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IPIECA provides feedback to Shift/Mazars discussion paper

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Shift and Mazars launched a Discussion Paper on the development of public, global standards for reporting and assuring companies’ alignment with the UN Guiding Principles (UNGPs) in May 2013. IPIECA made the following recommendations:

  • The project intends to use The Association of Southeast Asian Nations (ASEAN) as the trial region for the global standard. Indeed there is an important business community in ASEAN region and there are significant human rights issues in Asia. However, the business and regulatory climate in Asia is not representative of the whole global Human Rights and Business agenda; it is therefore important to acknowledge that each region will face its own challenges and issues in relation to business and human rights. For example, many of the challenging dilemmas and dynamics on business and human rights are occurring in North America and the European Union, including the application of Dodd Frank, European Commission sector guidance, transparency legislation, Dow Jones Sustainability Index, the Global Reporting Initiative, and the Voluntary Principles on Human Rights.
  • Reporting according to the UNGPs is only expected for severe human rights impacts. The project needs to clarify that human rights reporting should not therefore be expected from all companies or for all the reporting companies’ potential impacts. The document is unclear about the level of detail that may be reported about company affiliates; for example, the detail which can be included in Human Rights communication is subject to internal governance. The project must ensure that it is relevant and practical for businesses of all sizes and structures.
  • There are sensitivities related to reporting that IPIECA feels require consideration. There may be scenarios where marginalized groups, with whom the company engages, wish to keep a low profile as the national government does not recognize those groups (or even discriminates against them. Additionally, one must be sensitive when reporting on exposure to human rights issues and impacts which could be perceived as “blame” of the company on the government performance (e.g. in the area of poor performance of public security forces, or poor/corrupt labour law enforcement agencies).
  • Because the UNGPs are qualitative and not quantitative, determining the efficacy and suitability of company practices through auditing raises concerns about subjectivity. A determination of the rights the company is most likely to have an adverse impact on is too subjective an issue for auditing. It is far too broad to allow an auditor to determine material weakness in a company’s human rights policies. Without more clearly defined terms this could create confusion and leave companies exposed to arbitrary actions by auditors.

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