CORPORATE GOVERNANCE’S HUMAN RIGHTS ASPECT
Introduction:
Human rights have become a critical focus in corporate governance, closely tied to ethical considerations and enterprise risk management. Ethical lapses or negligence regarding human rights not only violate the rights of those affected but can also lead to tangible commercial consequences and jeopardize a company's existence. Long-term investors should view human rights as integral to investment analysis, valuation, and active engagement with companies.
This emphasis on human rights underscores the need for aligning corporate actions with ethical principles and legal responsibilities. It calls for a deeper examination of how businesses can uphold these rights not just for compliance but as a commitment to social responsibility, fostering a just and sustainable global business environment.
Relevance with Corporate Governance:
Human rights concerns encompass issues like child labor, forced labor, human trafficking, and extend to areas such as access to nutrition, clean water, and internet freedom. These issues go beyond reputation management; they impact stakeholder relations, financial performance, and sustainable value creation. Corporate governance must address these concerns as part of responsible management and long-term stewardship.
The ethical dimension of this discussion is crucial for a company's culture and values, impacting employees, customers, and communities. Corporate governance needs a reevaluation to guide organizations towards ethical and sustainable practices resonating with diverse stakeholders.
International Measures:
UN Guiding Principles on Business and Human Rights (UNGPs):
- **Protect:** The state's duty to protect human rights through effective regulation.
- **Respect:** Corporate responsibility to respect human rights by conducting due diligence.
- **Remedy:** Access to remedies for victims of corporate-related human rights abuses.
OECD Guidelines for Multinational Enterprises:
Recommendations for responsible business conduct covering labor, environment, anti-corruption, and human rights. Establishes a National Contact Point (NCP) system for grievance mechanisms.
ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy:
Encourages responsible labor practices by multinational enterprises, focusing on employment, training, industrial relations, and working conditions.
Global Reporting Initiative (GRI):
Provides guidelines for sustainability reporting, enabling transparent disclosure of economic, environmental, and social impacts, including human rights considerations.
The Corporate Human Rights Benchmark (CHRB):
Assesses and ranks human rights performance of large corporations, promoting transparency and accountability.
The Global Compact's Communication on Progress (COP):
Requires companies to report annually on their progress in implementing principles related to human rights as part of the UN Global Compact.
Domestic Measures (Pakistan):
Pakistan, a signatory to various human rights treaties, aligns its domestic laws and policies with international obligations. The Constitution's "Fundamental Rights" chapter and Sustainable Development Goals (SDGs) are rooted in human rights principles. Despite challenges, a National Action Plan (NAP) on Business and Human Rights reflects Pakistan's commitment to addressing issues comprehensively.
Ministry of Human Rights’ NAP:
The NAP focuses on measures such as SDG achievement oversight, gender inclusion in the formal economy, corporate social responsibility (CSR) guidelines, labor rights protection, environmental preservation, and financial transparency. It addresses corruption in public procurement, gender-based discrimination, due diligence mechanisms, occupational health and safety, and child and bonded labor.
In summary, Pakistan's NAP is a comprehensive framework promoting responsible business practices and protecting human rights in the context of business activities.
