Last week, Unilever released the first Human Rights Report using a UN Guiding Principles Reporting Framework developed byShift Project, which is a business and human rights specialty group, and Mazars Group, which is engaged in auditing and transparency. It is worth noting that Shift is largely made up of individuals who worked for John Ruggie, the former UN Special Representative to the Secretary General on business and human rights, while he was developing the 2008 UN Framework on business and human rights and the 2011 UN Guiding Principles on Business and Human Rights (several of those have much longer proper titles, but I’m on a word limit), but has not yet been endorsed by the UN Working Group.
By Dr. Tara Van Ho. You can follow Tara on twitter: @TaraVanHo
The report came just as the first meeting of UN’s intergovernmental working group on a proposed business and human rights treaty is getting underway this week, and could provide insight into the feasibility of maintaining a voluntary reporting system.
Unilever’s report is an astounding 69-page document outlining exactly how the business has worked to incorporate human rights into its operations and where it intends to go next.
Well, not exactly exactly…
The report – and the reporting framework it’s based on – are not internal documents for corporate use, but instead have an externalized locus, expressing to the public what the corporation is doing. As a result, it tells us some but its silences are also significant.
I am going to quickly outline a few points about the positive developments, the potentially positive, and areas that are still concerning. Because this post is intended to help develop further responses, it is admittedly heavier on the areas of concern than anything else. So, before I start, let me say that I do think the Reporting Framework is a great first step and an important initiative. I think Unilever should be commended for producing its report, and for the detail within the report. I think the criticisms I have should not take away from either of those realities, but should be used as a means of thinking about where we need to go next in the field.
1. It’s human rights specific. This is a vast improvement over normal ethical reports that address human rights, the environment, and labour as one, lumping them together without necessarily distinguishing each in any significant way. There are, unquestionably, overlaps between the areas; they are not, however, interchangeable. The choice of lens one uses in defining standards and will taint the totality of any assessment or reporting initiative. That said, I have concerns that some of what Unilever describes engages corporate social responsibility rather than human rights issues. For example, Unilever discusses its HIV-related initiative (p.41), which sounds like a great initiative, but as HIV is not the kind of impact that stems naturally from Unilever’s operations, it’s not really a business and human rights issue. I would have been more interested in knowing how it handles the health impacts operations can have on community members. I address this more below.
Potentially Positive Developments:
1. The report has the start of a good methodology, incorporating qualitative data and policy. It is extremely light on quantitative data, though. Many of the numbers in the report are a bit useless, non-specific, or limited in the information they reveal. So the inclusion of global statistics on issues such as forced labour (p.32), occupational accidents and diseases (p.39) or rates of poverty (p.31), tells us nothing about Unilever. These numbers are actually a bit problematic as well, because they give the appearance of including quantitative data without giving us really anything, so it almost conceals the weakness of the report.
Some of the Unilever-specific statistics are also less than informative or helpful. For example, Unilever tells us the percentage of senior leadership who are female (p.29), which is an important number, but it’s not the most important number. Similarly, it tells us how many people in its Kenyan tea operations know of sexual harassment policies and procedures (pp.36-37), but that’s a very limited issue (no matter how important it is), and a very limited operation.
Unilever does tell us how many reports / complaints it has received to date (pp.48-49), but not how many have made their way through the system. How much has been paid in remedies or remediation? How many provided positive feedback about their experience? How many remained dissatisfied? What’s the makeup of those handling the complaints, of those being complained about, and those doing the complaining? These numbers matter and the best reports will have a mix of qualitative and quantitative data along with policy explanations. Unilever hasn’t quite gotten there yet.
2. Unilever will develop its own auditing process.
I am going to address in a separate post my general aversion to one-size-fits-all human rights auditing processes (of which there are many), but it’s worth noting here that the Unilever report indicates (p.49) that they’ve previously used Supplier Ethical Data Exchange (SEDEX). SEDEX’s website suggest the audit is focused on labour issues rather than a holistic human rights approach. The limited nature of the audit is problematic, but so is the limited access to the audit itself.
SEDEX requires a membership, and all the memberships require either being a supplier (i.e., a corporation) or being a trading partner of a supplier (Art. 1 in the link). As a result, I, as an independent academic or lawyer, am not lawfully entitled to access SEDEX’s reporting frameworks to determine the legitimacy of their methodology or the completeness of their considerations for a business and human rights assessment.
So it’s potentially encouraging that Unilever will now employ its own Unilver Responsible Sourcing Audit. The company’sResponsible Sourcing Policy guidance indicates it will include more than just labour rights (but see my ‘red light’ below).
I searched for an actual audit sheet but couldn’t find it, which is ultimately why the entire auditing process is an area of concern, rather than a positive development. Having an audit is not the point – demonstrating the proper use of an audit is. That can’t be done without further disclosure. So knowing that Unilever wants to fight bribery and corruption (p. 7 of the Policy) is fine, but its only with knowing that its auditing process is asking the right questions for that – and applying the right standards – that it can really be called a responsible business.
If Unilever is serious about employing best practices, it needs to share widely at least the methodological and foundational starting points for its auditing processes. Audits should all have this – certain questions that have to be asked and answered in all situations, coupled with the starting point for the semi-structured interviews. We get a glimpse of the methodology from the corporation’s guidance to suppliers, but to really know the worth of Unilever’s auditing process, we need to know the foundational questions that are included throughout the auditing process.
1. While the policy addresses human rights more broadly than just labour rights, there are some significant issues missing from the disclosure and the responsible sourcing policy guide. For starters, the only reference to security forces is in relation to who receives “on-going safety training” (p. 21 here). The proper use and selection of security forces can impact corporate complicity in human rights violations such as torture or on impacts on free assembly or free expression.
2. There isn’t a consistent, serious effort at identifying problems that others can learn from or that need to be addressed by society as a whole. This is, in part, the fault of the law itself. We don’t encourage transparency on problems. The well-worn rule in Anglo-American jurisprudence is that an advance admission of problems can give rise to liability, but an after-the-fact change to redress an issue is not considered an admission of liability. As a result, reports like this have a limited usefulness as they do not communicate to civil society how it can help, or to states what changes need to be made in the laws, or to shareholders what risks really remain.
3. I still don’t know which corporate entities are responsible for which parts of Unilever’s conduct. I know the Board is responsible for overseeing everything and “day-to-day responsibility lies with senior management around the world” (p.47 of the report). This tells me nothing about actual responsibility.
I know from the report that Unilever parent doesn’t operate all the factories, which is also obvious to anyone with a law degree. I know that there’s a Hindustan Unilever and a Unilever Tea Kenya. If I’m a victim who is not lucky enough to have Unilever spotlight what they’ve done in my local area, though, I likely know nothing more than that Unilever operates X facility or that Unilever products are manufactured at Y facility.
As I said at least year’s UN Form, in the side event organized by EBHR, I do not believe a corporation can claim to be human rights compliant unless it very clearly identifies for victims which entity is responsible for which actions, and who they can seek legal redress from if non-judicial mechanisms do not satisfy them. Anything less is an effective block to the respect and remedy responsibilities incumbent on corporations.
So, Unilever’s report is an important first step, but it should be seen as just that. The field needs to use this to figure out some of the more complex issues – like how we encourage transparency about problems when there are serious issues about corporate liability, and how we can ensure victims know who is responsible for what.
Disclaimer: The views expressed herein are the author(s) alone.