COVID-19: A time to reinforce human rights commitments

The responsibility of business to respect human rights has never been as critical or complex as it is today.

COVID-19, a global pandemic that silently moved across continents and country borders, is disrupting the global economy and severely affecting our sense of security, livelihood and well being. No industry or country has been left unscathed.

Multiple suppliers have shared they are being forced to reduce worker wages in response to buyer cancellations and factory closures due to country lock downs. This directly impacts the livelihood of their workers. These suppliers are left wondering how much longer they can afford to pay wages as they hold out hope other customers will honour their purchase orders.

The lack of responsible purchasing practices demonstrated by some buyers changing contract terms and cancelling orders is causing and contributing to human rights impacts. This is in defiance of corporate commitments to respect human rights. Many countries reporting voided supplier contracts and extended payment terms, such as Bangladesh, Pakistan and Cambodia, are high-risk countries with limited social protections. As a result, their factory workforce is left even more vulnerable.

Poor purchasing decisions will impact future efforts to improve working conditions. They undermine established trust between buyers and suppliers, while also eroding future buyer leverage to drive positive impact and leave many asking:

• If suppliers cannot trust brands to uphold their contracts, what incentives do suppliers have to respect the rights of their workers beyond local regulations?
• Why would suppliers adopt responsible recruitment practices to reduce the likelihood that migrant workers end up in forced labour situations?
• Why would they want to pay workers beyond minimum wage to ensure workers can provide adequately for their families?
• What ground will buyers have to ask suppliers to behave ethically when they have demonstrated they are not ethical partners?

These short-term actions will affect the realization of the Sustainable Development Goals and corporate social commitments to achieve the Employers Pays Principle, living wage and effective management-worker social dialogue. The business relationship between buyers and suppliers will be unwoven.

Some companies are doubling down on their commitments to responsible sourcing. They are demonstrating their ability to respect human rights for workers through influencing a company’s purchasing decision making. These sustainability champions are setting the example of how to maintain human rights commitments in volatile times by:

• Maintaining an active dialogue with their suppliers to find shared solutions and maintain trust.
• Honouring their contracts and payment terms to reduce negative repercussions to workers’ wages.
• Disclosing what actions they are taking to minimize negative human rights impacts.

There are no easy decisions on how businesses should navigate COVID-19 and the complex repercussions it will have on the economy. Many companies are trying to balance their costs and investor expectations to prevent store closures and the impact to their own workforce. However, company decisions and actions (or lack thereof) to prevent and mitigate human rights risks will need to be disclosed as part of ESG reporting requirements and in alignment with the UN Guiding Principles.

It is crucial that we collectively do not let today’s decisions cause, contribute, or be linked to further harm in the supply chain. Never has human rights due diligence been so crucial to limit the impact to the most vulnerable.

This is a challenging time for social responsibility because company programs and commitments are being tested. However, this could be the leapfrog moment for many companies to build back better and stronger.

ELEVATE Consultants are experienced in creating Human Rights Due Diligence strategies. Contact us for more information.

These blogs are written by ELEVATE staff members or associates and the views and opinions expressed are not necessarily those of ELEVATE.

Photo credit: GMB Akash