Business Law

Importance of Human Rights in Business and Corporate Law Firms

By Aditya Balaji

The world is a very diverse place that consists of billions of people belonging to different communities and groups such as race, religion, gender, culture, etc. The list is not exhaustive and is ever developing. This brings the further need to ensure that every individual is respected for who they are, a human being, and to be respected for their beliefs and their representations. The African Americans in the United States have fought for their freedom to abolish slavery and fought for their civil rights for decades. The effort by those who fought against such inhumane behavior against them is a testament to the cause of ensuring everyone be treated fairly and equally with respect and still do to be seen as nothing but a fellow human being. Women have for centuries fought against the patriarchal system and fight for the belief that they are human beings and are equal to men at the end of the day. Centuries of effort are paying off and their cause is growing even further as women all over the world have made great strides in every field and are leading the way and setting up great examples by breaking the stereotypical norms that were held against them. The members of the LGBTQ+ community have been gaining recognition for their movement and spreading the belief that to be human does not mean to be a particular member of a certain class or community but instead is the spirit of being self-determinant. Human rights so named appropriately such that it is a collective representation of humans and hinges on the belief that everyone is equal and deserves to be treated with respect. Every single person is free and is his own unique individual that deserves his or her or their freedom and this applies universally. The field of human rights ensures that every person has the right to life, liberty, equality, and dignity. These are the most basic rights every person is born with and are not based on any criteria for it to apply. Despite the progress that has ensued in the last 100 years, we still are not in a world where everyone is seen as equal and there are various people across the world who still fight for their basic rights to be recognized. The Jewish folks were persecuted and were treated to abysmal behavior by Nazi Germany during World War 2. They were hunted, killed, and were put in inhumane conditions by placing them in concentration camps and is probably the biggest example of human rights being violated and the need for human rights to not only protect people but also to ensure that there is harmony across the world. This clearly emphasizes the importance that human rights have across the world. There are various communities and organizations that work towards ensuring that people get treated right irrespective of who they are. The world we live in today lives in the notion that every human deserves to be treated with respect and is the reason for the era of peace we live in and is important since the movement of people across international lines has never been more than it ever was before bringing together different kinds of people all under the same roof.

The United Nations, with respect to the aftermath of World War 2 created the “Universal Declaration of Human Rights” in Paris in the year 1948 as a response to protect every single individual from going through any kind of oppression. The Document emphasized the freedom and the right every individual had with regards to life and freedom. It strictly banned acts such as slavery which restricts freedom. Various rights were mentioned that were to be provided by every state to its citizens regardless of their nationality and identity. Everyone had the right to economic opportunities, to own property, to have access to education, healthcare, to have opinions and choose their own religion and choose their nationality. Everyone’s freedom and privacy must be respected. Furthermore, each person had the right to be involved with the government. The respect guaranteed to people must also be provided to offenders as it is the utmost belief that everyone deserves basic human rights. The Universal Declaration of Human Rights paved the way for various countries to adopt their legal system to accommodate such laws. This was also one of the bases for the fundamental rights provided by the Indian Constitution and was the source of inspiration for it for the drafting committee.

The validity of human rights is not only applicable by the state and its citizens to each other but is also applicable to various business entities and their employees and workers. The most important feature of the 21st century is the raging capitalistic world that we live in. There are more companies in the world than one can easily count and therefore it is important that the employees of each and every company are treated with respect and with dignity. Some examples of providing human rights for businesses are providing proper wages to the workers, ensuring the conditions of work remain up to the health code in order to provide an appropriate working environment, providing pregnant mothers with maternity leaves, ensuring zero-tolerance policy towards discrimination, and so on and so forth. These are some fine examples of what type of human rights must be provided to the people in businesses. We often however keep hearing about businesses undermining their employees and exploiting them in order to improve the business such as Amazon disallowing unionization of employees to promote their capitalistic agenda or Apple running sweatshops in their factories where they make workers work for 6 days a week and mostly overtime in order to keep up with demand. These are just some of the examples of how businesses can have an impact on human rights. 

