Adam B. Greene Vice President, Labor Affairs / Corporate Responsibility & Governance

1. IOE Global Industrial Relations NetworkBusiness & Human RightsScotiabank, Toronto, CanadaApril 24-25, 2013 Adam B. Greene Vice President, Labor Affairs / Corporate Responsibility & Governance April 24-25, 2013

2. UN Framework on Business & Human Rights • State duty to protect: • Respect rights, establish laws, implement and enforce them • Corporate responsibility to respect: • Comply with all applicable laws • Proactive actions beyond compliance • Access to remedies: • Access to (functioning) courts • Other mechanisms: consultations, engagement April 24-25, 2013

3. UN Guiding Principles on Business & Human Rights • Endorsed by the UN in June, 2011 • Recommendations to implement the “Protect, Respect, Remedy” framework • Apply to all States and all enterprises, regardless of size, sector, location, ownership or structure • Do not create any new international laws or obligations: “Not law – logic” • Set the new international benchmark on corporate responsibility April 24-25, 2013

4. Corporate Responsibility to Respect • Not infringe on the human rights of others • Starts with legal compliance • Avoid causing or contributing to adverse impacts through own activities; and • Seek to prevent or mitigate adverse impacts directly linked to company through business relationships • Even if they have not contributed to those impacts “Avoid” = control (you are responsible for impacts) “Seek to” = leverage (supplier is responsible for impacts) April 24-25, 2013

5. Supply Chain Responsibility • “The responsibility of business to respect human rights applies to all enterprises regardless of their size, sector, operational context, ownership and structure.” • Enterprises with large numbers of suppliers are not expected to conduct due diligence on all of them • Appropriate action with suppliers will depend on: • Your leverage with the supplier • The importance of the relationship • The severity of the supplier’s impacts, and • The potential negative impacts caused by terminating the relationship April 24-25, 2013

6. Influence of the UN Guiding Principles • OECD Guidelines for Multinational Enterprises (2011): • includes a new chapter on human rights based on the Guiding Principles • ISO 26000 Guidance on Social Responsibility (2010): • Human rights and implementation text modified to make it consistent with the Guiding Principles • International Finance Corporation (2011) • Guiding Principles reflected in the revised IFC Sustainability Framework and Performance Standards • EU Strategy on CSR (2011-2014): • Expects EU enterprises to follow the Guiding Principles April 24-25, 2013

7. Endorsement of the UN Guiding Principles • Governments: UN Human Rights Council unanimously endorsed the Guiding Principles in June 2011 • Business: IOE, ICC and BIAC endorsed the Guiding Principles • Trade Unions: ITUC endorsed the Guiding principles as a “far better approach than the usual CSR activities” • NGOs: GP’s are a “starting point” but “are incomplete in important respects and do not fully embody the core human rights principles” April 24-25, 2013

8. Beauty is in the eye of the beholder • Governments: no new treaty, keeps issue moving • Business: recommendations - not new treaty, clear distinction between role of States and companies, applies to all countries and companies (not just MNE’s); and clear limits on supply chain responsibility • Trade Unions: linked to international standards, including ILO Declaration, takes basis out of company CSR policies, see broad scope on supply chains • NGOs: wanted an international treaty with direct liability on companies for human rights abuses – i.e. the so-called “UN Norms” April 24-25, 2013

9. Global Unions are redefining the GP’s • How do GPs & OECD Guidelines differ from CSR? • The ‘national law and practice’ escape clause is closed – the question: “Is it legal?” is not relevant! • Where human rights are concerned international human rights standards are the reference - not national law! • ‘Expectations’, ‘aspirations’ etc. are replaced with real-world impact, defined responsibilities and a specified course of action • The ‘sphere of influence’ is replaced with a broad but concrete definition of the business relationships within which action is required as a part of ‘human rights due diligence’ April 24-25, 2013

