Triggs, Gillian --- "The business of human rights" [2015] PrecedentAULA 32; (2015) 128 Precedent 4

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THE BUSINESS OF HUMAN RIGHTS

By Professor Gillian Triggs

Many Australian businesses now recognise that respect for human rights is not only the right thing to do, it is good for business. Whether a business operates domestically or internationally, human rights compliance raises a significant issue for risk management. More positively, the respect and promotion of human rights contributes to enhanced innovation and productivity. A diverse and inclusive workplace supporting transparent and respectful operations is both best practice and advantageous in a global competitive market.

At the Australian Human Rights Commission we are in a unique position to understand the relationship between business and human rights. We know from our investigation and conciliation service that the overwhelming number of human rights and discrimination concerns of the public arise in the area of employment, and to a lesser extent, the delivery of goods and services in the private sector. In addition to our investigation and conciliation service, the Commission works very closely with business on the development of resources to assist employers to comply with the specific discrimination laws that apply to their workplaces and the way they provide services, but also on other human rights issues that emerge for business.

Businesses themselves appreciate that their influence is multi-dimensional as they interact with a wide range of people including employees, consumers, shareholders, people who live in the area of their operations, governments at home and abroad, media, community organisations and other stakeholders. Therefore, the scope of their influence extends far beyond adherence to formal discrimination laws. Indeed, business has enormous scope to influence the protection of human rights in employment, access to services and the promotion of sustainable economic development which can enhance a population’s enjoyment of most human rights. For example, in 2012, the Commission appointed Deloitte Access Economics to conduct primary research to measure the economic impact of employment participation rates of people over 55 years of age.^[1] The study found that an increase of 5 per cent in paid employment for Australians over 55 years of age would result in around $48 billion in extra GDP, equating to 2.4 per cent of national income. Similar research across other areas also supports greater inclusion as economically effective in relation to gender^[2] and disability.^[3]

Over a number of years, the Commission has supported business in its endeavours to respect human rights, including through sharing good practice on safeguarding standards in supply chains, developing appropriate consultation with stakeholders and grievance processes. All Commissioners at the Australian Human Rights Commission work with business to promote the social and economic benefits of a diverse and inclusive workplace.

Human rights are increasingly protected by both law and ethics in the business world. But this has not always been the case. Today, it is an exciting time for business and human rights because of a happy convergence of a number of factors.

First, decades of discrimination law have created a language of fairness at work and an evolving understanding about the legal obligations of business. Secondly, high-profile human rights litigation has drawn attention to the multitude of business influences and the need for ethical reflection. Finally, recent developments at the international level, most significantly the endorsement of the Guiding Principles on Business and Human Rights by the United Nations Human Rights Council in 2011, have created an environment for more proactive and innovative responses from business.

In the coming years, it is likely that business both small and large will further embrace diversity and promote discrimination-free workplaces as well as reflect on how their operations can be fairer, more transparent and more valued. To build on the work of business, the Commission has recently launched the Good Practice, Good Business hub^[4] and the Human Rights and Business Network.^[5]

The message is clear. There is a new way of working for business and with business on human rights, with multiple entry points for engaging with business based on both law and ethics.

DISCRIMINATION LAW PROVIDES A SOLID FOUNDATION OF FAIRNESS

Discrimination law remains an important touchstone for business engagement as all businesses seek clear and practical information on their legal obligations. This is particularly the case for small- and medium-size businesses that may not have the time or resources to develop an understanding of their legal responsibilities in relation to discrimination and the benefits of embedding human rights into their operations. Given that small-to-medium businesses employ 70 per cent of the workforce, the scope for potential impact is significant.^[6]

Last year, the Australian Human Rights Commission received 19,688 enquiries and 2,223 formal complaints about discrimination or breaches of human rights. The majority of these complaints involved businesses in their role as an employer or as a service provider. For example, 80 per cent of all complaints received under the Sex Discrimination Act were in relation to employment. Similarly, 62 per cent of the complaints received under the Age Discrimination Act were in relation to employment and 37 per cent under the Race Discrimination Act. Under the Disability Discrimination Act, 33 per cent of all complaints were received in relation to employment and 39 per cent were made in relation to the delivery of goods and services.

