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Mark Moody-Stuart on Business and Human Rights


Presentation by Sir Mark Moody-Stuart, Chairman, Anglo American plc, to the UN Secretary General's Special Representative on Human Rights and Business' (John Ruggie) consultation on Human Rights and the Extractive Industries
(Geneva, 10 November 2005)

Let me start by saying that, like John Ruggie, I am not a lawyer. Neither does what I am going to say necessarily reflect the views of any one company or business organisation. These are my personal views based on about forty years of connection with the extractive industries, living and working in nine different countries and visiting operations in a further twenty five or so countries. In discussing human rights, I certainly recall that today is the tenth anniversary of the execution of Ken Saro Wiwa in Nigeria, reminding us that this in some cases this is truly a matter of life and death.

The responsibilities of governments

Before going on to address the responsibilities of companies for human rights, we should remember that governments bear the prime responsibility for ensuring the human rights of their people. They have subscribed to that great foundation document, the Universal Declaration of Human Rights. That is not to absolve all of us, individually and collectively, whether we work for companies or organise ourselves in other groupings, from playing our part in the delivery of the aspirations of the Declaration. But it is national governments who establish the laws which ensure that human rights are protected and promoted in their countries. Only national governments, and in some cases governments acting collectively through the United Nations, have the right to apply forms of coercion when individuals or groups fail to respect the human rights of others. The rest of us do so out of morality, social or commercial pressure, or ultimately in response to the courts or the forces of law and order. There are occasions when the demands of 'campaigners' for greater corporate accountability in relation to human rights seem to have given up on holding governments to account and see companies as much softer targets.

The extent and limits of corporate responsibilities - the onion skin approach

What are the special responsibilities of companies? And are there any special considerations for the extractive industries?

The core of the onion

Clearly companies and the individuals who form them do not bear responsibility for the human rights of everyone in the countries in which they operate, any more than any other individual or group in the country does. But how can we draw lines? I believe that the answer lies in recognising a gradient of influence or responsibility, working out from a core and layered like an onion. Companies have a clear and prime accountability for the human rights of their employees. This applies in principle while at work, but almost inevitably involves an interest which extends to areas or conditions outside the workplace which affect their wider rights. Absolutely critical is health and safety at work, but in the workplace this also covers matters of fair and equal treatment, fair remuneration, rights of association, freedom of expression, rights to privacy, rights to practice religion and so on. This is the core of the onion.

The bulk of the onion

Companies also have prime accountability for the impact of their operations and products on surrounding communities and customers. The responsibility is to ensure that negative effects of operations - in relation, for example, to land use or availability of water - are avoided or fairly compensated. To achieve this, meaningful consultation with potentially affected parties is essential. This clear responsibility may then extend in a spirit of good neighbourliness and co-operation to looking at other benefits. This extension is essentially driven by mutual self interest and an interest in long term good relations rather than by protection of human rights. I think in this discussion today it will be helpful to try and distinguish between ensuring that rights are protected - and additional voluntary activities which may be carried out. The former would properly be the subject of national legislation while the latter would not - except in so far as it forms a special form of taxation.

Companies have important responsibilities for conditions of work in their suppliers and contractors and a wise company will work together though contractual agreements to ensure that their own standards and principles are met, whether or not the activity is carried out on its own site of operations. But again, the prime accountability for working and other conditions has to remain with the supplier or contractor. If I buy gasoline or chocolate from a company or shares in that company, as a responsible citizen I should endeavour to make sure that the company concerned is behaving responsibly and not infringing the human rights of others, but few people would doubt that the accountability for the behaviour of that company remains with the company and its people. As I said, a wise company will do its utmost to ensure that proper conditions, in line with its own standards and those expected of it by its shareholders and customers, are observed. As major buyers or as the granter of a contract, companies have the possibility of obtaining more information and exerting more influence on suppliers and contractors, but the ultimate accountability does not shift. However, a responsible company will take steps to ensure that appropriate standards are included in the contract and will terminate the contract if these cannot be met. The same is true of partnerships, non-managed operations and minority shareholdings. In many developing countries, in order to enable local contractors and suppliers and indeed partners to meet these standards, a period of training may be necessary with the contract terms allowing for this in some way. These are the solid parts of the onion, which together make up much of the impact which major corporations have on human rights.

The outer layers of the onion - loosely attached and not always clearly defined.

