4.4 Business and human rights

On 16 June 2011, the United Nations Human Rights Council (UNHRC) endorsed the Guiding Principles on Business and Human Rights. These principles advise on how to implement the 'Protect, Respect and Remedy' Framework, adopted in 2008 by the UNHRC. With the framework and guiding principles, the United Nations has articulated global societal expectations about business's responsibilities to respect human rights and provided guidance on how business should go about delivering on those responsibilities.

In brief, the three principles can be summarised as:

  1. Policy commitment—how governments should provide greater clarity of expectations and consistency of rules for business in relation to human rights
  2. Human rights due diligence—how companies should respect human rights and be able to show that they are doing so
  3. Remediation—that there should be access to remedies for people who are harmed in any way by business activities.

Being held responsible for human rights may seem to some companies to be asking them to become involved in something well outside their normal sphere of operation and that is dealt with by foreign governments, non-government organisations and the United Nations. In fact, the expectations of the UNHRC framework do not require extraordinary behaviour from any company that is already behaving ethically and transparently. Indeed, 'human rights' covers many very ordinary protections that are the normal business of any modern company, such as engaging with the community, ensuring full and consultative participation, dealing with complaints with due process and transparency, providing decent working conditions and taking measures to preserve the environment and cultural heritage.

When companies and their employees realise that they are already respecting a range of fundamental human rights, the prospect of considering all their human rights impacts and risks no longer seems daunting. Footnote 13

In addition, according to the UNHRC framework, due diligence must be paid to the behaviour of the partners and suppliers of business to ensure that they, too, are respecting human rights. To do that, it may be necessary to perform a thorough audit of the company's or project's supply chain, especially if some supplies or services are provided from outside Australia. The Global Freedom Network announced an agreement between the Catholic and Anglican churches and the Sunni Islamic faith to put an end to modern slavery by 2020. Andrew Forrest, Chairman of Fortescue Metals Group, explained that he had been motivated to initiate the network when, through an intensive audit of his Western Australian iron ore operations' supply chain, he discovered instances of slavery in factories making parts for Fortescue in Asia Forrest urges all companies to undertake such an examination of their own suppliers to ensure that there are no similar instances of hidden human rights abuses contributing to their business success. The Global Freedom Network announced that it intended to recruit 50 major corporations to join its pact in its first year of operation, so attention to human rights matters in business is likely to retain a high level of international focus in the near future. Footnote 14

Companies need also to ensure that their security personnel, in Australia and elsewhere, perform their duties in accordance with human rights principles. This will be more applicable for mining projects offshore than in Australia. The Voluntary Principles on Security and Human Rights (VPs) are a set of principles designed to guide companies in maintaining the safety and security of their operations within an operating framework that encourages respect for human rights. Key benefits are best-practice operational guidance, risk reduction and reputational enhancement. Extractives companies can use the VPs to encourage high standards of conduct by security forces, and to have a positive impact on local governance, peace and stability. Footnote 15

As the major representative body for Australian mining companies, the Minerals Council of Australia (MCA) joined forces with the United Nations Global Compact Network Australia in 2013 to produce a publication on human rights and the Australian mining industry (GCNA/MCA 2013). The case study below is taken from that document and describes how BHP Billiton introduced a human rights approach across its operations globally. Footnote 16

Case study: Implementing a human rights approach in global mining operations—BHP Billiton

In 2010, BHP Billiton updated its community standard in response to the UN 'Protect, Respect, Remedy' framework to include a requirement for each operation to undertake a human rights impact assessment (HRIA) as the first step of the human rights due diligence process. The company strongly believes that respecting and promoting human rights is not only aligned with its charter values and code of business conduct but is also the key to responsibly gaining access to natural resources and maintaining its social licence to operate, and therefore essential to business success.

Since then, all operations have been required to assess their performance against the articles of the Universal Declaration of Human Rights, the UN Global Compact principles and host-country legislation governing human rights. HRIAs must be validated through an engagement process with stakeholders, verified by a qualified expert if in a medium- to high-risk country, and repeated every three years. HRIAs must also be internally reviewed each year to ensure that any operational changes have not resulted in changes to human rights impacts.

Where an HRIA identifies a material risk, BHP Billiton requires that a human rights management plan be developed and implemented. In this context, risks are considered material if they meet or exceed a certain threshold, as defined by the company's internal risk methodology. The plan includes a component to provide training that relates to the relevant human rights commitments for all relevant employees and contractors.

