including their experience in relatin t natinal baseline assessments, stakehlder cnsultatins and NAPs. Furth, the Gvernment recgnises the imprtance f cnsidering the impacts f wrk in this area n small and medium enterprises (SMEs), which may ften nt be as well placed as large and multinatinal cmpanies t understand and address their respnsibilities. Fifth, acknwledging that business and human rights is imprtant in the dmestic cntext, it is als necessary t cnsider hw any wrk in this area relates t Australian businesses verseas activities. Business and human rights is already an imprtant part f the Gvernment s internatinal human rights agenda, including in relatin t Indigenus rights, wmen s empwerment, human trafficking and slavery. It s als clsely linked t ur multi-lateral, reginal and bilateral effrts t advance human rights, including Australia s current United Natins Human Rights Cuncil bid. A number f like-minded cuntries have develped r are develping NAPs. The Gvernment can see gd arguments fr this idea, but whether a NAP is ultimately pursued has nt yet been decided, and cnsideratin will be given in the cnsultatins as t whether a NAP is the right vehicle fr driving business respect fr human rights. In terms f prcess, the Gvernment is giving cnsideratin t undertaking a Natinal Baseline Assessment, and t establishing a multi-stakehlder advisry grup which wuld be anticipated t be agreed by the Freign Minister. Discussin General There was general supprt frm business representatives fr the develpment f a NAP. It was cnsidered f benefit t have a clear statement f the Australian Gvernment s expectatins f business in relatin t human rights bth at hme and abrad. This wuld assist in driving internal engagement, cmmitment and actin. It culd als assist in mre cnsistent expectatins by ther stakehlders which wuld help business t mre effectively engage with these grups including NGOs and investrs. A NAP culd als help Australian businesses (including subsidiaries f multinatinals) demnstrate that they are meeting glbal standards and expectatins, with the ability t pint t the NAP as an example f why they have already develped r may be develping plicies and prcesses arund human rights. Any NAP shuld clearly highlight the business case fr respecting and supprting human rights. It is anticipated that a NAP wuld als strengthen the business case, by emphasising Gvernment expectatins. Participants nted risks assciated with impsing reprting requirements n business that are nt cnsistent with existing internatinal / natinal reprting bligatins and standards and which may nt meet a clear infrmatin need f key stakehlders. An example given was that if Australia was t develp a requirement arund supply chain transparency it shuld be cnsistent with the UK Mdern Slavery Act requirements given cmpanies may be subject t bth laws. There is need fr effective cnsultatin t have a strng understanding f the type and frmat f infrmatin stakehlders are seeking and the impact that reprting may have n implementatin including a diversin f resurces. The Australian Gvernment needs t be a rle mdel in relatin t business and human rights (e.g. thrugh prcurement prcesses) and build Australia s internatinal reputatin arund human rights issues. Further, a whle f gvernment apprach is required. In additin, any NAP must be prperly funded ver the lng term. In develping a NAP, the Australian Gvernment shuld aim fr cnsistency with ther business and human rights initiatives and ther cuntries NAPs, s as nt t create cnflicting expectatins f business. A NAP wuld need t take int accunt existing gvernment initiatives (e.g. arund Indigenus engagement, wrkplace rights) and vluntary activities being undertaken by business (including reprting), s as nt t duplicate r reinvent the wheel but fcus n gaps. 29 July

3 Australian dmestic cntext A range f human rights issues were identified as relevant t businesses in the dmestic Australian cntext, including Indigenus rights, health and safety, gender equality, disability and labur rights in supply chains. Hwever, businesses d nt generally use the language f human rights in cnsidering these issues, particularly in the dmestic cntext. This can pse a challenge t engaging businesses perating primarily in Australia in the business and human rights discussin. That said, ther stakehlders including NGOs and investrs are using human rights language, and s Australian businesses are increasingly expected t be able t use that language as well. Anther challenge t mainstreaming human rights in business within Australia is that the business case is nt always apparent, as many investrs and cnsumers still d nt take business human rights plicies, prcesses and perfrmance int accunt in their decisin-making. (While investrs are getting mre interested in human rights issues, they are generally still nt asking the tugh questins arund human rights risk management.) Further, while there can be a negative reputatinal impact if smething ges wrng, there is nt necessarily an bvius psitive financial impact fr taking steps t prevent human rights abuses. This is even mre the case fr SMEs. Indigenus rights were