Lastly, consider the case of a country in which human rights abuses are taking place which do not involve the company's activities, its own employees or contractors or the neighbouring communities, but are more remote. I believe in such cases, indeed in any country, a company has a responsibility to express support for fundamental human rights. But how it does this is critical. A company has to use its influence, but to use it in a way that is likely to be effective and not counter-productive. A way into the discussion is often through seeking to ensure that a company's standards apply to its partners, including government owned companies where these are partners. I have had such discussions in several countries, in Africa, the Middle East and Asia. I have discussed human rights with the speaker of the Saudi Majlis - incidentally at his request. On the other hand, a former Secretary General of Amnesty International once suggested to me that it was my (and Shell's) responsibility to raise with the US government the issue of the death penalty in the US. Although I personally am opposed to the death penalty, and would vote against it in my own country, and would express this opinion if asked. I do not think that our corporate responsibility extends to this. The question of when and how to raise broader human rights issues with governments is a very difficult area. To give some examples, I have had involvement in raising with various governments in different continents the operation and behaviour of security forces (regrettably fairly frequently), the release of imprisoned union officials, relocation of communities and restrictions on population movements, the imprisonment on religious grounds of an employee for non-work related activity, the imprisonment of a sacked minister, the requested dismissal of an employee for political activity and the imprisonment of members of a community for activities not directly related to our operations. In most, though regrettably not all, cases the desired outcome occurred, although it is difficult to say whether or not this was due to the intervention .

In many, though not all, cases the intervention is a private one. Many governments do not relish being given advice in public. It is encouraging that many human rights organisations are happy to give advice and support to companies behind the scenes rather than demanding publicity. There is an additional factor which makes such interactions complex. This could be called the dilemma of dining with the devil. The likelihood of persuading a minister or head of state of the merits of accepting advice depends on the establishment of genuine human interaction. A company has limited leverage. It has to consider the fate of its national employees and the large fixed investment involved in most extractive industries is not mobile and is potentially subject to expropriation. In the absence of a coercive force, most of us are more likely to accept advice from those who we feel understand us or understand our predicament. Achieving or maintaining such a relationship may be very uncomfortable in some situations, and leads to individuals feeling great personal stress and potentially compromised. This is the outermost and most flaky skin of the onion.

Common human rights challenges for corporations

Although most challenges relating to corporations in the human rights fields apply to all companies, some are particularly common in relation to extractive industries and in developing countries. These are corruption, revenue distribution or allocation, employment equity, personal security, artisanal mining, resettlement and union activity. Of these only artisanal mining is truly unique to mining.


Corruption is essentially a means of depriving other people of their equitable rights by tilting the balance in favour of certain individuals or communities. In societies where corrupt practices are widespread, great vigilance is required to make sure that such matters as recruiting, of access to redress, of payment of compensation and even promotion are not corrupted. This is as important to long term corporate success as transparency in payments to authorities. Transparency throughout all processes is essential. Support for collective initiatives such as the Extractive Industries Transparency Review should be whole hearted, and should lead as soon as possible to its extension to other relevant industries and in the government use of funds - including sub-regional redistribution arrangements.

Revenue distribution

Transparency in the usage by governments of revenues is important, but equally important is the equitable distribution of revenues. This is particularly so in the case of revenues from the extractive industries, where one section of the population or area may feel that it "owns" the resources or is particularly impacted by the extraction. There can be no "one size fits all" solution to this. A feeling that the government genuinely represents the interests of all members of the population is critical, but there will always be differences of opinion which only a government can resolve. Considerations will involve land tenure, including in some cases aboriginal rights and history, and also often ethnic divisions. Companies can offer advice and opinions, and take steps to ameliorate feelings of injustice, but the ultimate decision has to be with the government. Oil companies in Nigeria for many years supported appeals for greater revenue allocation to oil producing areas, but the real problem was often as much the lack of transparent and effective application of a formula as with the formula itself. I believe that it is incumbent on companies to participate actively and supportively with other parts of society in local or national consultative bodies which aim to agree priorities and objectives, advise on equitable allocation and improve governance. However, the prime responsibility remains that of government. There is no doubt that failure to achieve wide agreement leads to discord, potentially civil strife and possibly human rights abuses.

Employment equity

One might think that employment equity was one of the relatively easy goals for a well-run company to achieve. However, few countries are ethnically uniform and it is unlikely that history, colonial or otherwise, has impacted all groups equally in matters of employment, education and wealth distribution, let alone matters of gender equity. Governments often introduce regulation to correct past injustices. This can lead to positive discrimination and pressure on meritocratic sytems. Equally some governments apply pressure to discriminate against perceived political opponents. Companies need to maintain very clear and transparent processes to avoid injustices.