Keeping the aforementioned impact that businesses have in mind, the United Nations released a document aptly named “Guiding Principles on Business and Human Rights” which as the name suggests, states the responsibility that the State and businesses have on the rights of the people and the duty they have towards ensuring the right working environment that respects everyone rights. These Guiding Principles are grounded in recognition of the following:

  1. Existing obligations of states to uphold, preserve, and implement human rights and fundamental freedoms;
  2. The role of business firms as specialized organs of society performing specialized activities and subject to all applicable laws and human rights obligations;
  3. When rights and duties are violated, they must be accompanied with adequate and effective remedies.

These Principles apply to all States and businesses, both transnational and domestic, regardless of their size, sector, location, ownership, or structure.

These Guiding Principles should be interpreted as a whole and examined individually and collectively in light of their goal of improving business and human rights standards and practices in order to achieve practical results. Consequences for affected individuals and communities, as well as contributing to more sustainable future globalization that is socially sustainable. 

Nothing in these Guiding Principles should be interpreted as imposing new international law duties, or as diminishing or undermining any legal obligations that a State may have undertaken or been subject to under international law in the area of human rights.

These Guiding Principles should be implemented in a non-discriminatory manner, with special attention paid to the rights and needs of, as well as the challenges faced by, individuals from groups or populations that are at a higher risk of becoming vulnerable or marginalized, and with due consideration given to the different risks that women and men may face.

THE STATES’ DUTIES IN PROTECTING HUMAN RIGHTS

Its Foundational Principles are:

  • Third parties, especially businesses, must be prevented from abusing human rights within a state’s territory and/or authority. This necessitates establishing effective policies, legislation, regulations, and adjudication to prevent, investigate, punish, and redress such abuse.
  • States should make it clear that all businesses operating on their territory and/or under their authority must respect human rights at all times.

GENERAL STATE REGULATORY AND POLICY FUNCTIONS

In meeting their duties to protect, the State should,

  • Enforce laws that require business entities to respect human rights or have the effect of doing so, and examine the adequacy of such laws on a regular basis to close any gaps;
  • Provide good counsel to businesses on how to treat people with respect throughout their activities;
  • Ensure that other laws and policies controlling the formation and operation of businesses, such as corporate law, do not obstruct rather than facilitate business respect for human rights;
  • Encourage, and if necessary, oblige, businesses to communicate how they deal with human rights issues.

THE STATE-BUSINESS NEXUS

  • States should take additional steps to protect against human rights violations by businesses that are owned or controlled by the government, or that receive significant support and services from government agencies such as export credit agencies and official investment insurance or guarantee agencies, including requiring human rights due diligence where appropriate. 
  • States should encourage private firms with which they do commercial interactions to respect human rights.
  • When states contract with or legislate for corporate entities to offer services that may affect the enjoyment of human rights, they must exercise enough oversight to meet their international human rights commitments.

IN CONFLICT-AFFECTED AREAS, ENCOURAGING BUSINESSES TO UPHOLD HUMAN RIGHTS

Because the likelihood of egregious human rights violations is higher in conflict-affected areas, states should work to ensure that businesses operating in those areas are not complicit in such violations, particularly by:

  • Providing proper help to businesses in assessing and responding to increased risks of abuse, with a focus on both gender-based and sexual assault;
  • Engaging with business businesses as early as possible to assist them in identifying, preventing, and mitigating human rights-related risks in their operations and business partnerships;
  • Ensure that present policies, legislation, regulations, and enforcement mechanisms are effective in addressing the danger of business involvement in grave human rights violations.
  • denying a private enterprise that is implicated in grave human rights violations and refuses to participate in addressing the problem access to governmental support and services; 

ENSURING POLICY COHERENCE

  • States shall ensure that government departments, agencies, and other State-based institutions that shape business practices are aware of and comply with the State’s human rights commitments when carrying out their mandates, including by providing relevant information, training, and support.
  • When pursuing business-related policy objectives with foreign States or corporate firms, such as through investment treaties or contracts, states should maintain appropriate domestic policy space to meet their human rights duties.

When Participating in global organizations that deal with business issues, states should:

  • Seek to guarantee that those institutions do not obstruct or limit the ability of their member states to fulfil their responsibility to defend human rights, nor do they obstruct the ability of businesses to respect human rights.
  • Encourage those institutions to promote business respect for human rights and, where requested, to assist States in meeting their duty to protect against human rights abuse by business enterprises, including through technical assistance, capacity-building, and awareness-raising, within their respective mandates and capacities;
  • Make use of these Guiding Principles to enhance shared understanding and international collaboration in dealing with business and human rights issues.