identified as a critical human rights issue fr Australia, with businesses nting Australia s internatinal reputatin n the issue, and the significant rle fr gvernment in supprting imprvements in this area. The pprtunity fr business t have a significant psitive impact n Indigenus rights, including in relatin t ecnmic empwerment, was highlighted. Ptential pprtunities fr a NAP may include: Cntributing t greater enfrcement f existing Australian legislatin relating t human rights including arund labur hire, privacy and ccupatinal health and safety which may include better resurcing f investigative and enfrcement mechanisms. Demystifying human rights fr business and cnverting the cncept f human rights int tangible utcmes and benefits, including explaining what human rights mean fr business in the dmestic Australian cntext. Explring ways f incentivising Australian businesses, especially thse perating slely in Australia, t be mre practive n human rights issues. Leveraging the ASX Crprate Gvernance Principles and Recmmendatins, including elabrating expectatins arund what these require in terms f human rights issues (nting Recmmendatin 7.4, that a listed entity shuld disclse material expsure t ecnmic, envirnmental and scial sustainability risks (with reference t the UN Glbal Cmpact s principles, including human rights) and hw it manages r intends t manage thse risks). Empwering business t be mre practive n human rights issues thrugh guidance, tlkits and training. Fr example, a simple radmap fr businesses that are new t human rights wuld be useful. Establishing an Australian business and human rights hub (e.g. building n the GCNA s Human Rights Leadership Grup). Highlighting ways that businesses can have a psitive impact n human rights (in additin t preventing and addressing negative impacts), with Indigenus rights being suggested as an example, and ptentially elabrating cnnectins between the business and human rights and sustainable develpment agendas. Raising awareness and capacity arund business and human rights in the business cmmunity (including SMEs) and the brader public. High risk jurisdictins Australian businesses perating in jurisdictins with issues f cnflict r weak gvernance face heightened human rights risks and particular challenges in implementing the UNGPs. This includes ptential invlvement in severe human rights impacts based n their scale, scpe and irremediable character, impacts which the UNGPs explain shuld be priritised fr preventin and remediatin. This is a challenge fr all businesses, but can be particularly difficult fr smaller Australian businesses t whm it is nt always clear what their behaviur shuld be r the plicies and prcesses they need t have in place t meet the requisite standard. The links between human rights and ther issues, such as crruptin, were als nted. 29 July

4 A particular challenge raised was arund security and human rights. It was nted that hst gvernments d nt always implement the Vluntary Principles n Security and Human Rights (VPs) cnsistently. Businesses taking practive steps t avid abuse (e.g. ensuring security persnnel d nt carry weapns) are ften mre f a target because they d uphld human rights, which in turn can put their persnnel in mre danger. T supprt businesses in respecting human rights, hst gvernments need t be prviding prperly trained security frces and maintaining the rule f law. Australia jining the VPs was a psitive develpment and there is a cntinuing rle it culd play in supprting business including by prviding in-cuntry assistance including arund risk identificatin and guidance arund liaisn with hst gvernments. When it cmes t wrking in high-risk jurisdictins, businesses value dialgue and sharing knwledge and experience with ther businesses, including thrugh Glbal Cmpact netwrks. There are pprtunities fr awareness-raising within business f existing resurces n business and human rights, such as thse prduced by the Australian Human Rights Cmmissin, Business and Human Rights Resurce Centre and UN Glbal Cmpact. They als find it useful t be able t tap int and get supprt frm ther respnsible business initiatives n the grund. Interactins with DFAT / Australian Missins verseas were als useful fr businesses in understanding lcal cntexts and managing risks. It was suggested that Australia is playing catch up in a few areas, including business and human rights and bribery/crruptin. It is helpful t businesses if their hme gvernment sets strng grund rules and there was general agreement that a NAP culd apprpriately signpst the Gvernment s expectatins f Australian businesses in respecting human rights abrad. An example given was the UK legal psitin n facilitatin payments, which many Australian businesses have incrprated int plicies. Hwever, this can cause awkward discussins where peple request a facilitatin payment and when refused, ask why an Australian business is fllwing the UK legal psitin rather than the psitin f their hme gvernment which allws such payments. It was preferable t help avid these cnversatins arising in the first place because peple knw they are dealing with an Australian business fllwing Australian Gvernment