Personal security

The personal security of all its people is an overriding responsibility of any corporation. Care should also be taken not to endanger in any way the security of neighbouring populations. Taking appropriate precautions and judging when levels of risk become unacceptable is a major task for management in consultation with appropriate authorities. Security may be threatened if other issues which may give rise to conflict - such as equitable distribution of revenues - are not adequately addressed. In cases where it is necessary to employ security guards to safeguard personal or property security, it is essential that these be properly equipped and trained and subject to proper rules of engagement. The Voluntary Principles on Security and Human Rights, supported by four 'home' governments, six NGO's and some sixteen companies in the extractive industries are an excellent starting point and should be subscribed to by any company, extractive or not, which operates in countries where security is a concern. The Voluntary Principles address risk assessment and the complex issues of relations with public security forces as well as those of private security forces. They rest on a foundation of what might be termed 360 degree risk assessment, whereby companies should engage effectively with local communities in drawing up their security strategies so as to understand better the dynamics of conflict and potential conflict situations. In relation to public security forces they reduce the risk of a company becoming unwittingly complicit in local human rights abuses.

Artisanal mining

Artisanal mining for the most part involves the mining by individuals or small groups of relatively near surface deposits of precious or semi-precious minerals and metals, although in some cases it may involve the small scale collection of coal or ores, such as iron ore. The sector is often a major source of employment, but often with very poor working conditions and poor environmental and safety standards. It is also often unlicensed and illegal, and in some areas is the major source of funding for militias, leading to severe human rights abuses through forced labour as well as the activities of the militias. In addition there are often territorial clashes between artisanal miners and indigenous groups.

Interaction between industrial miners and artisanal miners is often limited, or controllable through normal security measures, but implementation by governments of sound policies in relation to artisanal miners is very much in the interests of the industry. Governments naturally seek to channel the products into formal channels to prevent the diversion of government revenue. In some cases mining companies may be able to take the product of artisanal miners for industrial processing, thus eliminating the grave environmental consequences and chemical spillage of small scale processing which would otherwise probably be subsequently blamed on the industry. Both approaches can lead to problems. Removal of small scale miners by the authorities can lead not only to loss of employment, but to potential human rights abuses as desperate people struggle to maintain their living. Use by major miners of artisanal produce may lead subsequently to claims of exploitation or taking advantage of low cost labour working in unsafe conditions. The problem is one which would benefit in every country where it is an issue of collaborative work by government, companies, labour organsiations and NGOs to develop and apply solutions. Such collaboration on an international scale has borne very useful fruit in the Kimberly Process for diamonds.


In the process of building infrastructure such as roads, or major processing plants or mines, it is sometimes necessary to occupy land previously used for livelihoods, or even with existing residences. No one likes moving or change, and clearly there should be compensation for both loss of livelihood and disruption. The responsibility for judging whether the advantages of the activity outweigh the disadvantages is ultimately a judgement for governments. International companies need to judge whether the national governance mechanisms for achieving this are adequate and up to international standards and guidelines, such as those developed by the World Bank. Over the years we have learned much about this process, not only about proper consultation but about ensuring that those affected derive adequate lasting benefit from their compensation. We are learning too to record and track what happens to affected families and individuals so that future discussions on whether compensation was adequate are based on agreed facts. This too is an area where constructive collaboration between government, industry and civil society organisations can help deliver better outcomes.

Related to resettlement is its converse, inward migration. People are drawn to areas of economic activity and this can lead to growth of informal settlements with very poor conditions. Without thought and co-operation, both resettlement and inward migration can lead to human rights abuses.

Union activity

The third principle of the UN Global Compact states that "Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining". In countries where the right of free association is restricted or unions banned, companies should express support for the establishment of such human rights and take steps within their own organisations to make sure that there is free expression of the views of all employees, individually or collectively. Some people have, however, argued that Principle 3 of the UN Global Compact means that companies should positively encourage the formation of unions in their own operations. This, in my view, is not the case. While the right to associate and form a union should be inviolable, so too should be the right of employees to sign individual contracts outside a union and for all parties to argue freely for their preferred solution.