When the Commission receives an enquiry, it investigates the facts, determines if we have jurisdiction under our Act and, if admissible, we attempt to conciliate a formal complaint. The Commission is successful in conciliating around 70 per cent of the formal complaints. The service is free to both complainant and respondent and is confidential. Importantly, no complainant can go to the Federal Courts without first coming to the Commission. If the matter is not settled, a party can appeal to the Federal Court under the laws that prohibit discrimination on the grounds of race, sex, disability or age. In these ways, the Commission provides a valuable service to business that effectively resolves complaints and diverts most matters from the courts. Importantly, the Commission’s process is seen to be a fair process that provides access to justice to both parties in a dispute.

Through the complaints process, we can see that many businesses are keen to proactively take steps to support human rights and, in particular, to create a diverse and inclusive workplace. Indeed, a common outcome that respondents and complainants seek is a change in culture. A recent example from our conciliation service demonstrates this point.

In August 2013, amendments to the Sex Discrimination Act – the Sex Discrimination Amendment (Sexual Orientation, Gender Identity and Intersex Status) Act 2013 (Cth) – came into force. It prohibits discrimination on the basis of sexual orientation, gender identity and intersex status in the workplace. Since then, the Commission has received a growing number of complaints on these grounds.

One complainant claimed that the director of the company for which she worked sent a letter to the company's creditors explaining the negative financial situation of the company. In the letter, the director indicated that the complainant's transition from male to female gender identity was a cause of the company’s financial decline. The complainant claimed the letter 'outed' her as transgender to many in the industry so she resigned from the company.

The complaint was resolved with an agreement that the company write to the complainant apologising for any hurt she experienced, write to its creditors emphasising that there was no connection between the complainant's transgender identity and the company's financial situation, and write to staff reiterating that it is an equal opportunity employer.

The example demonstrates that redress for discrimination in the workplace can take many forms beyond financial compensation and, indeed, the creation of better workplace culture through the adoption of policies or statements regarding discrimination and inclusion is often an agreed outcome. The valuable aspect of outcomes such as these is that there is no monopoly on the best ways to promote diverse and inclusive workplaces and work practices. When business gets together with its employees and stakeholders to develop strategies to fully address discrimination and promote inclusion, creative and innovative solutions will follow.

HUMAN RIGHTS LITIGATION HAS ENCOURAGED ETHICAL THINKING

Beyond the role of discrimination laws, the business and human rights agenda has been increasingly influenced by high-profile human rights litigation against companies and, as a result, has moved business beyond technical legal analysis to ethical reflection.

Despite the crucial role that business plays in promoting human rights, cases are often reported where business has failed terribly and committed egregious human rights abuses. There is not one single piece of legislation that covers these situations; rather, there are a multitude of potential laws or common law principles that are relevant to business, especially those operating in more than one jurisdiction.

One of the more prominent examples of business failure in Australia also demonstrates a point about the ubiquitous and elusive nature of human rights litigation. The Australian Wheat Board corporate scandal first exposed in the 2005 United Nations report resulted in criminal and civil charges being instigated. The criminal charges were dropped, but actions under Commonwealth corporations law were successful (and some cases continue today). All the cases involve the business practice of bribes paid to the regime of Saddam Hussein in exchange for wheat contracts.

So how does the payment of bribes for business contracts impact human rights? Of course, many people recognise bribes as contrary to business practice and specifically against corporations law. But when the bribes are being paid to a regime that is subject to United Nations sanctions because of atrocities committed against its own people, human rights issues are also engaged.

Human rights are not only protected by court proceedings. High-profile scandals, such as the Australia Wheat Board case, have created an environment whereby business understands both the legal and reputational risks of turning a blind eye to human rights considerations.

This issue of perception is an interesting one because law tends to focus on technical legal rights and yet, increasingly, legal advisers to business will need to consider the perception, not just the legality, of a particular business action, especially when human rights concerns are raised. This means business looks beyond operating with regard to technical legal rights but also considers its ethical obligations and reputation. For example, what legal standard should a business apply to its overseas operations; the local law (if there is one) or the Australian law with higher standards? In some situations, there may even be competing local laws! What should a business do when there is a lack of regulation on controversial business practices? Technical legal answers to these questions do not provide the full guidance that business needs to operate.

Those who are cynical about the business and human rights agenda may be quick to point out that business is interested in promoting human rights only so long as it supports its profitability. Profitability and respect of human rights are not mutually exclusive concepts. The credibility of a business depends upon what it actually does to respect human rights. It is the outcome rather than intentions of business that will be scrutinised by the community.