plicy r legislatin. A NAP culd prvide the standard that Australian businesses can pint t as supprt fr their plicies in internatinal interactins. There is als a need t raise the perfrmance f thse businesses lagging behind whse lwer perfrmance causes challenges fr businesses ding the right thing, including where they may be wrking tgether thrugh partnerships. It wuld be helpful t better understand whether these businesses are lagging behind because f lack f will, capacity r a cmbinatin f the tw. Further guidance is required fr SMEs which may be perating verseas and may nt be aware f their bligatins in relatin f human rights and/r which may nt have as much capacity t put in place the requisite plicies and prcesses t fulfil them. Ptential pprtunities fr a NAP may include: A clear statement f the Australian Gvernment s expectatin f businesses in relatin t respecting human rights abrad, including wrking in high risk gegraphies. Australian Gvernment supprt t build the capacity f ther gvernments in cnflict-affected and weak gvernance jurisdictins t put the right framewrks in place, ptentially with a fcus n the Ind-Pacific regin. Cntinued supprt f Australian businesses perating in r entering ther jurisdictins thugh DFAT / Australian Missins, t help businesses understand lcal cntexts and manage risks including in relatin t human rights. The Australian Gvernment culd als help Australian businesses engage with ther gvernments, e.g. arund public security. Supprt fr Glbal Cmpact netwrks and ther respnsible business initiatives in Australia and verseas, which prvide platfrms and safe spaces fr business t build their capacity t understand and manage their human rights risks. (Myanmar and PNG-based initiatives were specifically mentined.) Develpment f a hub t help navigate the myriad existing tls and resurces available. Actins t apprpriately engage thse business lagging behind. Strategies t better understand and help manage challenges facing SMEs. 29 July

5 Supply chains Ensuring respect fr human rights in supply chains remains a key challenge fr businesses acrss sectrs, and an area f increasing public and stakehlder scrutiny. Businesses cntinue t find it difficult t get visibility and exert influence beynd their Tier 1 suppliers. Audits are als nt always effective, with sme suppliers circumventing the audit prcess. Suppliers, particularly SME suppliers, are ften nt familiar with human rights expectatins r language, and simple tls and guidance that translate human rights cncepts fr suppliers culd be useful. In the Australian dmestic cntext, there are specific challenges in relatin t labur hire cntractrs nt cmplying with laws and regulatins and cncerns abut insufficient resurcing fr enfrcement. In terms f leverage, it was nted that businesses d nt always have the leverage that ther stakehlders think that they have and there wuld be value in further multi-stakehlder dialgue t clarify hw expectatins may play ut n the grund. Further, where a negative human rights impact is directly linked t an Australian business thrugh a supply chain r ther business relatinship, attempts t intervene by the Australian business, particularly in verseas cntexts, can smetimes be cunter-prductive and even wrsen a situatin. There are a large number f standards and certificatin schemes ut there, and it can be difficult fr businesses t navigate these. Any wrk including supply chain elements in a NAP shuld take accunt f existing wrk including the Attrney- General s Department s Supply Chains Wrking Grup. Ptential pprtunities fr a NAP may include: As nted abve, cntributing t greater enfrcement f existing Australian legislatin relating t human rights, e.g. arund labur hire (including in the fd and agriculture sectr), which may include better resurcing f investigative and enfrcement mechanisms. Setting a high standard by further embedding human rights in gvernment prcurement prcesses. Intrducing an accreditatin system fr labur hire cntractrs. Prviding additinal guidance, tlkits and supprt, e.g. simple guidance and tls targeted t lcal/sme suppliers, and examples f gd practice. Cnvening and supprting multi-stakehlder dialgues, which can help businesses and NGOs understand each ther s psitins including arund cmplex business relatinships. SMEs SMEs are a significant part f the Australian ecnmy, but there were cncerns that they are nt sufficiently engaged in the business and human rights discussin. SMEs may nt have the resurces t unpack their human rights respnsibilities, and als ften lack the capacity (e.g. time r ther resurces) t systematically meet their respnsibilities. It was recgnised, thugh, that there are SMEs ding gd wrk in relatin t human rights, including thse that may be addressing their respnsibilities but may nt be using human rights language t describe their wrk. It is imprtant that SMEs are part f the cnversatin, and that their capacity t understand and manage human rights issues is develped, bth because f their wn respnsibility t respect human rights and because this is integral t ensuring respect fr human rights thrugh larger businesses supply chains. Ptential pprtunities fr a NAP may include: Raising awareness f the relevance f human rights and their respnsibilities amng SMEs. Develping specific guidance and tlkits targeted at SMEs including using r building n existing resurces, such as thse arund wrkplace discriminatin created by the Australian Human Rights Cmmissin. Supprting larger cmpanies t build the human rights capacity f the SMEs in their supply chains. 29 July