10. Global Union views: Supply Chains • IMPACT replaces ‘sphere of influence’, and requires ACTION within a defined network of ‘business relationships’ and the ‘supply chain’ • Responsibility of a company for any adverse impacts on the part of business partners is clear • Business partners clearly fall within the sphere of the business relationships/supply chain within which human rights due diligence must be exercised, as do agency/contract workers • “In the absence of an employment relationship, enterprises are nevertheless expected to [follow] risk-based due diligence and supply chain recommendations.” OECD MNE Guidelines April 24-25, 2013

11. Global Union views: Agency Workers • Most company human rights policies are guided by international human rights standards – what’s wrong? • The reference to the international human rights instruments that guide the policy is selective • What are the real or potential human rights risks of agency labor? Do they involve human rights risks attributable to a Company, or are they limited to risk by association? • Agency work conforms to the ILO definition of a ‘disguised employment relationship’ undermining rights and protection – ILO Recommendation 198 April 24-25, 2013

12. Global Union views: Agency Workers • Inequality of treatment between permanent and non-permanent employees violates international human rights commitments • It is a violation of international human rights commitments to maintain temporary and agency workers working alongside permanent workers in a situation of permanent precariousness • Under the OECD Guidelines, companies have an obligation to work towards the progressive realization of rights. April 24-25, 2013

13. Global Union views: Precarious Employment • The GP’s & OECD Guidelines for the first time specify the (minimum) instruments defining States’ and corporations’ international human rights obligations • Human rights apply to all workers – they cannot be restricted in the name of “seasonality”, “flexibility”, or diminished as a consequence of a triangular employment relationship or ‘temporary’ contracts • The use of precarious employment beyond what can be established to be necessary for legitimate purposes puts companies at risk of violating fundamental human and trade union rights April 24-25, 2013

14. Global Union views: Precarious Employment • Performing human rights due diligence means minimizing actual and potential risk of human rights violations by reducing the extent of precarious work • Companies must demonstrate that they are moving away from precarious employment to promoting more stable and secure jobs by entering into negotiations with trade unions for the progressive reduction of precarious employment • Companies should engage in continuous monitoring, together with trade unions, of the use of precarious employment in their own operations as well as in those of their suppliers and contract manufacturers April 24-25, 2013

15. Example: Forest Stewardship Council • 2008 – Motion proposed & seconded by various European unions is passed by FSC General Assembly requiring that organizations must comply with “at least the core ILO conventions” in order to be awarded any type of FSC certificates. • FSC will only allow its association with organizations that are not directly or indirectly involved in the following unacceptable activities… • “Violation of any of the ILO Core Conventions1 • 1As defined in the ILO Declaration on Fundamental Principles and Rights at Work” April 24-25, 2013

16. Compromise text agreed - then rejected • In addition, the signing Organization recognizes that the principles established by the International Labor Organization through the 1998 Declaration on Fundamental Principles and Rights at Work (the “Principles”) serve to guide governments in the protection of the basic rights of workers without defining a uniform path for every nation to follow. Based upon these Principles, and consistent with applicable national law, rights, regulations, and administrative/judicial rules and procedures , the signing Organization shall respect: • freedom of association and the effective recognition of the right to collective bargaining; • the elimination of all forms of forced or compulsory labor; • the effective abolition of child labor; and • the elimination of discrimination in respect of employment and occupation. April 24-25, 2013

17. AFL-CIO Report: “Responsibility Outsourced” • “systematic failure by the "corporate social responsibility" industry to protect abused workers in supply chains of multinational companies” • "The whitewash of corporate-financed workplace audits is starting to fade fast, and this landmark report calls time on a failed system which has done nothing to help workers in some of the most exploitative parts of multinational production chains” Sharan Burrow • “Initiatives run by workers have had a positive impact, but company-financed initiatives have often followed the outsourcing model of the very companies they are supposed to police” April 24-25, 2013

18. Thank You Adam B. Greene Vice President, Labor Affairs / Corporate Responsibility & Governance United States Council for International Business (USCIB) 1212 Avenue of the Americas, Suite 2100, New York, NY 10036 USA Email: agreene@uscib.org / Office: +1-212-703-5056 / Mobile: +1-917-318-1795 April 24-25, 2013