Australian Businesses Struggle with Human Rights

Many businesses lack clear strategies to monitor and manage human rights risks in their supply chains, despite recent high-profile violations, new research between the Australian Human Rights Commission and two leaders in the ethical business field has found.

In a landmark collaboration, the Australian Human Rights Commission, the Australian Centre for Corporate Social Responsibility and the Global Compact Network Australia mapped how Australian businesses currently deal with human rights issues.

The report, launched Wednesday, showed that, in an environment of “heightened transparency through digital media, civil society and consumer activism”, Australian businesses increasingly recognised their responsibility to do the right thing.

But the desire to address human rights violations remained aspirational, without clear frameworks.

“Whether they are driven by internal values and ethics, or the need to enhance brand and reputation, Australian businesses have strong reasons for addressing human rights issues,” the report said.

“However, in taking action less than half of the respondents to the survey (47 per cent) agreed that their business had a written policy on human rights.

“Even fewer (36 per cent) agreed that their business reports publicly on its human rights policy and commitments.”

One of the key drivers of increasing business interest in human rights were incidents that occurred in Australia, rather than overseas.

“Recent news reports exposing violation of labour rights in Australia’s 7-Eleven retail chain and the fresh food supply chain practices cemented this understanding, highlighting that this is not just an offshore issue,” the report said.

In the survey of 90 targeted Australian businesses, respondents identified issues in Australia as the most important human rights concerns for their companies, while their supply chains were left out.

“The most important issues for Australian businesses are those that concern their immediate workforce, such as workplace health and safety, non-discrimination, gender equality, and diversity and inclusion. This is consistent with organisations indicating that the focus of their human rights efforts are within their workplaces, sites and offices,” the report said

“In comparison to direct employee issues, fewer businesses placed a high degree of importance on human rights in the supply chain. This may be as a result of the view held by many that human rights issues such as child labour and forced labour are not prevalent in the domestic Australian context, but only in distant supply chains in developing countries.”

The report found a lack of supply chain visibility was holding businesses back from creating ethical practices.

“Limited visibility into practices of suppliers was the most significant challenge to addressing human rights in the supply chain for most respondents. Limited staff capacity and authority to address impacts were also identified as strong barriers,” it said.

“The sheer complexity of some supply chains remains a significant barrier for businesses to gain visibility into their suppliers’ labour practices. Within the retail sector, businesses operate with a highly diverse supplier base scattered around the world.

“Organisations are often limited in staff and resource capacities to manage data and processes required for human rights due diligence in the supply chain, even if they have well established policies and strategies.”

The report also provided guidance to help business identify and address human rights risks in their supply chains, according to international standards such as the UN Global Compact and UN Guiding Principles on Business and Human Rights.

The suggestions included changing business models, taking collective industry action, strengthening relationships with stakeholders, leveraging international frameworks and improving visibility through technology.

Download the report here.