THE CORPORATES’ RESPONSIBILITIES IN RESPECTING HUMAN RIGHTS.

Its Foundational Principles are:

  • The obligation of businesses to respect human rights refers to internationally recognized human rights, such as those enshrined in the International Bill of Human Rights and the principles governing fundamental rights enshrined in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work.
  • Human rights should be respected by businesses. This means they should avoid infringing on others’ human rights and remedy any negative human rights consequences they are responsible for.

The obligation to protect human rights necessitates that businesses:

  • Avoid generating or contributing to negative human rights consequences by their own actions, and respond to such impacts when they occur;
  • Attempt to prevent or reduce negative human rights consequences that are directly related to their activities, products, or services through their commercial partnerships, even if they did not contribute to those impacts.

Businesses, regardless of their size, sector, operating context, ownership, or structure, have a responsibility to respect human rights. However, depending on these circumstances and the severity of the enterprise’s adverse human rights impacts, the extent and complexity of the methods used to meet that responsibility may vary.

Business companies should have policies and practices in place that are appropriate for their size and circumstances to meet their commitment to respect human rights, including:

  1. A policy commitment to fulfill their obligation to respect human rights;
  2. A human rights due to diligence method for identifying, preventing, mitigating, and accounting for their human rights consequences;
  3. Processes that allow for the correction of any negative human rights impacts they generate or contribute to.

Its Operational Principles are:

Business enterprises should use a statement of policy to convey their commitment to meeting their obligation to respect human rights as the foundation for embedding this responsibility.

  1. Is approved by the company’s highest-ranking officials;
  2. Specifies the human rights expectations of the company’s employees, business partners, and other parties who are directly involved in its operations, products, or services;
  3. Is based on appropriate internal and/or external knowledge;
  4. Is publicly available and conveyed to all employees, business partners, and other relevant parties both internally and outside;
  5. Is represented in the operational rules and processes that are required to embed it throughout the company.

HUMAN RIGHTS DUE DILIGENCE

Business companies should conduct human rights due diligence in order to identify, prevent, reduce, and account for their unfavorable human rights consequences. Assessing actual and prospective human rights impacts, integrating and acting on the results, documenting responses, and communicating how impacts are addressed should all be part of the process. Due diligence on human rights:

  • Should cover any negative human rights impacts that the commercial firm may produce or contribute to through its own activities, or that its business partnerships may directly link to its operations, products, or services;
  • The intricacy of the situation will depend on the scale of the company, the possibility of severe human rights consequences, and the type and setting of its operations.
  • Should be ongoing, with the understanding that human rights risks may alter over time as the corporate enterprise’s operations and operational environment change.

Business enterprises should identify and assess any existing or possible detrimental human rights consequences with which they may be associated, either through their own operations or as a result of their business partnerships, in order to assess human rights risks. This procedure should include the following:

  1. Make use of internal and/or external human rights expertise;
  2. As appropriate to the scale of the business enterprise and the nature and context of the operation, engage in meaningful engagement with potentially affected groups and other relevant stakeholders.
  3. Business companies should integrate the findings from their impact assessments across key internal departments and processes, and take necessary action, in order to prevent and reduce detrimental human rights consequences.

Effective integration requires that:

  • The responsibility for dealing with such consequences is delegated to the appropriate level and function within the company.
  • Effective responses to such repercussions are enabled through internal decision-making, funding allocations, and oversight systems.

Appropriate action will vary according to:

  • Because the business entity is involved only because the impact is directly tied to its operations, products, or services through a business relationship, or whether it causes or contributes to an undesirable impact.
  • The scope of its power in dealing with the negative consequences.

