The Nexus between Corruption and Human Rights

15th September 2020

Business should always avoid adverse human rights impacts.

During a crisis business has a heightened responsibility to respect human rights. It’s time to progress both a business and human rights agenda. This was the clear message at the United Nations Global Compact Network Australian Dialogue on Business and Human Rights I attended on the 25th August.

Change is afoot, but too slowly. While governments have a responsibility to protect human rights, business has a responsibility to respect human rights, and people whose human rights are violated, for example, in the course of business activities have a right to remedy.

In 2008, the United Nations “Protect, Respect and Remedy” Framework for Business and Human Rights provided a conceptual and policy framework to anchor the business and human rights debate. Following this, the United Nations Guiding Principles on Business and Human Rights (UNGPs) provided the first global standard for preventing and addressing adverse impacts on human rights. These principles continue to be internationally accepted as providing a roadmap for businesses.

The Covid-19 crisis has refocussed attention on supply chains, their fragility, and risks to decent work. But there is a bigger story, more than Modern Slavery, which is just a part of the business and human rights dialogue. Now more than ever businesses need to ramp up risk-based due diligence – to identify, avoid and address impacts associated with business supply chains and relationships. Now more than ever business need meaningful stakeholder engagement to promote responsible business conduct and hold those in power to account.

But there remains a missing piece in the global dialogue – an understanding of the nexus between human rights and corruption. 

Corruption undermines the basic safeguards that ensure people live with dignity, freedom, equality, justice, and peace. We know that corruption is arguably one of the biggest obstacles to the realisation of human rights and the Sustainable Development Goals. Corruption in and of itself may not be a violation of human rights. But corruption has consequences that affect human rights. It undermines good government, distorts public policy, frustrates business opportunities and leads to waste, mismanagement and exploitation.

Human rights violations by businesses are not gender neutral, and neither is corruption. It impacts disproportionately on the most marginalised, especially women and girls. The nexus between human rights and corruption needs to be better understood, talked about and addressed. Corruption, including corruption in the private sector, undermines the full realisation and enjoyment of human rights.

This year’s dialogue focused on the issue of respecting human rights in times of crisis.

The dialogue included discussions on inclusion and reducing inequalities, climate change, engaging Indigenous peoples and business integrity. These issues all intersect with corruption risks. But again it became clear there is more work to be done to build an understanding among diverse stakeholders of actions needed to address the corruption and human rights nexus. This is particularly important in times of global crisis.

The take-away was clear – we need to step up both discussion and action in response to how corruption not only leads to violations of specific human rights, but also represents a structural obstacle to the implementation and enjoyment of all human rights.

Many issues discussed intersect with the issue of corruption in the private sector. 

Speakers recognised that the issue of gender equality in business was gaining traction globally, an issue that had previously been put in the ‘too hard’ basket by many companies. The discussion highlighted the importance of fostering a ‘call out’ culture, and how some Australian businesses are stepping up and undertaking gender analysis work.

The nexus between gender and corruption is an area being increasingly explored by TIA in our projects and embedded within our advocacy. The TI global movement have also recently published a report on gender, particularly exploring the issue of sexual extortion. The private sector needs to take responsibility for the adverse impacts their operations can have on women and girls. Understanding the link between gender and corruption will help companies demonstrate responsible business conduct and respect for human rights.

Businesses can provide innovative responses to global challenges, and they do not need to wait for government’s lead. 

Corruption undermines the basic safeguards that ensure people’s human rights are respected. Climate change has the potential to aggravate these existing threats to human rights posed by corruption. The dialogue highlighted that a large proportion of the private sector in Australia is sending a clear message that they want to be innovative and invest in renewal energy technologies. They do, however, need the government to provide leadership in setting long term strategies to ensure these companies are not disadvantaged in the future for these investments.

This idea that the private sector can be more proactive and drive change is applicable to business’s anti-corruption efforts. Covid-19 has demonstrated how agile businesses can be. These learnings should be applied to their efforts in responsible business conduct. The crisis has created the need for businesses to add additional grievance mechanisms for their supply chains and build the capacity on the ground to combat corruption.

The Covid-19 crisis should be a time to reflect on the nexus between human rights and corruption. It should encourage businesses to work on long term solutions to address corruption, rather than short term quick fixes.

The importance of CEO and board advocacy on responsible business conduct and respecting human rights.

The dialogue highlighted the importance of strong leadership from the top, including a clear articulation of organisational culture and values. It was suggested that for the most part the private sector remains reluctant to position their responsibility to respect human rights in strong human rights language – preferring instead to frame their responsibility through a social licence lens. Businesses should not be afraid of using human rights to assess the impacts of their business. Acting responsibly and respecting human rights is the best way gain and to make a positive contribution to the Sustainable Development Goals.

Promoting human rights framing and language to senior leadership was suggested as a way to ensure that businesses are regularly reflecting on the human cost of their operations – and that means any adverse impacts both caused and contributed to, either directly or indirectly through supply chains and business relationships. Due diligence is now more than ever being seen as externally focused, considering the risk of adverse impacts on people, rather than just the business’s bottom line. Inadequate risk-based due diligence opens the door to abuses of human rights.

Robust due diligence will strengthen business integrity and anti-corruption efforts. It will help companies to understand the nexus between corruption and human rights. And if acted upon help to avoid the devastating impacts both have.

Business, multi-lateral institutions and civil society must give greater consideration to the nexus between corruption and human rights.

Companies need to consider the country and local contexts of their partners and supply chains, for corruption challenges they may pose. They need to consider how those might shape the human rights impacts of their day-to-day operations. In order to “know and show” that they are meeting this responsibility, businesses need both a corruption and human rights due diligence process, whereby they identify, prevent and address their adverse human rights impacts. This will add to the important work that some businesses and governments are already undertaking on modern slavery compliance.

This is the only way to ensure full realisation and enjoyment of human rights and help tackle corruption.

Photo credit: International Rivers