The question of complicity

After the first principle of the UN Global Compact "Businesses should support and respect the protection of internationally proclaimed human rights" the second principle adds "and make sure that they are not complicit in human rights abuses." Complicity in this context to me means using third parties as proxies to carry out abuses - for example security forces or through involvement with militias. It is for this reason that implementation of the Voluntary Principles on Security and Human Rights is of such importance. Consider a case which a country manager once raised with me once in an annual discussion on the implementation of business principles. He had reported a theft or fraud to the local authorities, who arrested two main suspects, against whom the evidence was indeed very strong. He subsequently learned that the two were being mistreated by the authorities to determine who was guilty. He rightly then approached the authorities and withdrew the charges. Had he not done so, he could I believe have been considered complicit in their mistreatment, although not actually responsible. The pair were released. However, had the authorities chosen not to release the pair, there was nothing that he could have done other than to continue to appeal for proper treatment. Companies do not run countries nor control the forces of law and order. Such an outcome would have caused him to modify future behaviour, as he did in any case, but I would not have deemed him complicit in the past abuse.

You might say that the company should withdraw from that country in the light of that experience. In my opinion a company should only withdraw if it cannot run its operations in line with its principles, or bring them into line within a reasonable period of time. Although maltreatment of suspects in general was likely to occur from time to time in that country, it could be avoided in relation to the company's operations. Had improper payments been necessary for continued operation the argument would have been different.

A company also has to consider its obligations to its employees and surrounding communities. Withdrawal from a country on grounds of human rights abuses by that country's government is likely to result in either employees losing their jobs, or their employment continuing in the service of the very government guilty of the abuses. Neither would appear to me desirable outcomes. It is undoubtedly such considerations that make the international community so reluctant to impose sanctions. Although the judgement is up to each and every company, and its shareholders and customers will rightly take its behaviour into account, I think it is unreasonable to expect companies to act where governments in the UN do not consider it appropriate to do so.

The draft Norms on the responsibilities of transnational corporations and other business enterprises with regard to human rights

I could not conclude a talk on Business and Human Rights in a UN context without expressing a view on the draft Norms on the responsibilities of transnational corporations and other business enterprises with regard to human rights. The Norms build not only on the three great UN Declarations on Human Rights, Labour and the Environment and the UN Convention Against Corruption to which signatories to the UN Global Compact subscribe but also draw on a further 40 or so agreements and conventions, some of them regional and not global, most of which I confess I have not read.

There is no doubt that there are many offences against human rights carried out by companies, particularly in relation to conditions of employment. The vast majority of these occur not in major transnational businesses but in poorly regulated national businesses, including in the extractive industries in such areas as artisanal mining, as well as in areas such as underground coal mining in many countries.

I believe that industry is prepared to work with governments and other sections of society to ensure that in each and every country national legislation is enacted, and then enforced, to ensure that the principles of the major UN Declarations and conventions on which the Global Compact is based are reflected in appropriate national legislation. This is a major job. It could not be progressed in every country simultaneously or evenly. But it is what is needed if we are to make real progress across the world. I urge us all to join in this painstaking effort on a national basis.

So what of the draft Norms? Can one really be against 40 conventions which exhort one not to do what one should not be doing anyway? The answer is yes, because while the Norms will give some people a sense of achievement in here in Geneva and in New York, their main impact will be to increase legal employment. There will be an increase in spurious and extremely expensive legal cases, mainly in the United States, distracting us from the important task of improving and implementing proper national legislation and building real respect for human rights into societies across the world, including but not limited to corporations and employers in all of those societies. They would apply higher standards to companies than to other actors in society and seek redress against companies in a manner that is not available against governments. And the irony is that the United States does not support the International Criminal Court which is the one international court to which you and I are today subject if we indeed commit some of the more serious crimes against human rights.

In all of the complex situations and dilemmas with which companies I have been involved with have struggled, I do not recall once anyone turning to one of the documents cited in the Norms for guidance. There is no doubt that we sometimes did get the answers wrong, but this was because of misjudgement, lack of sufficient anticipation or foresight, or lack of information., not for the lack of the Norms. What would have helped, and which now does indeed help, are the practical learning and dialogue activities of the UN Global Compact, the efforts such as the Voluntary Principles on Security or the EITI which bring different stakeholders together to exchange examples and develop tools to address the day to day complexities of business in difficult environments. In their work, companies need the experience and expertise which civil society organisations and others can bring to bear. I urge us all to get together to see if we can work to make practical progress in the complexities of real world situations in various countries, and to back that up with well thought out and properly enforced national laws and regulations.