19 Nov 20 | Podcast
Innovation Forum’s analysis of the best research into business and human rights
Banks’ compliance judged poor
The banking sector is proving slow to implement the UN Guiding Principles, according to a recent assessment by Dutch campaign group BankTrack. The watchdog organisation assessed the human rights records of 32 of the world’s largest banks. Out of a score of 0-12 for compliance with the principles, the average score amounted to only 3. Just half of the banks surveyed had formal human rights policies – one of the key requirements of the principles.
The consideration of human rights by 11 banks, including HSBC, Standard Chartered and Deutsche Bank, was judged “wholly inadequate” or entirely absent (as in the case of three of the four Chinese banks assessed). A total of eight banks, however, scored 6 points or more. Rabobank led the way (8 out of 12), closely followed by Credit Suisse (7.5 out of 12) and UBS (6.5 out of 12). BankTrack notes “significant progress” among this pioneer group. That said, most banks (17 out of 32) still fail to report on human rights in any substantive fashion.
“Extreme” human rights risks grows
The number of countries categorised as “extreme risk” in the Verisk Maplecroft’s influential Human Rights Risk Atlas is the highest in the ranking’s ten-year history. The leap from 20 to 35 countries is largely explained by increases in government repression, especially violations committed by state security forces against opposition groups and protesters.
Sharp deteriorations during 2014 are noted in Ukraine, Thailand and Turkey, while the situation last year in Equatorial Guinea, the Central African Republic and Djibouti also worsened considerably. Eritrea ranks worst of all the 198 countries analysed, followed by North Korea.
On a more positive note, the number of countries in the ranking’s highest-performing category also increased, rising from 42 in the 2014 Atlas to 47 in the latest edition. Countries entering this year’s ‘low risk’ category comprise Taiwan, Latvia, Lithuania, Uruguay and the Czech Republic. Improvements in public governance and active civil are among the reasons credited for their improved ranking.
Inequality identified as most important trend
Diverging incomes across the world are judged as the top trend for 2015 by global business leaders, according to a report by the World Economic Forum. Ranked second last year, income inequality topped other global trends such as unemployment, pollution and decreasing levels of democracy in the view of global business leaders surveyed by WEF. According to WEF, income inequality is closely linked to problems relating to gender, ethnicity, disability and other human rights issues.
The findings reflect the global attention garnered by UK charity Oxfam for its calculation that the world’s richest 85 people and the world’s poorest 3.5 billion people share the same combined wealth (of £1tn). Other stark findings from Oxfam’s recent research include: seven out of ten people living in countries where economic equality has increased in the last 30 years; and the richest 1% increasing their share of national income between 1980-2012 (in the case of 24 out of 26 countries for whom data is available.)
Figures for the United Nations are moderately more promising. The UNDP’s Human Development Report 2014 finds that the average inequality among the 94 developing nations studies is 19% for health (down from 23% in 2010), 27% in education (about the same as 2010) and 23% for income (up from 21% in 2010). The world’s most unequal countries across all development criteria are Latin America and the Caribbean (36%) and Sub-Saharan Africa (28%).
Sharp improvements in non-discrimination records
Two-thirds of the Fortune 500 now offers explicit gender identity non-discrimination protections, up from 3% in 2002 and 25% in 2008, according to the annual Corporate Equality Index 2015. The report, which is published by the Human Rights Campaign Foundation, also finds that one third of the Fortune 500 offers transgender-inclusive health care coverage. This is up from zero in 2002 and nearly ten times as many businesses as five years ago.
Meanwhile, eight in ten of the 781 US corporations that participate in the index currently offer education and training programmes that specifically include definitions or scenarios on gender identity in the workplace. A total of 366 of the index’s participants were judged 100% compliant with HRC’s requirements, up from a mere 13 when the index was first published in 2002. The list includes 89 law firms and 49 banks.
Eight breach FCPA rules
The US Securities and Exchange Commission registered eight enforcement actions under the Foreign and Corruption Practices Act during 2014. The largest fine was met out to global aluminium producer Alcoa, which agreed to pay $384m for a bribery case involving one of its subsidiaries in Bahrain. Another big settlements include beauty firm Avon Products, which was fined $135m for illegal payment in China, and electronics giant Hewlett-Packard, which had to pay $108m after admitting to improper payments by subsidiaries in Russia, Poland and Mexico.
Young and unemployed
Young people will continue to be disproportionately affected by unemployment, a recent global job forecast by the International Labour Organisation predicts. Almost 74 million young people (aged 15-24) were looking for work in 2014, putting the youth unemployment rate at almost three times higher than that of older workers. Youth unemployment is common to all regions globally and is occurring despite improvements in educational, thereby fuelling social discontent.
The tide is slowly turning, statistics suggest, with growth in job creation among young people averaging 0.6% per year between 2010 and 2013. Meanwhile, almost half of the world’s employed population are working in vulnerable conditions, the ILO claims. Most of these are women. South Asia and Sub-Saharan Africa are the worst performing regions, with around 75% of workers judged to be vulnerable.
East African bribes go unreported
According to the East African Bribery Index 2014 [http://www.tikenya.org/index.php/the-east-african-bribery-index], only 10% of east Africans that encounter bribery file a complaint. The main reasons for not reporting bribery include lack of information on where to report and suspicion that no action would be taken. The study, which is carried out by Transparency International, puts the likelihood of encountering bribery is 19.4% in Burundi, 19% in Tanzania and 17.9% in Uganda. Scores in Kenya and Rwanda are comparatively lower, at 12.3% and 2.9% respectively.