I am posting and providing brief reflections on the essays that make up the excellent new online symposium organized by the marvelous Caroline Omari Lichuma and Lucas Roorda and appearing on the blog site of the Business and Human Rights Law Journal. Entitled Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe. The essays (and the symposium) means to expand the conversation about human rights from out of its hub in the UN apparatus in Geneva and begin exploring in more depth the sometimes extraordinary developments occurring outside the highest reaches of elite curation in the Global North.
The eleventh of the essays is Pradeep Narayanan, Dheeraj, and Jhumki Dutta, "Business Responsibility Reporting in India – Can it go Beyond the Global North Gaze?"
The marvelous contribution of Narayanan, Dheeaj and Dutta follows below and may be accessed as originally posted here. Among the important points raised in their essay the following resonated particularly strongly and may be worth deeper reflection:
1. One of the most interesting aspects of the Indian context, though one shared by States on the peripheries of the UNGP, is the dual tracking of the business and human rights enterprise. This parallels the dual tracking of engagements with global trade and production, the effects of which are most acutely felt on the periphery. On the one hand there is a sector of economic activity that is deeply tied to global trade, production, and the sensibilities of conduct and conduct expectations aligned to transnational elite networks who populate this space. That tends to get much of the attention. On the other hand, the local sectors tend to view themselves as existing on the peripheries of global production and are only peripherally concerned with its expectations (except as and to the extent they must deal with the actors in the transnational economy). For States at the peripheries that creates a double periphery: at the national level the State occupies a space on the peripheries of the UNGP; within the State the UNGP conversations stand at the peripheries of national conversations.
Despite integration into global supply chains of MNCs who wield significant power and influence within government policy circles, local businesses – except a few, used to ignore the concept of responsible business practices as a Western imposition irrelevant to the Global South context. In this journey, the Government of India deserves praise for launching the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) – an “Indian Narrative” on business and human rights in 2011 that predated the UN Guiding Principles (UNGP) by a few months. ("Business Responsibility Reporting in India – Can it go Beyond the Global North Gaze?").One saw variations in similar effects on the ground in, for example, Brazil, South Korea, and the Balkans. From the perspective of the business and human rights enterprise, then, the State is a disaggregated vessel for the insertion of international expectations at the top, and locally contextualized approaches at the bottom, with further divisions affecting the intensity of engagement and penetration by sector and the sources of production chain control centers. The challenges to sovereign control are substantial but already heralded by the elaboration of polycentric governance within the territories of States occupying a subaltern space in global production (my discussion here in the context of the Rana Plaza building collapse in Bangladesh).
2. Equally interesting is the discussion of the longer term and accumulating effects of mandatory reporting measures by the largest entities in India with the greatest connection to international production from a more privileged space. "Out of 1103 companies who reported during the financial year 2022-23, 68% serve markets outside India while 31% have plants or offices outside India. Preliminary analysis depicts that around 55 of these companies have promoter groups outside India." ("Business Responsibility Reporting in India – Can it go Beyond the Global North Gaze?"). Narayanan, Dheeraj, and Dutta note the dialectical quality of that improvement--annual iterations found improvements both in the quality of disclosure and in the quality of the disclosure template, the Business Responsibility & Sustainability Reporting Format. "In a way, a BRSR is actually a detailed HRDD report based on the company operations of that year. The National Guidelines on Responsible Business Conduct (NGRBC) acts as the foundation of the BRSR reporting template and together they give every business clear expectations and also ways of conducting themselves responsibly." ("Business Responsibility Reporting in India – Can it go Beyond the Global North Gaze?"). Their conclusion is positive though incremental:
Our analysis of these reports (Making Growth Inclusive – Analysing Inclusive Policies, Disclosures and Mechanisms of Top 100 Companies , 2015 -2018) indicate the following: (a) all companies do report mandatorily, and some companies continue reporting even after they fall from the top 100 radar, (b) the quality of reporting in the first year was poor, but improved in the first three years, and post that, they became routinised and (c) there has been improved uptake in terms of creating policies on various components of human rights and environment, but there is still a lag in disclosures on actual practices and outcomes. (Ibid.).3. The disclosure and reporting, however, also evidence the way that vectors of power and interest affect the scope and depth of disclosure. Narayanan, Dheeraj, and Dutta see "a notable gap between the interests of businesses and shareholders compared to those of communities and workers, further emphasized by a lack of policy commitments and transparency in the public domain. This gap underscores the necessity for constructive engagement, akin to citizens’ engagement with the government in the past." ("Business Responsibility Reporting in India – Can it go Beyond the Global North Gaze?"). Yet the touchstone is still a need to align connected enterprises with the expectation of global markets as a function of the space along production chains the reporting forms occupy.
