Facing up to human rights risk

As Global Vice Chair of Amnesty International Charity Limited, our board pack is full of the worst examples of what humans can do to each other. Reports from our 68 offices around the world and attacks on our staff, contractors and partners reaffirms that power, not rules, dictate the foreign and economic policies of states.

Geopolitics is great state power rivalries and the geographical dimensions of global political power. Proxy conflicts are now commonplace with former colonial powers seeking to protect their ‘national interests’ within their former colonies.

The Ukraine-Russia war is the top-of- mind geopolitical situation for some.For others, it’s the Balkans (again), Poland-Belarus, West Africa (Niger, Mali), Rwanda-DRC (again), Latin America (Venezuela, Peru, Brazil), the Middle East, India, China-Taiwan . . . the list goes on.

Power is also the lens within which some governments now fail to protect and respect human rights within their borders – go through the same list above and add some more ‘democracies’. Power is also the lens with which some businesses and corporates now see their modus operandi, particularly those which are intertwined with the government apparatus.

Human rights abuses are the consequence of bad political and economic decisions. There is an increased attention to human rights for corporate governance, particularly as they directly link to business ethics, stakeholder management, financial performance and risk management.

Here are some thoughts on the environment of a boardroom when discussing these geopolitical matters:

1. Understand the materiality of the geopolitical and human rights risks and concerns. For some New Zealand businesses, local laws provide a framework within which to govern. For those organisations with an international element, defined international conventions are added to the mix. For some directors, they are already talking about the conventions related to child labour, forced labour, human trafficking, modern day slavery, first generation freedoms (such as expression, association) and indigenous people’s rights. Companies which enter markets that don’t have aligned values to New Zealand’s are no doubt making decisions that might impact on not only their way of working but their core kaupapa. One sees it when a business appoints an experienced director with ‘a specific country’ experience.
2. Understanding of geopolitical and human rights situations by company/ business directors and executive teams should be on your skills matrix. A good example is at the supply chain end where it is no longer enough to understand the technical side of the supply chain. Moreover, civil society, communities, and media are adapting to different ways of holding organisations to account. People power movements like the Arab Spring, Extinction Rebellion, Umbrella Movement, #MeToo and Black Lives Matter are now setting their sights on corporates and businesses.
3. Directors need to build a sensitivity to geopolitical and human rights risks for their organisation. Using the ‘for information, for consideration/ discussion, for decision’ template is appropriate. As always, ask the right questions. This is particularly important when it comes to diverse markets. Investors in the US and Europe are holding directors to account for ensuring appropriate oversight on human rights risks that might materially impact reputation, value uplift, or relationships with those countries and communities.
4. Cursory reading of newspapers no longer cuts it. Directors are not asked to be experts in geopolitics but an understanding to the point of asking the right questions of management requires a different lens.
5. Continue to intimately understand the organisation’s appetite for risk. As part of that, also develop a framework with which to move quickly when events occur. It’s important that framework is resourced with the right expert advice. While the invasion of Ukraine might have been a surprise for some, the threats were well publicised for months. Make the decision to understand deeper and a board will be able to ‘see around the corner’ and prepare.
6. If required, don’t be skint on resourcing to get a better understanding of situations, conflicts or regulatory change. Remember the adage, it’s an investment, not a cost. Exposures such as lost production, supply chain disruption, reputational damage, and loss of social licence to operate are costs to the organisation.
7. Due diligence frameworks for new products, services, or markets should have an element of human rights and acknowledgement of geopolitical risk. This requires directors to be aware of conscience (or what some call ‘gut feeling’). As I said to a director earlier in the year, the use of government security forces on a project in a Southeast Asian country with a history of human rights abuse should speak for itself when it comes to the potential for further abuse along their supply chain.
8. Use the many frameworks available to organisations. Organisations with overseas offices will already be using human rights frameworks from that region or country. With entities seeking to enter new markets, there are again good organisations, consultancies and government entities like New Zealand Trade and Enterprise which has market understanding.
9. Ignore the old demarcations. Global inter-connectedness, including with the business world, will see company resilience (and social licence) being heavily reliant on civil society, media and communities. When assessing your organisational resilience, be open to moving beyond partnering with the ‘usual suspects’.

As the Pegasus Project – an international investigative journalism project in 2020 – reaffirmed, business leaders are now subject of state espionage tactics. Welcome to the world of civil society.

It is a complex and brutal geopolitical environment to navigate. Amnesty International’s recently released annual report for 2022 highlights double standards on human rights and the failure of the international community to unite around consistently applied human rights and universal values.

While the navigation might be difficult for some, the days of governance practitioners putting their head in the sand and saying it doesn’t involve us are long gone. Get used to it.

About the author

Tiumalu Lauvale Peter Fa’afiu is the Global Vice Chair of Amnesty International which has 68 offices around the world with over 3,000 staff. He is based in Auckland and is a professional director.