India has been at the centre of the debate on corporate responsibility for more than thirty years. The Bhopal tragedy in 1984 led to global condemnation of a multinational company’s conduct. In the 1990s a worldwide campaign forced international retailers like Ikea to change their policies and practices over child and bonded labour in export industries such as carpets in India.
Today, many companies say that they should treat workers well and address their impact on human rights wherever they operate, but not all follow through. What are some of the key issues for foreign and domestic companies in India and for Indian companies operating abroad, as India emerges as an economic power?
For any company, social responsibility should start with respect for workers’ basic rights as enshrined in the Geneva-headquartered International Labour Organisation’s (ILO) Declaration on Fundamental Principles & Rights at Work.
The organisation’s principles promote freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labour; effective abolition of child labour; and the elimination of workplace discrimination.
In India, the best known problems are hazardous child labour and compulsory labour in the form of bonded labour. Both are still prevalent in open-pit mining, brick kilns, handlooms, sericulture (silk production), silk weaving, the carpet industry and construction industry.
Companies in these industries have a special responsibility to ensure that their activities do not use or benefit in any way from the use of child or bonded labour. India’s laws are good, but poorly enforced. Companies should comply with those laws and ensure that they have policies and procedures in place to identify, prevent and mitigate these problems if they occur.
Employment of Dalits in the private sector is an important issue. While there are no good estimates of the total number of Dalits in the private sector, there are troubling studies that suggest that Dalits are not necessarily benefiting from the economic boom.
For example, a two-year sociological study by a group of researchers at the National Institute of Advanced Studies on Indian workers in the information technology and software industries, both domestically and abroad, reported that fewer than 2% of workers were Dalits.
While there may be many reasons for this, responsible companies should take steps to ensure that hiring practices do not perpetuate caste discrimination. One important step could be to adopt the Ambedkar Principles, which is a comprehensive standard to help companies avoid caste discrimination in their hiring practices and in their corporate philanthropy.
As with Chinese companies, there is also a growing scrutiny of the conduct of Indian multinationals.
Although achieving energy security is an understandable objective, companies such as ONGC Videsh, a wholly-owned subsidiary of state-owned Oil and Natural Gas Company of India (ONGC), have invested in some of the most troubled regions in the world.
ONGC Videsh took over an investment from Canada’s Talisman Energy after the latter withdrew because of the worldwide condemnation of the Sudanese government’s scorched earth campaign to secure those oil fields and its use of oil revenue to fuel conflicts in southern Sudan and Darfur that have led to the displacement of millions and the deaths of hundreds of thousands of civilians.
In Myanmar, ONGC Videsh is also an investor in a gas project where there are well-founded fears that a proposed pipeline will fuel serious human rights abuses. ONGC claims membership to the Global Compact, a UN-sponsored initiative on corporate responsibility that asks companies to “support and respect the protection of internationally proclaimed human rights,” but ONGC reports on its human rights activities within India only.
ONGC Videsh has so far been silent about the ongoing human rights crisis in Myanmar. Nor has it signed onto voluntary industry transparency initiatives, such as the Extractive Industries Transparency Initiative, designed to prevent corruption in oil-rich states, or endorsed industry standards such as the Voluntary Principles on Security & Human Rights, which would oblige them to respect human rights with regards to the security of their personnel and facilities.
Companies cannot be silent or sluggish on human rights in a fast globalising world. Many have focused on voluntary initiatives to deflect criticism of their own practices. But such voluntary rules may be too easily ignored or too weak to ensure companies respect human rights. In response, there is a growing movement to develop universal and enforceable rules for all businesses.
The lesson of these developments is that companies world over need to get serious about human rights because that is what is expected of them in the 21st century.
Arvind Ganesan is the director of the Business and Human Rights Program at Human Rights Watch