How does the Universal Declaration of Human Rights relate to business?

• Many human rights listed in the UDHR are directly relevant to business and concern issues which many companies routinely address in their day-to-day operations. These include the labour-related rights, freedom from discrimination, the right to health, the right to privacy, to mention but a few.
• States have a duty to respect, protect and fulfil the human rights of their citizens and of people living in their territories. However, it was understood by the Member States of the United Nations when adopting the UDHR that achieving universal enjoyment of the rights would require immense efforts by all, including business. States therefore included in the UDHR a call on "every individual and organ of society" to strive to promote respect for the rights included in the UDHR and "to secure their universal and effective recognition and observance."
• The UDHR also makes it clear that everyone – and this is considered to include business – have duties to the communities with regard to human rights.

How can business benefit from promoting and respecting human rights?

Business increasingly needs a stable international environment in which to operate. Many companies have realized the benefits of operating in countries governed by the rule of law and respect for human rights. In addition, companies who promote and respect human rights may enjoy a number of commercial and other benefits. They include:

• Improved stakeholder relations
• Improved employee recruitment, retention, and motivation
• A more secure license to operate
• Increased security of investments in countries governed by the rule of law and respect for human rights
• Reduced risk of consumer action
• Reduced risk from human rights related legal action
• Reduced reputational risk

What are the human rights responsibilities of business?

• Over the past decade, there has been increasing focus on the role of business in relation to human rights. Although many companies routinely apply human rights in their operations, there is substantial debate over which human rights can and should apply to business, in what way, and what should happen in cases where companies are alleged to be violating human rights. The exact boundaries of companies’ human rights responsibilities still need to be clarified.
• In 2005, the United Nations Commission of Human Rights asked the Secretary-General to appoint a Special Representative to identify and clarify standards of responsibility and accountability for companies with regard to human rights. This work is still ongoing, but is expected to be completed in 2007.
• In 2003, an expert body of the United Nations developed a set of Norms which spelled out the human rights obligations of companies, focusing on the right to equal opportunity and non-discrimination; the right to security of persons; the rights of workers; consumer protection; environmental protection; and economic, social and cultural rights. While these Norms have no formal legal status, they may provide illustration to companies wishing to better understand human rights and the content of the human rights commitment they have undertaken by signing on to the Global Compact.

What are the risks facing companies who fail to address human rights issues?

• Allegations of human rights violations may inflict serious damage on a company’s reputation. The reputation of big brand-name companies is particularly vulnerable to human rights allegations. According to the International Organisation of Employers, the mere accusation that a company is using child labour in its operations, either directly or indirectly, can lead to an immediate blow to its reputation and the threat of consumer boycotts.
• Companies that fail to take allegations of corporate human rights abuse seriously do so at the risk of substantial damage to their company’s reputation among key stakeholders, including customers, investors, shareholders, and current and prospective employees.
• Companies may also be exposed to lawsuits if they fail to address human rights issues within their sphere of influence. Victims of alleged human rights violations are increasingly seeking legal remedies in order to hold companies accountable for the alleged violations.
• Companies may also face a risk from investors as a result of mishandling human rights issues within their operations. In a survey of the five human largest companies worldwide, thirty-six percent reported abandoning a proposed investment project and nineteen percent reported disinvesting entirely from a country due to human rights issues.

Examples of situations where companies have faced accusations of complicity in human rights abuses:

• An oil company was sued in the USA for alleged complicity in serious abuses committed by foreign government forces in the building of a natural gas pipeline;
• Another oil company was sued for allegedly recruiting local police and military to suppress a local pressure group. The company was alleged to have provided logistical support, transportation, and weapons to the authorities to attack villages and stifle opposition to the company’s oil-excavation activities. Local residents have allegedly been beaten, raped, shot, and/or killed during these raids;
• A company was sued in the USA for allegedly hiring or otherwise directing paramilitary security forces that used extreme violence and murdered, tortured, unlawfully detained or otherwise silenced trade union leaders of the union representing workers at the company’s facilities in a third country;
• Banks have been sued in the USA with respect to the dormant bank accounts of Holocaust victims and their heirs. It was alleged that the banks facilitated the Nazis’ looting and retention of wealth. The banks were portrayed as "fences" for the Nazi regime;
• South Africa’s Truth and Reconciliation Commission concluded that companies had been "willing collabourators" with the apartheid regime since the early 1960s. It said certain corporations had had a "direct interest in maintaining the status quo." They bypassed attempts to impose sanctions by "forming partnerships with South African para-statal organisations";
• A report by the UN Panel of Experts on the Illegal Exploitation of Natural Resources from the Democratic Republic of Congo (DRC) found in 2003 that the exploitation of natural resources by international corporations had fueled a bloody civil war characterised by widespread human rights violations. Corporations that had obtained, traded or purchased lucrative natural resources in the DRC were said to have financed the groups who carried out these violations.