Jo Swinson MP on new measures to rank companies’ human rights performances

2014Business_Forum_headerIn early December I attended the 3rd annual United Nations Forum on Business and Human Rights in Geneva.

The Forum gave an opportunity for key stakeholders to discuss how we can ensure universal human rights standards are upheld in business practices. As a Liberal Democrat and an internationalist I know, on an issue as important as this, co-operation with our global partners is the best way of ensuring transnational businesses maintain their responsibilities to their employees and their consumers.

So I am delighted that the Coalition Government has announced that we will be supporting a new Corporate Human Rights Benchmark which will assess and rank the human rights performance of international companies. My department – Business, Innovation and Skills – will provide £80,000 of start-up funding.

A consortium led by Aviva, one of the UK’s largest investors, developed this proposal which will start with an annual assessment of 500 companies’ performances, with the full results published openly. The ranking will provide a transparent, publicly available and credible benchmark by which businesses can be held accountable for their human rights practices.

I want other countries to throw their support behind this initiative so we have a strong international alliance behind the business and human rights agenda.

The UK is already a world leader in this field. Last year, we became the first country to publish a national action plan with guidance for companies on how to integrate human rights into their operations, including increased transparency over policies and dealings.

Setting out the Government’s expectations of businesses, Vince Cable said at the time:

A stronger economy depends on investors, employees and the wider public having trust and confidence in the way companies conduct themselves both at home and abroad.

I have been very vocal in calling for greater transparency in business supply chains as a way to end the scourge of modern slavery. British consumers are entitled to know who is producing their goods. Thankfully we have had real success in this area.

As a result of Liberal Democrat pressure, the Modern Slavery Bill was altered to require large companies to disclose what steps they have taken to eradicate modern slavery in their supply chains. Credit must go to Andrew Stunell for his efforts in helping this measure reach the statute book.

In my role as a Business Minister, I have also reformed the Companies Act to strengthen companies’ non-financial reporting to include information on human rights, where necessary for strategic understanding of the business.

Standing up for human rights across the globe unites all Liberal Democrats. We will continue to fight to protect vulnerable workers, hold businesses to account and ensure customers have clearer knowledge about companies they are dealing with.

This Benchmark is a welcome, positive step. Our challenge now is to make sure other nations advocate these principles and follow the UK’s lead.

* Jo Swinson is Liberal Democrat MP for East Dunbartonshire, and was a Minister in the Department for Business, Innovation and Skills and Equalities Minister from 2012-15.

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  • Eddie Sammon 22nd Dec '14 - 7:47pm

    I think this is fine, as long as people don’t have unrealistic expectations for businesses. A lot of businesses simply want what feels like a “fair profit”, but it is a constant battle with the left in order to maintain this and sometimes the left wins and destroys your business.

    Another thing I’m weary of is any involvement with the UN. Recently I have noticed a distinct left wing bias with the UN and also a favour for celebrity speakers over expert ones. The UN, like the EU, can be a threat to liberalism and people need to recognise this.

    I am aware I am sounding like an economic liberal, but I am not. Economic liberalism is not even an all encompassing ideology.

    Thanks for the article and happy Christmas.

  • Julian Tisi 23rd Dec '14 - 9:49am

    A great idea in theory but I’m sceptical until I see the benchmark. By trying to measure something which by its nature is difficult to measure we could perversely end up discouraging good behaviour. For example, as a crude rule poorer countries tend to have poorer human rights records (yes, this is a crude generalisation). Many poor countries desparately need trade in order to move forward, become richer and in turn this can lead to improved lives in many ways – including human rights. As a rule we surely want to encourage firms to invest in poorer countries. Trouble is, will they get marked down for doing so? Politics in this country (and sadly in this party) is already rabidly anti-business. Of course there are bad apples but the prevailing belief in this party is that the bad apples generally outnumber the good ones.

    Will this help encourage good behaviour and in turn help improve human rights? I hope so, but I’m sceptical. I suspect it’s more likely to be used as another stick to beat any company that dares to invest in places which desparately need trade.

  • Paul Reynolds 23rd Dec '14 - 12:34pm

    It is my battle-worn opinion that it is important for all UK politicians, especially LibDem ones, to be clear about the public-orientated problems that they are trying to address. In a world with immense pressure from the public for reprentatives to address their priortity problems, and where politicians are not held in high regard, it is vital that politicians do not embark on initiatives that look like ‘thinking up new things to do’. Every government department is full of officials trying to climb the ladder by persuading ministers to adopt their pet projects. A key role for politicians is to engage in the difficult task of focusing civil servants on solving priority problems. We should not I believe fall into the trap of cooperating in a game of mutual CV enhancement together with officials. One can be made to feel very important flying off with officials in tow to ‘world progress’ type of UN events where international statist ideologies of one sort or another are on display. If UK politicians are crystal clear about the specific problems they are trying to address it becomes easier for the public to make an assessment of whether their priorities are being pursued.

  • Nick Tregoning 23rd Dec '14 - 1:28pm

    Business does have an uneven reputation with people, let alone within political parties. This isn’t simply anti-business sentiment, but is based upon the sometimes half-articulated suspicion that businesses see their objective as maximising shareholder value first and last, and that they will perpetrate any rip-off of the customer, employee, and stakeholder they think they can get away with to achieve it. Such a view is a travesty, but it is gaining traction – assisted by Enron, BSE, sub-prime, horsemeat – I could go on.
    This initiative is welcome but limited. What is required is what Michael Porter and others are speaking and writing about which is recognising that CSR and its derivatives are no substitute for ensuring that the daily practicable work of the business conforms to high ethical, & environmental etc. practice. Porter argues that businesses need to wake up to the fact of customers’ disillusionment with business practice, and embed social responsibility rather than bolting it on. That will require a change in company culture for many.

  • Paul Reynolds 23rd Dec '14 - 6:09pm

    As the phrase goes… I don’t agree with Nick (see above). A better direction to go is to tackle comfortable and exploitative monopoly power and develop note effective, simpler and higher quality regulation. It is easy for politicians to add to the tsunami of new and often daft regulations by coming up with new things to regulate. without properly considering the extant laws, the effectiveness of existing rules or the practical outcomes of the current interaction of rules for the general public. It is just too tempting sometimes to just add new rules so as to be seen to be doing something…rather than being diligent on how problems are defined and rather than taking a good look at the totality of the rules and the underlying sources of the problem. This is what the public require …and how we should approach the problems of apparent ‘corporate irresponsibility’ and breaches of human rights by private and state controlled firms, inside and outside the EU.

  • Richard Underhill 6th Aug '16 - 11:29am

    The host country reminds the world of transatlantic slave trades to the Americas at the Olympic opening ceremony in Rio de Janeiro.

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