4. It is here that the space between domestic and internationalized human rights expectations plays a key role. Effectively, internationalized Indian reporting companies can "offshore" human rights compliance domestically by strategically outsourcing human rights sensitive portions of production down national supply chains to enterprises operating out of a different set of rule/compliance expectations. All of this without leaving India. "Additionally, companies outsourcing core activities could be shifting responsibility for human rights violations further down the supply chain, where they may be less visible and harder to address. This trade-off is something that will likely haunt Indian businesses in the coming years." ("Business Responsibility Reporting in India – Can it go Beyond the Global North Gaze?"). The result is an incentive among key Indian enterprises (and domesticated offshore companies) to support a dual circulation economy in India, one outward facing and compliant with international standards (eg EU compliance structures and US sanctions regimes) and the other inward facing and protected against the inward projection of international expectations. The insulation of local business from international currents both preserves sovereign control of human rights discussions (and in some senses a protection against erosion of sovereign and democratic discussion and action) and may serve as an important strategic instrument for Indian participation in the larger international issues (climate change and the local context of international human rights principles.
5. Nonetheless, all of this might merely be the warm up to a most interesting set of insights; Narayanan, Dheeraj, and Dutta note that the focus on the remarkable evolution of the business and human rights landscape in India might well mask what they term "missing debates."
And that is the real challenge for the periphery--not so much the mechanics of escaping the position on the wrong side of global clientism, but the responsibility to look critically at one is left with through the lens of human rights. That, however, is a task that no State or social collective has yet managed to master and be able at the same time to have undertaken that task in a wholly human rights positive way. It may thus not be the gaze of the Global North that matters but the willingness of the Global South to gaze at its own image.First, current templates do not capture local linkages with global macro factors and that may consequently skew the "picture" painted in reporting. Moreover the due diligence project may "probably end up being co-opted by the “auditing” industry. Auditing or reporting in itself may not serve the purpose unless Global North based buyers also become more transparent and enhance capacity along the supply chain and realign their purchasing practices." ("Business Responsibility Reporting in India – Can it go Beyond the Global North Gaze?").
Second, Indian reporting regimes might be used to augment and direct policy based objectives by leveraging mandatory reporting responsibility measures elsewhere, for example those adopted in Nigeria and Switzerland, the object of which is to net zero carbon emissions. What is missing is the use of the template to jump start a just transitions discussion.
Third, business and human rights remains an elite sport in India, as it does in many other places downstream from apex production chain States. The current state of business and human rights measures failed to democratize and broaden the discussion and buy in from the mass of people who are both rights bearers and rights controller. The question, then, is whether and in what ways the Indian national BHR landscape ought to be subsumed within the larger international discussion. But might it also be worth discussing embedding in reverse? That is, it might be worth considering whether the internationalist business and human rights discussion, principles, application, and the like, ought to be considered with Indian characteristics--that is to bring the discussion down to the local rather than to require the local to internationalize in ways that could de-nature rights form context.
Fourth, it follows that internationalization discussions assume away the value of the local. That is based, in turn, on assumptions that the international normative frameworks "are apolitical and equally advantageous or disadvantageous for all countries and their economies. Basically, it is assumed that these instruments would contribute towards creating a win-win situation for all. However, there is cause for concern. "("Business Responsibility Reporting in India – Can it go Beyond the Global North Gaze?"). High on the list of off topic topics are the capitalist system; though ironically that remains very much on topic within elite academic and administrative circles in the Global North.
Fifth, if one is forced to focus on the local, then one might not like what one is forced to confront.