Law firms are no exceptions to these guidelines. As mentioned by section 14 of the Guidelines, irrespective of the size, scale, and even sector. Therefore, law firms have an obligation to ensure that the human rights of each of their employees are respected. Some examples of such rights are proper pay grade, reasonable and defined working hours, extensive anti-tolerance towards discrimination, and an unqualified support system to the healthcare needs of its employees such as providing maternity leaves to pregnant women. Ensuring a safe working environment is equally applicable in the case of law firms. Efforts must be made to ensure issues such as these. As sexual harassment is tackled effectively. Ensuring that there is a structured and fair contract provided to its employees is equally important to furthermore, the responsibility doesn’t just extend to merely the employees, but there is a responsibility that extends towards the clients too. It is the responsibility of the firm to ensure that its clients are not involved in activities that expose them to liability for human rights violations. The clients are also at times those affected by inhumane conditions and treatment and therefore it becomes the duty of the firm to protect the client. The policies enacted by law firms must ensure that the practices conducted by them are fair towards employees and stakeholders alike. Law firms besides being a business are also an active entity that ensures that human rights across the world are maintained along with the state apparatus. They help in ensuring justice is served to those who are affected. This results in a two-dimensional effect where law firms are not only businesses that have a standard to maintain and responsibility but also play a key role in shaping human rights activism across the world by fighting for the rights of those affected through the legal system, which makes it an additional responsibility for them to take. Various law firms run on the motive of profit, however by taking on cases that are more oriented towards community service by fighting for human rights, various strides can be achieved.

Law plays as the link between the state and businesses in ensuring that human rights laws are enacted properly. The need for human rights to be enforced is growing day by day as the capitalistic world we live in progress further. There are still various states and businesses across the world that fall behind in providing freedom and respect to the people associated with them. Whether it is the issue of human rights abuse of women and migrants in Qatar, or the various businesses being involved in providing inadequate working conditions, the law can play an important role in these issues. When human rights are absolute and of utmost importance in law firms, their contribution in this field increases multiple folds.  Businesses tend to have a better image and perform better when their contribution to the community is a priority. The same applies to law firms and thus, law firms are a perfect example by which businesses can adopt various measures to protect the employees and those who have a stake with the firm by the virtue of being both a business and a driver of human rights change.

Business and corporate law firms have a duty to the state and the client to uphold human rights for the common good. Legal advice must incorporate human rights concerns to provide well-rounded counsel. This may be implemented in the following ways:

  • Risk Management: Corporate and business lawyers often have to formulate and assess risk management policies for companies. They have to be prepared to advise companies on internal compliance mechanisms to oversee their human rights risks. From fair wages and working conditions to discrimination and forced labor, corporations must secure the human rights interests of their employees through their policies. Amnesty International provides a human rights checklist for businesses which includes a company-wide human rights policy, state, and private security, community engagement, health and safety, and active monitoring of human rights within the company. Similarly, legal advice must introduce such policies for effective risk management. 
  • Transparency: Greater transparency of businesses is increasingly demanded by public disclosure laws and public-interest watchdogs. Legal advice needs to incorporate transparency as an important human rights ethic. Legal obligations of transparency arise out of legislation such as the companies act in India. International trends of transparency required by stakeholders should be considered as well. Indian companies ranked first for business transparency among emerging markets and countries. Business ethics of transparency should be considered by lawyers while providing counsel. 
  • Litigation: Businesses are increasingly vulnerable to human rights complaints, forming a major aspect of client advice. Company olives should ideally be formed in accordance with international law and norms on human rights. Alternate dispute redressal mechanisms both within and out of the company should be utilized as a non-judicial remedy. Legal advice must include the operational redressal mechanisms and the expense and effectiveness of the same.
  • Contracts: Human rights may be encouraged by introducing them within contracts, ensuring fair working conditions, and anti-discriminatory policies of the company. Human rights clauses within the contract to prevent child labor and forced work may aid in preventing tragedies such as the Rana Plaza collapse in Bangladesh in 2013, which lead to the deaths of more than 1000 people due to the human rights abuse of the textile industry. However, if human rights clauses become boilerplate, they lose their purpose of providing awareness to the employee and protecting of companies from unauthorized risks. 
  • Developing Standards: International and domestic trends of human rights require legal advice to incorporate human rights risk to businesses. These standards set by lawyers will eventually become a part of the global standard and change industries. The standard of due diligence develops over time and policies must develop to reflect the same. 

Therefore, human rights play a very important role in the relationship between corporate law firms, states, and businesses. International law and norms encouraging human rights need to be incorporated within domestic policies of businesses and the law firms that advise them. The importance of human rights results in legal and ethical implications for corporate and business law firms. 

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