Doing Business in High Human Rights Risk Countries

Sadly, too many people live and work in countries where contextual conditions create grave risks of severe and widespread human rights abuses by parties in authority or seeking to assume control over the lives and freedoms of others.  Examples include countries where there is a high risk of civil conflict, high levels of corruption, a lack of respect for the rule of law and/or a weak judicial and public security system or active efforts of the state to limit basic human rights such as freedom of association and expression.  Each of these situations weaken the political and social framework necessary for protecting human rights and providing people with a sense of security and wellbeing and effective remedies for human rights abuses.  Many companies decide that the challenges of operating in such high risk countries outweigh any benefits; however, those countries also offer resources and business opportunities that cannot be ignored.  In addition, engagement with such countries to make a positive contribution to economic, social and cultural conditions is a way for businesses to make an impact toward the global drive for sustainable development.

Whenever your company is considering launching a project in a new country, an analysis of human rights conditions and risks should be carried out at the same time that the company is assessing traditional business factors such as economic conditions, natural resources, human capital, technology etc.  Information is available from governmental agencies, international trade associations, labor organizations and private consultancies, many of which publish rankings of countries based on human rights metrics.  Special consideration should be given to identifying relevant laws and regulations, if any, and how they have been enforced by the state through its policing powers, regulatory administration and the court system.  The next step should be conducting human rights due diligence on the company’s proposed activities, the local partners who will be involved in some way in those activities (including governmental bodies that may participate as investors or sources of required permits and licenses) and the communities in which it is expected that the company will be operating.  All of this information can be used to develop a human rights action plan for the project that includes contractual provisions, engagement strategies and ongoing tracking of the situation as the project evolves and the company’s footprint in the country deepens.  Elements of such a plan might include the following:

• Engaging with those local stakeholders that will be impacted by the project, taking special care to identify and consult with legitimate representatives of vulnerable groups
• Engaging with local civil society organizations to explain the goals of the project and elicit their support for collaboration to develop strategies to respect the human rights of local workers, consumers and community members
• Implementing the Voluntary Principles on Security and Human Rights in the gravest situations where the risks related to civil conflicts are highest and extraordinary steps are necessary to protect the safety and security of the company’s operations
• Working with governmental bodies (perhaps as a member of a group of peer companies) to address weaknesses in the rule of law generally and the availability of certain rights especially relevant to business projects such as the rights to freedom of association and expression
• Establishing processes within the project to provide stakeholders with tools to communicate their concerns and opinions when the formal legal framework is weak (e.g., introducing programs that allow workers to present their ideas to management with the expectation that management will respond in a timely manner and explain decisions that have been made with respect to such ideas)
• Providing education and training to workers and community members regarding human rights issues to empower them to better represent themselves and accept support from local civil society organizations and NGOs
• Establishing compliance and communications processes to monitor transactions and other interactions with local governmental bodies
• Evaluating and monitoring payments made, or products and services delivered to, governmental bodies (or affiliates of such bodies) to determine whether such transactions might reasonably be construed as making the company complicit in human rights violations by the state

Companies are sometimes invited or heavily recruited by governments in countries where human rights risks are high to set up business in what is billed as an effort by those governments to improve the lives of their citizens; however, before entering any such country, management must be prepared to do so based on adherence to internationally recognized human rights and with the intent to avoid complicity with the bad acts of local governments and engage political leaders about their obligations to protect and respect the human rights of citizens who will be working for the company and using the company’s products and services.