6 Stakehlder relatinships Engagement with stakehlders including NGOs arund human rights issues is incredibly valuable fr businesses in understanding and mitigating human rights risks and addressing adverse impacts. Hwever, business-ngo relatinships are nt always as prductive as they culd be with imprved engagement needed n all sides. At the same time, it was nted by business that they and NGOs are fundamentally aligned in their interest in preventing adverse human rights impacts. There is a rle fr gvernment as a bridge-builder between different stakehlder grups. In additin t the NGO cmmunity, investrs are als a key stakehlder grup. Gvernment als needs t be a rle mdel and shw the value f transparent and rbust multi-stakehlder engagement. Ptential pprtunities fr a NAP may include: Cnvening different stakehlders arund business and human rights issues and facilitating engagement and cllabratin. Remedy The respnsibility f businesses t enable the remediatin f any adverse human rights impacts which they identify that they have caused r cntributed t, r t play a rle in remediatin fr impact which are directly linked t them r their prducts/services, was nted. Varius nn-judicial mechanisms fr addressing grievances were discussed, including the Australian Human Rights Cmmissin and OECD Natinal Cntact Pint. It was suggested there is ften a need fr shared respnsibility fr reslving issues, as it is ften nt pssible fr a single business t remedy systemic issues. Instead, cllabratin between businesses, gvernment, unins, NGOs and thers are needed. Gvernment can help facilitate this. The Australian Gvernment culd prvide assistance and supprt t Australian businesses seeking t address negative impacts, particularly verseas, but greater clarificatin f the Gvernment s rle is needed. Ptential pprtunities fr a NAP may include: Clarifying hw the Australian Gvernment can assist businesses in addressing adverse human rights impacts, including thrugh DFAT / Australian Missins verseas. Raising awareness f the mechanisms available fr reslving grievances, bth verseas and in Australia. Explring with all stakehlders whether Australia s OECD Natinal Cntact Pint is functining effectively as a channel fr reslving issues. Cnvening different stakehlders and facilitating engagement and cllabratin. Prcess f develping a NAP The prcess f develping a NAP is as imprtant as any final dcument. It is imprtant that the Gvernment is very clear n its cnsultatin prcess, and shuld set this ut in a public dcument up-frnt. The Gvernment als needs t put sufficient resurces behind a rbust cnsultatin prcess. There was general supprt fr the idea f a Natinal Baseline Assessment (NBA), t ensure any NAP des nt duplicate existing initiatives r d wrk where it is nt needed, but is targeted t fill gaps. Any NBA shuld incrprate businesses vluntary actins including cllective and multi-stakehlder initiatives, nt just legislatin (e.g. UN Glbal Cmpact participatin, reprting under GRI and ther sustainability reprting). Any cnsultatin prcess must invlve multi-stakehlder cnsultatins, with business nting the imprtance f different stakehlder grups hearing each ther s views and perspectives. Single stakehlder cnsultatins culd als be valuable, as culd industry/sectr-specific r issues-based cnsultatins t ensure mre granular discussin. Cnsideratin shuld als be given t separate sessins fr SMEs as well as the best way t integrate SMEs int ther discussins. 29 July

7 Cnsideratin culd als be given t an nline feedback mechanism. The prcess needs t include a brader discussin with business t demnstrate the ptential psitive impacts f a NAP, s that it is understd as smething f benefit t business, and nt incrrectly as just anther layer f regulatin, particularly fr SMEs. The benefits f a NAP wuld need t be clearly articulated t ensure the brader business cmmunity is supprtive. Develpment f a NAP culd be psitined as a catching up prcess fr Australia, t meet basic internatinal standards. It was nted that many Australian businesses that perate verseas already face higher standards and expectatins in ther jurisdictins. Next steps The Australian Gvernment is cnsidering the pssibility f undertaking an NBA, and the natinal cnsultatin prcess n implementatin f the UNGPs, as cmmitted t. Next steps will be made public in due curse. The GCNA will keep business updated n develpments, and will cntinue engagement and dialgue with ther stakehlder grups n the issue f a ptential Australian NAP. The GCNA and Australian Human Rights Cmmissin will cnvene the third Australian Dialgue n Business and Human Rights n 28 Octber 2016 which will als prvide an pprtunity t further discuss these issues in a multi-stakehlder setting. 29 July

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