By Chandeepa Wettasinghe
The observance of human rights and ethical business practices would profit all businesses and help in the equal distribution of the dividends of economic development in post-war Sri Lanka, according to the leading international barrister and wife of former British Prime Minister Tony Blair.
“Economic development is key, so that every person in every corner of this wonderful nation can benefit from the peace dividend. Well you may say, ‘What’s the law got to do with that? It’s a matter for economics and businesses, and not human rights,’ but clearly, I don’t agree with that, and neither does the Bar Association,” Cherie Blair said at a discussion held at the Bar Association of Sri Lanka.
She said that some companies are growing at any cost, and the prices are being paid by the locals who had endured the war for many decades.
Need to understand ethics and HR issues
“Companies need to understand ethics and human rights issues. They don’t live in an economic bubble. It’s made up of people who have multiple needs and wants,” she said.
While saying that the primary responsibility of human rights rests in the government, Blair said that in an increasingly interconnected world, businesses too must bear responsibility.
She noted that despite human rights issues not being in the centre stage of businesses in the past, and commercial law not provisioning for human rights, an increasing number of business agreements, free trade agreements and other international partnerships signed include clauses of international human rights conventions, making them law, and countries such as South Africa have voided agreements when a signatory has breached human rights.
Not just optional extras
“Governments and businesses are realizing that ethical business practices are not just optional extras, but in fact, make complete business sense. Human rights aren’t simply the business of governments. They are also the business of businesses,” she said.
Companies have gained some ground in the area by spending increasing amounts of money towards corporate social responsibility (CSR) and making CSR a part of their core businesses through ethical practices in their supply chains, which have helped them attract quality employees and more business, according to Blair.
However, so called sin industries such as alcohol, tobacco, arms and finance companies would find it fundamentally difficult to adhere to core ethical business practices.
“The UK Companies Act was amended to make CSR spending mandatory,” she spoke of the Western solution.
Since industries in Sri Lanka too have attempted to create a positive image through CSR spending.
Not a Western construct
Blair said that ethics and human rights are not a Western construct, being present in Eastern ideologies and religions as well.
She also warned that while Commercial Law does not take human rights into account and makes adhering to them voluntary, but when disasters strike, the Common and Criminal Laws of a country come into effect.
Blair said the change in direction towards more ethical practices recently is due to influences from all stakeholders connected to businesses.
“Investors are now not only concerned about the returns on their investments, but also whether the investments are protected and sustainable because of the way companies conduct businesses. Investors want sustainable investments instead of a lucrative business which gets rocked by human rights violations or corruption,” she said.
She noted that this is due to technology and globalization, which has led to everyone knowing everything happening around the planet; highlighting disasters such as the Rana Plaza collapse in Bangladesh which brought pressure on global brands such as Nike and Gap.
“Today there’s no hiding place, and disasters from all over the world are known all over the world. This presents a whole host of challenges, and vast opportunities for economies like Sri Lanka,” she said.
Blair noted that with Sri Lanka’s great track record in women’s rights and human rights in the apparel industry, Nike and Gap have entered the country for its production purposes.
“Sri Lanka is emerging as a place for ethical businesses and you are better placed than many of your neighbours to rise to the challenge of reaching internationally accepted standards,” she said.
She said that Sri Lanka entering into more free trade agreements would allow global brands to quickly switch over to Sri Lanka in case disaster strikes signatory countries.
Further, consumer pressure too has played an important role in making companies more ethical, as demand has increased for quality, ethically sourced and environmentally friendly products, according to Blair.
“Consumers shouldn’t save a few pennies here and there. They should think about the people being affected when they buy a product. Many consumers are now asking how such sophisticated international companies failed to foresee or ignored the risks in their international supply chains. Companies will respond to pressure from the customers, governments and employees,” she said.
Blair noted that having ethical processes in place cost an enormous amount of money, but that the returns are considerable.
“Businesses that have a good work/life balance for employees and ethical practices make better profits, give good returns to investors and retain employees,” she said.
However, she noted that a change in corporate behaviour is required.
“There needs to be a cultural change. Mid-level managers won’t think of human rights or ethics. They’ll think about creating as many products with the resources they are given. They need to realize that the bottom line isn’t one thing but a triple bottom line of profits, people and the planet,” she said.
Blair said that public-private partnerships and partnerships with non-governmental organizations are critical in developing such a mindset.
“Instead of just shouting, NGOs should be involved in the decision making as well. In some cases boards of directors have government appointed directors and employee representatives,” she added.
However, Blair’s comments on human rights and ethics come in the backdrop of her being at the receiving end of a lot of flack in both Britain and on social media for defending alleged Rwandan war crime suspect Karenzi Karake and controversial Maldivian President Abdulla Yameen.