Privileges enjoyed by mainstream social identities are obscenely visible among board, senior and middle management, among permanent employees, and even among vendors and partnerships. If reporting templates had the gaze of an informal, unorganized, migrant, Dalit, differently-abled, transgender worker, the BRSR would get the real Global South gaze. (Ibid.).
Links to all Essays in the BHR Blog Symposium here:
Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe: Part 7: Sang Soo Lee--"BHR Regulations in South Korea: Achievements and Limitations"
Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe: Part 9: Cristiane Lucena Carneiro and Nathalie Albieri Laureano --"Regulatory Initiatives on Business and Human Rights in Brazil – From the Domestic to the International and Back? "Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe: Part 10: Lisa J, Laplante, "The United States 2024 National Action Plan on Responsible Business Conduct"
Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe: Part 11: Erika George and Enrique Samuel Martinez, "The Uyghur Forced Labor Prevention Act: An Assessment Of Enforcement Efforts"
Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe: Part 12: Pradeep Narayanan, Dheeraj, and Jhumki Dutta, "Business Responsibility Reporting in India – Can it go Beyond the Global North Gaze?"
Business Responsibility Reporting in India – Can it go Beyond the Global North Gaze?
In the Indian context, the last decade has seen significant leaps in the business and human rights domain. Despite integration into global supply chains of MNCs who wield significant power and influence within government policy circles, local businesses – except a few, used to ignore the concept of responsible business practices as a Western imposition irrelevant to the Global South context. In this journey, the Government of India deserves praise for launching the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) – an “Indian Narrative” on business and human rights in 2011 that predated the UN Guiding Principles (UNGP) by a few months. Furthermore, the Securities and Exchange Board of India’s (SEBI’s) mandate of mandatory Business Responsibility Reports (BRRs) for the top 100 listed companies (based on market capitalization), arguably the first of its kind globally, can be seen as an extension of the Human Right to Information applied to the corporate sector.
A Decade of Business Responsibility Reporting in India
Since 2012-13, the top 100 listed companies as per market capitalization are mandatorily reporting based on BRR template. However, from 2021-22, there was an improved template, the Business Responsibility and Sustainability Reporting (BRSR), mandating the top 1000 listed companies in India to make non-financial disclosures, with more questions, which gave a fresh impetus to disclosure movement. These are structured on the foundation of the revised NVGs in the form of the National Guidelines on Responsible Business Conduct (NGRBC). The Business Responsibility and Sustainability Reporting (BRSR) template comprises 140 questions, with approximately 65 directly addressing the UN Guiding Principles (UNGPs). These questions cover a wide array of human rights, including the Right to Equality, Rights of Persons with Disability, Employment, wages, Gender wage gap, Child labour, Bonded Labour, Sexual harassment, Discrimination at the workplace, Minimum Wage, Eleven Social security benefits, Career development, Occupational Safety and Health (OSH), Intellectual Property, Data Privacy, and Environment. Additionally, the template seeks information on human rights policies, policy-making processes, monitoring mechanisms, responses to human rights violations, and remediation measures. These inquiries extend beyond business operations to encompass the entire value chain. Further, companies have to disclose how this information finds a place in materiality discussions as well as in annual plans. In a way, a BRSR is actually a detailed HRDD report based on the company operations of that year. The National Guidelines on Responsible Business Conduct (NGRBC) acts as the foundation of the BRSR reporting template and together they give every business clear expectations and also ways of conducting themselves responsibly.
The reporting landscape of the top 1000 listed companies covers varied sectors with Finance (11.5%), Infrastructure & Construction (10.5%), Chemicals (8.9%), Pharmaceuticals (8.6%), Automobile (7.3%), ICT (7.3%), FMCG, Metal, Apparel (5 to 6 %) constituting the majority. Significantly, though listed in India these companies have a global footprint. Out of 1103 companies who reported during the financial year 2022-23, 68% serve markets outside India while 31% have plants or offices outside India. Preliminary analysis depicts that around 55 of these companies have promoter groups outside India.