BHP Billiton embedded stand-alone HRIAs within its existing management systems. Melinda Buckland, the company's Senior Manager Community Relations, commented, 'We found that an effective way to raise awareness and integrate the HRIAs into our existing processes was to incorporate the new requirement into senior management KPIs'. This meant that managers had personal incentives to ensure that the HRIAs and management plans were completed. It also placed the management of human rights issues on a par with other performance measures, rather than leaving them to look like an optional extra. In BHP Billiton, management KPIs change each year so, while human rights might not appear in individual scorecards each year, operations are audited against the requirement on an ongoing basis.

Key challenges, outcomes and lessons learned

All BHP Billiton's global operations have undertaken HRIAs, enabling the company to identify key lessons and extract maximum value from the HRIA process.

1. Ensure human rights expertise and seek an independent view in HRIAs

Whether HRIAs are delivered in-house or by external consultants, BHP Billiton has found that human rights subject matter expertise and experience are critical to effective assessments. Further, verification by an independent expert can ensure that the assessment is objective and increases the outcome's credibility. BHP Billiton found that the process and outcomes of an HRIA can be quite different, depending on the type of organisation engaged to do the work. HRIAs that took a compliance-based approach were considered less valuable and seemed to fall short of the next step, which is to make practical recommendations on possible actions to address identified gaps. The same was true for HRIAs undertaken by organisations that did not have deep human rights expertise.

2. Demystify human rights and make the HRIA practical and relevant

In undertaking HRIAs, a challenge can arise when participants have a limited understanding of human rights and do not readily understand how they manifest in business contexts, particularly in developed countries such as Australia. In such cases, meaningful internal engagement across management levels and disciplines can help to realise the significant learning and capacity-building opportunity presented by the HRIA process. BHP Billiton found that the HRIA processes that were most effective were educative and used familiar language to discuss topics such as community engagement, diversity, non-discrimination, health, safety and cultural heritage, rather than using the terminology in the articles of the Universal Declaration of Human Rights.

3. Manage the challenge of knowledge transfer when outsourcing HRIAs

Given the opportunity for learning inherent in the HRIA process, explicit opportunities for knowledge transfer from an external consultant to the company and among the company's functions should be identified and developed. For BHP Billiton, this was a missed opportunity in some of the initial HRIAs, for which external consultants did not collaborate sufficiently with staff on the process, or key internal staff left the company without passing on their experiences.

4. Use HRIAs to mitigate risk and improve relationships: 'you don't know what you don't know'

BHP Billiton benefited from engaging external stakeholders in direct conversations about human rights, giving them an opportunity to share their views and experiences in a way that might not occur through other company processes. In one instance, an HRIA process in which an exploration project team was involved shared insights they gained during the HRIA engagement. Even though they had striven to create open and strong relationships and had a local grievance procedure in place, the HRIA process uncovered some issues that people either did not think were relevant or had not felt confident in raising previously. In that instance, the HRIA provided an early warning and risk mitigation opportunity. It helped identify and subsequently manage issues that could have become serious and escalated over time.

5. HRIAs are possible for small projects

After completing the company's first few HRIAs, and noting that they can be resource intensive, BHP Billiton was concerned about the feasibility of HRIAs for exploration projects, given that such projects typically comprise small teams of mostly geologists. To address this issue, BHP Billiton's exploration section engaged consultants to design a simple HRIA process in the form of a practical self-assessment tool that met the intent of UN Guiding Principle 18 and could be delivered internally by a small team. As a result, BHP Billiton has successfully used the tool for projects in Western Australia, Zambia and Ethiopia since 2011.


BHP Billiton has demonstrated that the due diligence element of the corporate responsibility to respect human rights can be incorporated into existing processes and management systems through stand-alone HRIAs.

Source: GCNA-MCA (2013).


Footnote 13
For a fuller discussion of these matters, see GCNA/MCA (2013).

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Footnote 14
See http://vaticaninsider.lastampa.it/en/world-news/detail/articolo/ecumenismo-ecumenism-ecumenismo-32780/ accessed 18 March 2014.

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Footnote 15
Further information can be found at http://www.voluntaryprinciples.org/for-companies/.

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Footnote 16
This case study is summarised from pp. 17-23 of The Australian Minerals lndustry & Human Rights: Managing Human Rights Risks and Opportunities through the UN Guiding Principles on Business and Human Rights. (GCNA-MCA2013), where more detail is available.

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