Business is increasingly credible when it comes to taking human rights initiatives. Businesses are keen to attract and maintain customers and investors by making verifiable statements about their business operations. Business is well aware of statutory prohibitions in relation to misleading or deceptive conduct and the potential of the Australian Consumer Law to highlight human rights issues in this regard. Companies making inaccurate statements about their workforce either in Australia or abroad, or the processes by which their products are made or services delivered, can trigger action under these laws.

So what does all this mean? It means that we can approach business-led human rights initiatives with confidence and that the legacy of human rights litigation has prompted many businesses to consider the ethics of their operations.

INTERNATIONAL CONSENSUS CREATES A PROACTIVE BUSINESS ENVIRONMENT

Over the last decade, there has been growing international momentum promoting the link between business and human rights. After years of debate and consultation led by Professor John Ruggie, the United Nations Special Representative for Business and Human Rights, there is now further clarification at the international level about the responsibility of business through the United Nations Guiding Principles on Business and Human Rights.

The Guiding Principles were endorsed unanimously by the United Nations Human Rights Council in 2011. The Principles have a three-pillar framework: Protect, Respect, Remedy. Under the second pillar, the corporate responsibility to respect human rights, companies are expected not only to avoid causing or contributing to adverse human rights impacts, but also to address ‘human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts’. The Guiding Principles also provide that a business must provide access to a remedy when a breach of human rights occurs.

No legal obligations for companies have been created by the Guiding Principles, but the principles are the authoritative global standard which comes with a significant degree of moral force. Indeed, the specific focus on access to a remedy for breaches of human rights has created an environment where business is developing innovative and creative solutions to provide redress, as well as implementing changes to work practices to better respect human rights.

HUMAN RIGHTS AND NEW WAYS OF WORKING

There are both economic and social opportunities for a company that embeds human rights considerations into its core business practices, and significant costs for a company that does not take human rights into account. Whether a company operates domestically or internationally, it is understood that it is good business practice to identify and understand the human rights impacts and risks of business operations and activities. Business activities that negatively impact human rights may limit growth, lead to litigation, reputational damage, or damage to stakeholder relationships. However, respecting human rights goes much further than risk management, and can strengthen operations that may potentially generate new business opportunities and create value for broader society. For example, empirical research provides evidence that businesses can improve their organisational performance through a diverse and inclusive workforce.^[7]

From a practical point of view, it means that there are many good businesses taking proactive steps to support human rights. Businesses are revamping their discrimination policies to take into account changes in the law and developing strategies to attract diversity in their workforce. Businesses are ensuring their internal grievance processes are robust and provide complainants (whether they are employees, consumers or others affected by the business) with a genuine forum to raise concerns. Businesses are more openly reporting on their ways of working and reviewing their supply chains. Businesses are even developing human rights policies. For the most part, this occurs behind closed doors and without much media attention. However, it is these initiatives and practices that are the true business of human rights.

Professor Gillian Triggs is President of the Australian Human Rights Commission. EMAIL [e-mail].

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^[1] Australian Human Rights Commission, Increasing participation among older workers: The grey army advances (2012). At http://www.humanrights.gov.au/our-work/age-discrimination/publications/increasing-participation-among-older-workers-grey-army (viewed 20 March 2015).

^[2] Goldman Sachs & JB Were Investment Research, Australia’s Hidden Resource: The Economic Case for Increasing Female Participation (2009). At www.womenonboards.org.au/pubs/reports/091130gsjbw.pdf (viewed 20 March 2015).

^[3] Deloitte Access Economics, The economic benefits of increasing employment of people with disability (2011). At http://www.and.org.au/pages/deloittes-report-the-economic-benefits-of-increasing-employment-of-people-with-disability.html (viewed 20 March 2015).

^[4] https://www.humanrights.gov.au/our-work/employers.

^[5] https://www.humanrights.gov.au/employers/join-network.

^[6] SME Association of Australia, Small and Medium Enterprises in Australia. At http://www.smea.org.au/sitebuilder/newsmedia/knowledge/asset/files/38/revised3.pdf (viewed 20 March 2015).

^[7] See Victoria Equal Opportunity and Human Rights Commission and Deloitte, Waiter, is that inclusion in my soup? A new recipe to improve business performance (2012). At http://www.humanrightscommission.vic.gov.au/index.php/our-resources-and-publications/reports/item/529-waiter-is-that-inclusion-in-my-soup-a-new-recipe-to-improve-business-performance-nov-2012 (viewed 25 March 2015).