Businesses must uphold human rights: Michael H. Posner
By Srijana Mitra Das
"I started the Center for Business and Human Rights in the NY U Business School some years ago. Our focus is on how global companies operate in the world and what the human rights challenges associated with their activities are. A lot of this researches global supply chains in manufacturing, farming, mining, etc., and the risks therein to vulnerable people like workers."
Michael H. Posner teaches ethics and finance at NYU’s Stern School of Business. Speaking to Srijana Mitra Das, he discusses why businesses need to care about human rights:
Q. What is the core of your research?
A. I started the Center for Business and Human Rights in the NY U Business School some years ago. Our focus is on how global companies operate in the world and what the human rights challenges associated with their activities are. A lot of this researches global supply chains in manufacturing, farming, mining, etc., and the risks therein to vulnerable people like workers. We also study how big technology compa-nies operate in terms of privacy, free expression, disinformation and harmful content and how the investment community infuences all of this.
Q. Geopolitics aside, what is the signifcance of the Uyghur Forced Labor Prevention Act which has been passed by the US Congress?
A. The situation in Xinjiang, China, has dete-riorated quite dramatically — by many accounts, over a million people are being detained, with massive forced labour, particularly in agri-cultural production. This law, which comes into effect in June, presumes that any product produced in Xinjiang province or including raw materials from there is the result of forced labour — the presumption is that such goods should not be allowed into the United States.
Q. what will be the likely impacts of this law on diverse industrial sectors?
A. About 80% of the cotton produced in China comes from Xinjiang province. The polysilicon used in solar panels also overwhelmingly comes from Xinjiang — and most of the solar panels coming into the US are from China. So, the apparel, textiles, solar panel and electronics industries are most affected by this law. The ques-tion now is, how to enforce it and what to do especially about solar panels which are so deeply needed in the global eort to reduce carbon — if you don’t have an alternative source of produc-tion, what should you do in the short term? These are challenges for both industry and government. This law has been passed with huge bipartisan support in the US Congress though, at 406 votes to three — now, its practicalities must be tackled.
Q. Do businesses have a deeper responsibility to uphold human rights and, if so, why?
A. I think they certainly do. Consider the origins of the United Nations and the Universal Declaration of Human Rights in 1948 — all those initial discussions were about government responsibility. The assumption was, if governments abide by human rights, that solves the challenge. We now know that many governments are either unwill-ing or unable to protect their own people — there is a ‘governing gap’ in ensuring that individuals are protected.
Alongside this, we have large global companies trying to make money by operating where labour is cheaper and regulations are less stringent. But companies should not outsource responsibility for how they make money — and govern-ments are beginning to create laws about this. Governments in Europe are adopting man-datory due diligence laws, telling companies operating worldwide that they have a responsibility towards human rights, social and labour issues. We are now in the process of creating some rules of the road for how companies should operate in these areas. We need to develop industry standards to eva-luate corporate behaviour, so companies are both encouraged and compelled to do the right thing.
Q. Are some companies voluntarily shunning forced or child labour in global supply chains?
A. I chair the Fair Labor Association which includes about 60 apparel and footwear com-panies and many agricultural businesses. It’s 20 years old and includes Adidas, Nike, Hugo Boss, Patagonia, NSE 0.73 % , etc. These companies have agreed to abide by a set of nine labour standards, on child labour, hours of work, workplace safety, forced labour, etc., and are evaluated every three years on compliance. This is an example of companies coming together voluntarily to work towards greater accountability, overseen by a board composed of NGOs, universities, civil society groups, etc. That indicates a way forward in developing concrete industry standards and having competitors agree to a common framework where they can be evaluated.
Q. Can consumers help fair labour practices?
A. The consumer is very important here — but companies have also become very savvy at showing how much good they’re doing, even when they’re not. We lack independent data for consumers to make truly informed decisions. However, many consumers worldwide do want to do the right thing and are examining brands in that light — but there is considerable confusion in this space, driven also by companies spending on marketing, showing that they’re green, that they treat workers well, etc. We need more pub-licly available data which allows consumers to evaluate these claims and reward companies that live up to their trust. Once such standards are put together, companies will pay a lot more attention to these issues as their ability to succeed in the marketplace will be impacted by consumers making purchasing decisions based on their performance on environmental and social metrics. Views expressed are personal.