Huma Siraj
In the nations where they conduct Business, multinational companies (MNCs) wield significant economic and social sway. According to data from 2023 research, there are over 80,000 multinational corporations (MNCs) worldwide, and that number is still rising.
Businesses are more likely to violate human rights in some jurisdictions as they grow their activities internationally. Between 2002 and 2017, one investigation confirmed that 160 multinational businesses had committed 273 human rights abuses.
I have represented clients in intricate international law and human rights cases for more than 20 years, and throughout that time I have often witnessed the crucial role that corporations play in our increasingly interconnected world. They have to adhere to both local laws and the UN’s Guiding Principles on Business and Human Rights, and their supply chains span international borders.
commercial executives frequently hesitate to take proactive measures to recognize and steer clear of human rights and commercial abuses. They erroneously believe that maintaining human rights and operating a successful company are incompatible. However, adopting a reactive rather than a proactive stance is a serious liability that exposes businesses and individual executives to fines and legal action.
Why should leaders be concerned about human rights and commercial compliance? Why should they be held responsible for the activities of their business and its subsidiaries at every stage of their supply chains and operations? Three factors ultimately determine the answers to these queries:
We don’t want anyone to suffer harm
People are the most important thing. For a period. Before we think about the appearance or the financial gain, we must put the safety of our fellow humans first.
Scandals are not what we desire
Negative publicity hurts companies. A company’s reputation can be severely harmed by violations of human rights or unethical business practices.
We wish to avoid taking on financial risk
Victims and their families are likely to pursue a lawsuit for large sums of money once a preventable catastrophe occurs. Multinational firms are therefore in the front of the line.
To put it briefly, due diligence benefits both company and people. It benefits both parties, but at the beginning of any new endeavor, leaders must be prepared to have frank discussions and be transparent. This is significant because major human rights breaches are frequently obstructed by the enormous economic might of multinational corporations and the intricate legal and corporate frameworks they represent.
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Three Crucial Preventive Actions
If you are a member of an MNC’s leadership team, take action now rather than waiting for a disaster to happen. Take proactive steps to identify your risks, strengthen your company’s resilience, and promptly resolve issues as they emerge.
Recognize Your Area of Responsibility
Make the effort to learn about the legal requirements in each location where your business operates. It is your duty to make sure that all of your subsidiaries follow local health and safety regulations if you work for a multinational apparel store with textile plants in Bangladesh,China, and Turkey. Even though a nation may not adhere to its own regulations, this does not absolve your business. Encourage candid communication with the executives of each company involved in your supply chain to ensure they are aware of the regulations and the potential legal consequences of disobedience.
Adhere to UN Directives
Create a required workshop for the leadership teams of your contractors to guarantee complete compliance with the three pillars of the UN’s Guiding Principles on Business and Human Rights:
- 1. Protect: By establishing “clear expectations for companies by enacting effective policies, legislation, and regulations,” businesses may safeguard human rights in their operations.
- 2. Respect: Take “due diligence” to detect, stop, and lessen violations of human rights.
- 3. Remedy: In the case that a violation occurs, victims should be provided with “access to effective remedies which are legitimate, accessible, predictable, equitable, transparent, and rights compatible.”
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Required Periodic Check-Ins
Include health and safety policies as a fundamental component of your organization’s quarterly check-ins. At the start of the year, don’t just check a box and let things happen as they happen.
Make sure that each jurisdiction in which you operate has a secure complaint procedure. Has anyone complained? Do workers at all levels feel free to voice concerns they believe should be addressed?
Employees’ ability and inclination to speak up may be influenced by cultural differences, as well as elements that influence the culture of your company as a whole. consciously support an organizational culture that rewards and promotes taking the safe route. Communicate the message down the chain starting at the top: When in doubt, bring it up. Make it clear to middle and higher management that reporting possible issues will not result in retribution or punishment. Conversely, you want workers to raise concerns for the company’s good.
A color coded complaint system, with green denoting no complaints, yellow, orange, and red denoting the most serious concerns, would be one way to do this. Leaders of multinational corporations must be notified about incidents at the orange level.
Organize quarterly town hall meetings that include management and all operational staff. Allow workers at every level of the chain to voice grievances on a regular basis, either in private or with dependable supervisors.
Set up planned, quarterly In person inspections at every operational site to verify compliance with health and safety standards and handle grievances. But don’t stop there. Obtain “Undercover” information to understand the true situation when regulators are not formally inspecting a workplace. Choose a reliable individual to report to executive leaders while working covertly in middle to top management.
In addition to being the ethical thing to do, putting business and human rights first is a wise business move. Due diligence done in advance can save millions of dollars, lives, and reputations. Establish a successful business while promoting the advancement of human rights and the global community by taking the lead and serving as an example for other multinational firms.