Our analysis of these reports (Making Growth Inclusive – Analysing Inclusive Policies, Disclosures and Mechanisms of Top 100 Companies , 2015 -2018) indicate the following: (a) all companies do report mandatorily, and some companies continue reporting even after they fall from the top 100 radar, (b) the quality of reporting in the first year was poor, but improved in the first three years, and post that, they became routinised and (c) there has been improved uptake in terms of creating policies on various components of human rights and environment, but there is still a lag in disclosures on actual practices and outcomes.
Overall, the reporting trend between 2013 to 2021, points towards a notable gap between the interests of businesses and shareholders compared to those of communities and workers, further emphasized by a lack of policy commitments and transparency in the public domain. This gap underscores the necessity for constructive engagement, akin to citizens’ engagement with the government in the past. It’s imperative for businesses to recognize the value of such engagement, especially considering the increasing expectations within the global market, and how it can bolster their long-term sustainability. The consistency in scoring across various elements among the 97 cohort companies over three years underscores this need. There’s a notable improvement in disclosure concerning community development, with a majority of companies showing progress, alongside advancements in non-discrimination in the workplace. Legal safeguards are better established in these domains, particularly with the constitutional provisions and the Companies Act 2013, which have prompted significant policy changes. However, data points towards challenges, especially in areas such as inclusiveness in supply chains and community involvement as a business stakeholder, warranting legislative interventions.
Nevertheless, businesses used to be horrified by the term, human rights; and today more than 900 of the listed Indian companies have a policy on human rights! On the positive side, mandatory human rights reporting has spurred boardroom discussions on these issues and introduced formal processes for assessing human rights risks. This can potentially influence corporate decision-making. However, there are challenges. The strong focus on compliance might lead to a sanitised treatment of human rights, reducing them to a tick-box exercise. Additionally, companies outsourcing core activities could be shifting responsibility for human rights violations further down the supply chain, where they may be less visible and harder to address. This trade-off is something that will likely haunt Indian businesses in the coming years. As the global discourse on human rights intensifies and climate change concerns rise, investors may start linking violations with foreign investments.
The guidelines and reporting formats have set ground rules for ethical conduct on the part of businesses and assume that these would also instil behaviour and practice level changes while enhancing accountability. In light of these developments, certainly businesses have no excuse for not being responsible. But the larger questions remain: would we see businesses now standing up for the rights of workers and communities and the planet? The answer would probably be no, given the fact that there exists a very significant lacuna of validation of the information being provided as well as the absence of an ecosystem that could make businesses accountable for their disclosures. The reporting mechanism to an extent reflects the formal part of the economic activities and does not cover the data of the wider informalized networks of actors in the supply chain.
Missing Debates
While the availability of a wide spectrum of data opens opportunities for understanding corporate actions, it is important to also relate the existing data with inequities in supply chain mechanisms and its complexities. Some of the key debates are detailed below.
Firstly, reporting template mechanisms in each country often do not reflect the linkage with global or macro factors. As of now, the top 1000 listed companies in India based on market capitalisation are required to submit BRSR on an annual basis mandatorily. This institution is a way by which businesses as duty bearers would speak with citizens. For example, the information on child labour, wages, provision of social security benefits and on consumer rights that BRSR would contain- might lead to having a lot of information on child labour in the public domain duly signed by the companies. However, availability of information does not translate into improved outcomes. For instance, elimination of child labour is still not happening in some supply chains. Why is this the case? There are underlying global causes. The Global Supply Chain model pushes developing countries to compete as a manufacturing base (to attract investments and to increase exports), through the availability of buffer of cheap labour, which explains the huge distance between a big-brand in the Global North talking about living wages in various platforms whereas workers at the tier 4 level are still struggling for minimum wage. In other words, child labour issues in domestic supply chains can partly be traced back to pricing mechanisms, purchasing practices, and the distribution of costs and profits within the global value chain, factors which are particularly under the control of the Global North. Current top-down due diligence systems demand extensive information from the supply chain, but less from brands themselves regarding their purchasing practices and profit sharing and distribution.
