Human rights aim to give all people around the world the opportunity to live a decent life. They govern the right to life and survival, which means the right to food and shelter, protection for the family, the right to education, the right to their innermost thoughts and beliefs, freedom from torture and slavery, as well as freedom of expression. Companies may not cause, contribute to or be associated with human rights violations. They shall also work to prevent violations and resolve any adverse impact.
In Sweden’s “National Action Plan for Business and Human Rights”, you will find more information concerning the UN’s general explanation, including reports on human rights communicated by Sweden’s Department of Foreign Affairs (reports Swedish only). You can also find more information on the United Nations’ website.
Sweden and the EU has legislation that protects human rights, but in order to minimise the risk of negative impact in other parts of the world, companies have an obligation to comply with international standards and guidelines regardless of their location of their operations or where business relations are conducted. Many companies are currently active in countries where democratic rights are infringed on or suppressed. Managing operations in these regions is complex and can pose challenges for Swedish companies. On the one hand, they might risk supporting undemocratic social structures, but on the other they can contribute to job creation and open up channels of dialogue regarding democratic rights.
In order to minimise your company’s risk of violating human rights it is important to be aware of the situations in which risks may arise. Below, Business Sweden highlights a few business situations where companies are likely to run the risk of violating human rights. These risks may be greater depending on the industry and the geographical area in which companies operate. Please note that the list is not complete.
Under the section working conditions, you will find information about forced labour, child labour, the right to union representation and the right to non-discrimination. While these issues fall into the category of human rights, we have chosen to follow the UN Global Compact structure, meaning that they are treated as topics under the category working conditions.
Risks in business relations
Smuggling and human trafficking
Certain industries and geographical regions may be more vulnerable to smuggling and human trafficking than others. Transports and commodity flows are used by criminals to smuggle drugs, tobacco, weapons or other illegal goods. This can happen without the company responsible for transportation noticing it. Information about smuggling can be found at the Swedish Customs Office and AEOS Security and Protection.
To prevent criminals from using your transport for smuggling, you should have clear established policies with all partners and employees. All seals on transport documents should be carefully checked while fully cooperating with customs. You must also pay attention to the origins of the goods and ensure that they carry required certification.
Human trafficking is a global problem. Companies in the transport and tourism sectors, as well as those operating in vulnerable countries, should take this risk into consideration in their analyses. For example, there may be a risk that hotels and transport services are being used by criminal groups, or that the company’s employees are exploiting sexual services. In some industries, such as household services, factories and agriculture, forced labour may be a risk. This is detailed further in the section on working conditions. You will find more information on human trafficking at: UNODC.
Extraction of natural resources
When establishing your business in a new market and possibly using land and natural resources from the area, it is important to take the local inhabitants into account, as well as the country’s indigenous populations so that the company does not run the risk of violating their values, rights and cultural or religious traditions and interests. More information can be found at the ILO’s web-page, “Indigenous and tribal peoples”.
When choosing a supplier of raw materials, it is important to consider where the raw materials and products have been sourced from. There may be a risk that they are being extracted, hunted or fished illegally or unethically. You can also refere to “Smuggling and human trafficking” above.
A subject that is discussed extensively in political debates is “conflict minerals” which may concern minerals that are found in smartphones, for example, computers or home appliances. Many of them are extracted in Congo-Kinshasa and neighbouring countries, where guerrilla groups control the mines. Trading in these conflict minerals helps fund armed groups, thus leading to a worsening of conflicts that have been going on for many years.
A new EU law has been adopted by Parliament that will force companies importing and refining minerals to report which mines and smelting plants the minerals come from. The new requirements are expected to come into force from 1 January 2021. More information about the new law can be found at the European Parliament website.
Tax evasion and capital flight
According to OECD estimates, between four and ten per cent of corporate income tax is lost globally through tax evasion each year. Tax evasion and capital flight blocks development and welfare throughout the world, but developing countries are hardest hit.
Tax avoidance often happens in grey zones where the act itself is legal but in direct violation of the spirit of the law. For example, by moving money between a business group’s various entities, profits from a developing country can vanish into a tax haven. Unethical tax planning also means that some people are deprived of their fundamental rights, such as healthcare, schooling and care for the sick and elderly. More information can be found at Forum Syd.
Poor quality products may, in themselves, constitute a risk of human rights violations. Your company always has the obligation to ensure that products are safe and do not pose risks of injury to anyone in the customer group, particularly with regard to electronic and other consumer goods. It is important to comply with laws and regulations when it comes to labelling, manuals and safety tests. Although some countries do not require certificates or product testing, companies nonetheless have an obligation to ensure that product are safe for use before being sold on the market.
There may also be a risk of counterfeit products where the quality and content do not match the original, which is especially hazardous for products such as pharmaceuticals where the consequences can be devastating.
For certain products, there are clear laws about which markets they may be sold into, for example war material and dual-use items. More information about this topic can be found at Inspectorate of Strategic Products (ISP) and at the Swedish Export Control Society. Even if you do not sell ‘sensitive’ products, you should pay attention to the identity of the customer and the end customer so that the products do not end up in the ‘wrong hands’ and risk violating human rights further down the value chain.
More concrete examples of risks may be found in the guideline documents to the right.
To avoid the risk of violating human rights, companies should take the following steps:
- Follow established laws and international guidelines. Ensure that you understand the meaning of national laws related to human rights in the countries in which you operate. At the very least, you should always follow international guidelines. This is particularly important where the legislation is inadequate or non-compliant.
- Include human rights in your analysis of opportunities and risks. Review your company’s performance to determine whether there is a risk of human rights violations and, if risks are found, pinpoint the specific problem areas.
- Make use of national and international guidance tools (see guideline documents on the right).
- Have a clear policy with regard to human rights, meaning: your attitude towards human rights violations and how you will respond if you detect such violations. Read more in step 2 and 3.
- Communicate the policy in the company's code of conduct and use training to educate all employees on the topic. Read more about this in steps 3 and 4.
- Collaborate and discuss with organisations and NGOs in the markets which the company operates in, such as Human Rights Watch and Amnesty International. This is particularly important in high-risk countries and regions.
- Using ‘due diligence’, carry out a thorough business inspection of your potential business partners before making critical business decisions.
- Educate and inform your partners about laws, risks and the company’s code of conduct. Read more about this in step 4.
- Communicate your policies clearly to suppliers and request that they do the same with their subcontractors. Read more about this in step 4.
- Implement a whistle-blower function where employees and partners can report any suspected shortcomings. Read more about this in step 4.
- Carry out audits of your business and of your partners with the help of qualified experts. Read more about this in step 4.
- Contact Business Sweden if you have any general questions about sustainability or if you want to know more about the risks and opportunities in a particular market.