National Action Plan (NAP) on Business and Human Rights

ECONOMY/ GOVERNANCE

Topic:

• GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 
• GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

National Action Plan (NAP) on Business and Human Rights

Context: An NAP becomes more relevant in the wake of COVID-19 in that the pandemic has exposed several systemic vulnerabilities in how businesses operate. Informal migrant workers in India are the worst hit, abruptly thrown out of work without food, shelter, and social protection – overnight. 

Background

• In June 2011, the UNHRC endorsed the UN Guiding Principles for Business and Human Rights (UNGPs).
• The UNGPs elucidate the duties and responsibilities of the State and businesses in addressing adverse business‐ related human rights impacts. 
• The objective of the UNGPs is to enhance standards and practices with regard to business and human rights to achieve tangible results for affected individuals and communities, and thereby contribute to a socially sustainable globalization

UNGPs are broadly based on three pillars: 

• Pillar I ‐ The State Duty to Protect Human Rights.
• Pillar II ‐ The Corporate Responsibility to Respect Human Rights.
• Pillar III ‐ Access to Remedy. 

What is NAP on Business and HRs?

• In June 2014, the UNHRC called upon its member States to develop a National Action Plan(NAP) to promote the effective implementation of the UNGPs. 
• The NAP is a policy document by which a government articulates its action to fulfil its commitment to implementing the UNGPs. 
• The vision of India’s NAP stems from the Gandhian principle of trusteeship that defines that the purpose of business is to serve all stakeholders
• The Indian government has acknowledged the importance of responsible business conduct since 2011 by introducing the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs). 

• The NVGs were recently updated to National Guidelines on Responsible Business Conduct (NGRBC). 

• In addition to these voluntary measures, SEBI has had mandatory environment, social and governance (ESG) disclosures for the top 100 companies listed (gradually expanded to 1000 companies) on Indian stock exchanges since 2012. 

Instances of HR and Environmental violations by Business

1. Several plants were shut down in the last two decades on charges of violating human rights and environmental rights:

• • Coca Cola Co’s plants in Plachimada (2004), Mehdiganj (2013) and Hapur (2016)
  • Hindustan Unilever Ltd’s (mercury) factory in Kodaikanal (2001)
  • Sterlite Copper plant in Thoothukudi (2018)

2. In the Maggi case, Nestle SA justified the misleading ‘No added MSG’ label, stating: “Everyone in the industry was doing it”.
3. There is a law that prevents companies from advertising tobacco near school premises. But tobacco giant ITC Ltd’s notebooks, complete with its logo, are available right inside classrooms. Again, seemingly, there is nothing illegal about it.
4. More than a million people die in India each year from due to consuming tobacco. One of the investors of a tobacco company is LIC, owned by the Government of India — that has signed the WHO convention on tobacco control.
5. When children are glued to games like PUBG, the young ones and their parents are blamed. But in a class suit in Canada, parents alleged: “companies hire psychologists, who dig into the human brain and they really made the efforts to make the game as addictive as possible”.

Way Forward

1. A NAP should precisely target the following five objectives

• Encourage CAG to evolve auditing standards that seek to ensure human-rights compliance and extend the same to all public-private partnerships. This should ensure respect to human rights in all cases of public procurement and of public investment.
• Mandate the Central Election Commissions to regulate corporate funding of political parties, including directing mandatory disclosures of donations as well as of any conflict of interests by both businesses and political parties.
• Obligate UPSC to direct all public enterprises and companies invested with public funds or loans to organise diversity audits. They should put the findings and appropriate action plans in the public domain.
• Expand the powers of Human Rights Commissions to issue notices to businesses and to create business and human rights ombudsperson to monitor human rights situation in businesses.
• Authorise the National & State Commissions for SC/ST/Women/OBCs to issue notices to businesses on violations in their workspaces and value chains. These authorities, although working with limited powers, for sure, have the potential to create and facilitate narratives around business and human rights.

2. Changes at International Level: An indicator on human rights within the Ease of Doing Business Index would transform the way various Governments look at business
3. Changes in Educational Curriculum: There has to be proactive attempt to make Business and Human Rights a core part of management curriculum. Every business manager groomed should be a human rights defender: That should be the motto of all educational institutions.
4. Adoption by MSMEs: India has a significantly large number of micro, small, and medium (MSME) enterprises. The success of India’s NAP rests on the ability of the MSME sector to adopt it. The government as well as large companies have a crucial role in building the capacity of the MSME sector through training, awareness and providing incentives
5. Adoption by Technology Companies: The rising influence and dominance of technology on future of work, privacy and inequality is a growing area of concern in India. The NAP should take steps to embed accountability of technology companies on human rights issues beginning with rights of workers in the gig-economy.
6. A smart mix of voluntary and mandatory provisions is crucial for the NAP to create a level playing field for companies by mandating necessary minimums such as a mandatory Human Rights Due Diligence mechanism.
7. Grievance Redressal Mechanisms:The lack of operational-level grievance mechanisms could be another stumbling block for the rights holders to access remedy mechanisms. Therefore, to make NAP success, a proper grievance redressal mechanism should be established at State & National level.

Conclusion

The NAP process is an opportunity for India to demonstrate leadership in achieving sustainable and inclusive growth and position itself as the world’s largest sustainable and responsible economy. The NAP can serve as an important tool to guide Indian businesses to redefine their purpose and emerge out of this pandemic more humane