[Summary] RightOn #10: Business, the economy, and livelihoods in a COVID-19 world

The COVID-19 pandemic and related national ‘lockdowns’ have placed a huge strain on many businesses as well as national economies. Some businesses have reacted by doing all they can to protect jobs, health insurance, and livelihoods, while others have sought to cut costs with little thought for the impacts on human rights. Realising the importance and timeliness of the topic, the Right On initiative held a web chat titled ‘Business, the economy and livelihoods in a COVID-19 world’.

Panellists Dr Dorothée Baumann-Pauly (Professor, School of Economics and Management, University of Geneva), Dr Michael K. Addo (Professor and Director, Law Program, London Global Gateway, University of Notre Dame), Ms Elin Wrzoncki (Department Director, Human Rights and Business, Danish Institute for Human Rights), Mr Jean-Yves Art, (Senior Director, Strategic Partnerships, Microsoft), and Ms Deborah Greenfield (Deputy Director General, Policy, International Labour Organization (ILO)) shared insights on the responsibilities of governments and businesses to provide a safe working environment for workers during and after the global health crisis, and the efforts needed to ensure that economic recovery strategies are ‘rights-based’.

Global solidarity for recovery

While it may be obvious for some, the discussion kicked off with a general observation that labour rights are human rights, and in times of crisis bear even greater importance because they are the underpinnings that lead to the sustainable recovery of society.

In this recovery process, state authorities have an important role to play for two main reasons. First, the measures that were adopted by governments have had a considerable impact on the demand and supply of products and services. Secondly, authorities have the necessary means and infrastructure to move from early response to the health and economic recovery phase.

While countries with strong social security systems and the ability to preserve short-term jobs are in a much better position in terms of recovery, developing and emerging economies are in a much bleaker situation given their lack of funding, infrastructure, and social security. Their recovery process very much relies on global solidarity for building back better in a sustainable way. In line with this, the ILO, for instance, has a four-pillar approach to stimulate economy and employment, give support to enterprises, jobs, and incomes, offer protection to workers in the workplace, and encourage social dialogue.

With digital technology towards a new social contract

While digital technologies have during COVID-19 enabled everyone to stay connected and monitor the spread of the pandemic through data as part of the collective action on building back better, the information technology industry can after the crisis contribute to recovery. However, it will need to scale up in order to facilitate the emergence of a new social contract. In this context, access to technologies is not only fundamental to the exercise of human rights, but is crucial for the objective of leaving no one behind. To this end, tech companies should focus on co-operation with state institutions and non-profit organisations in order to facilitate capacity building and training in digital skills for underserved populations, prepare them for new jobs, and ultimately promote the right to decent work in the twenty-first century. To succeed, tech companies that have an international business outlook will need to overcome the divergence with state actors that still maintain a territorial and sovereign approach.

Corporate social responsibility cannot be cosmetic

In addition to tech companies, the speakers also touched upon the involvement of the private sector in general. The pandemic has shown that cosmetic measures, adopted as part of corporate social responsibility, do not make the cut. Therefore, the business-as-usual approach does not help in making the global supply chain more resilient, nor does it increase the motivation of workers that had to adjust to a new situation.

While regulation, investors, and trust are essential external factors that bear importance for the readiness of the private sector with regard to recovery, the crisis highlighted the need for new business models that incorporate human rights into core business operations. Even though there is agreement that human rights matter in the corporate sector, with successful examples of companies implementing human rights in their corporate decision-making and supply chain management (e.g. in the fashion industry), a relatively large number of companies still lack the know-how.

Talking or walking the talk?

Nevertheless, the lack of know-how is not always the reason why companies fail to incorporate human rights in their business strategies. When faced with a trade-off between human rights and profit, companies have a tendency to favour the latter. This is particularly challenging for small and medium-sized enterprises (SMEs) that often face pressure from multinationals to act as if human rights are not important, but in the meantime lack capacity and support. The COVID-19 crisis has brought into focus this lack of willingness to play by the rules which in itself is not a recent occurrence given that the concept of business and human rights has made fairly slow progress and still requires a cultural transformation, i.e., how businesses work, corporate thinking, and how society relates to business. To address this challenge, a much broader notion of human rights that encompasses issues such as climate change and anti-corruption should be considered instead of the current granular approach that focuses on particular aspects of human rights.

Smart ways of regulating businesses

Smart and efficient ways of regulating businesses were also addressed. Citing the example of Denmark where companies registered in tax havens face restrictions on accessing financial aid, and noting that taxation is an essential part of domestic resource mobilisation (DRM), and therefore a tool that could potentially help in keeping businesses compliant with human rights laws, it was stressed that there is nonetheless insufficient evidence of the effect of taxation practice. Emphasis was instead placed on the window of opportunity offered by the current situation to devise legislation and measures applicable to companies with regard to the implementation of human rights. The recovery packages could also help states impose certain requirements on businesses to comply with human rights, as well as to reduce carbon emissions and preserve employment. That said, recovery packages should be accompanied by additional mechanisms so as to make sure that they’re implemented in a transparent manner.