The focus remains on due diligence which would probably end up being co-opted by the “auditing” industry. Auditing or reporting in itself may not serve the purpose unless Global North based buyers also become more transparent and enhance capacity along the supply chain and realign their purchasing practices. For instance, the Covid pandemic exposed the fault lines of the global supply chain mechanisms with many brands cancelling their orders without any backup mechanisms for suppliers. Question also remains whether such cancellations are still happening even though the pandemic is over. Relatedly, there is a growing fear that due diligence mechanisms without any supportive mechanism and sharing of data on equal footing among Global North and Global South actors may only force unhealthy competition among south-south businesses and countries. This may eventually lead to the race to the bottom while the fundamental aspect of economics remains in control of the Global North brands shielded by trade interests negotiated by Global North countries.
Secondly, with global laws, like Switzerland’s Federal Act on Climate protection goals and , Nigeria’s climate Change Act, mandatorily requiring their companies to become net-zero by 2050 and produce transition plans, the businesses in India through their disclosures on materiality and those on annual plans for the subsequent year, could actually contribute to the building of a national just transition narrative, evolving from business responsibility. While the Business Responsibility and Sustainability Reporting (BRSR) based on the National Guidelines on Responsible Business Conduct (NGRBC) is modelled on principles of Just Transition, there is a notable absence of a conscious effort to integrate the nine principles of NGRBC encompassing governance, environment, human rights, community development, and consumer rights. This integration is essential to develop a commonly accepted National Just Transition framework, which could effectively guide the energy transition efforts in India.
Thirdly, the groups that are promoting business and human rights are restricted to a few elites, many of whom are also working in a projectised way. There requires a lot of collective efforts- which would mean synergising and evolving common interest of upholding human rights among consumers, workers, citizens and Governments. Only then, would there be facilitating of more grounded debates around, say, economic dimensions of human rights like how profits are made; how profits are redistributed; how prices are fixed, what expenses are allocated for HRDD compliance in the supply chain. However, to push that, what is important is to have vibrant collective bargaining institutions for workers, consumers and communities, that have a bottom-up gaze.
Fourthly, in the currently evolving debates around human rights due diligence, the way the Global North tries to portray Corporate Sustainability Due Diligence efforts is that these are apolitical and equally advantageous or disadvantageous for all countries and their economies. Basically, it is assumed that these instruments would contribute towards creating a win-win situation for all. However, there is cause for concern. Raising certain questions can help decipher some of the challenges. Isn’t it true that any use of trade sanctions instruments like negative lists would arguably preserve the interests of the Global North. In other words, the main question is whether the instruments in the hands of Global North actors, including listing of products with traces of human rights violations in the value chain, will address the issues in the Global South? Isn’t it also true that trade negotiations would end up having a more effective outcome than the provisions of these laws? Additionally, isn’t it true that the current paradigm of capitalism and nation-state-based interests leaves very little space for collectivisation of the voices of Global South, workers and communities? There is rarely any discussions around the capitalist system per se.
Finally, the systems of race, disability, caste and patriarchy are huge elephants sitting in the corporate boardrooms in India. Privileges enjoyed by mainstream social identities are obscenely visible among board, senior and middle management, among permanent employees, and even among vendors and partnerships. If reporting templates had the gaze of an informal, unorganized, migrant, Dalit, differently-abled, transgender worker, the BRSR would get the real Global South gaze. The global south based supply chains in the Indian context are marred with massive informalisation and are reflective of the existing social hierarchy in form of gender, caste and ethnicity. The reporting frameworks fall short on capturing data on these aspects. Instead, the reporting systems tend to capture in most cases the tier 1 of the supply chains while most of the challenges around informalisation and gaps in social compliances continue to exist further down the supply chain. Global North actors need to make an extra attempt to understand these existing power imbalances and related dynamics in the global supply chain mechanisms.
While India’s BRSR holds promise, a truly ‘Global South gaze’ would encourage a shift from compliance-driven reports to a system empowering workers, especially marginalized communities, to hold businesses accountable. This requires dismantling the power imbalance not only between Global North and Global South in bilateral and multilateral trade and investment negotiations and fostering vibrant collective bargaining structures, but also such adverse power relationships that emanate owing to patriarchy, racism and caste systems. Only then can BRSR reports become a tool for genuine social and economic justice, moving beyond a mere echo of the Global North’s agenda. And for BRSR to move beyond the Global North’s gaze, collective action from consumers, workers, and government is needed to ensure responsible business conduct throughout the supply chain.
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