05 08 2017 Presentation

Human Rights in Business
What do we understand by Human Rights ?
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Human rights are commonly understood as "fundamental rights to which a person is
inherently entitled simply because she or he is a human being."
Universal (applicable everywhere) and

Egalitarian (the same for everyone).
Human rights movement developed in the aftermath of the Second World War and
the atrocities of The Holocaust, culminating in adoption of Universal Declaration of
Human Rights.
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Universal Declaration of Human Rights
- was adopted by the United Nations General Assembly in 1948
- As a common standard of achievements for all peoples and all nations. It set
out, for the first time, fundamental human rights to be universally protected
- Is an international document that states basic rights and fundamental

freedoms to which all human beings are entitled.
-They are the inalienable entitlements of all people, at all times, and in all
places — people of every color, from every race and ethnic group; whether or
not they are disabled; citizens or migrants; no matter their gender, their class,
their caste, their creed, their age etc.
- The 30 Articles of UDHR promises to all the economic, social, political, cultural
and civic rights that underpin a life free from want and fear.
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The responsibility of business enterprises to respect human rights refers to
internationally recognized human rights .An authoritative list of the core
internationally recognized human rights is contained in the International Bill of
Human Rights (consisting of the Universal Declaration of Human Rights and the
main instruments through which it has been codified: the International Covenant
on Civil and Political Rights and the International Covenant on Economic, Social
and Cultural Rights), coupled with the principles concerning fundamental rights in
the eight ILO core conventions as set out in the Declaration on Fundamental
Principles and Rights at Work. These are the benchmarks against which other social
actors assess the human rights impacts of business enterprises.
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ILO Declaration on Fundamental Principles and Rights at Work
The main aims of the ILO are to promote rights at work, encourage decent
employment opportunities, enhance social protection and strengthen dialogue
on work-related issues.
Adopted in 1998, the Declaration commits Member States to respect and

promote principles and rights in four categories, whether or not they have
ratified the relevant Conventions.
These categories are: freedom of association and the effective recognition of

the right to collective bargaining, the elimination of forced or compulsory
labor, the abolition of child labor and the elimination of discrimination in
respect of employment and occupation.
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The eight ILO fundamental Conventions are:
1. Freedom of Association and Protection of the Right to Organize Convention, 1948

2. Right to Organize and Collective Bargaining Convention, 1949
3. Forced Labor Convention, 1930
4. Abolition of Forced Labor Convention, 1957
5. Minimum Age Convention, 1973
6. Worst Forms of Child Labor Convention, 1999
7. Equal Remuneration Convention, 1951
8. Discrimination (Employment and Occupation) Convention, 1958
Universal Declaration of Human Rights
Article 1.
All human beings are born free and equal in dignity and rights. They are
endowed with reason and conscience and should act towards one another in
a spirit of brotherhood.
Article 2.
Everyone is entitled to all the rights and freedoms set forth in this
Declaration, without distinction of any kind, such as race, color, gender,
language, religion, political or other opinion, national or social origin,
property, birth or other status. Furthermore, no distinction shall be made on
the basis of the political, jurisdictional or international status of the country
or territory to which a person belongs, whether it be independent, trust, non-
self-governing or under any other limitation of sovereignty.
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Article 3, the first cornerstone of the Declaration, proclaims the right to life, liberty
and security of person –a right essential to the enjoyment of all other rights.
Article 3 introduces articles 4 to 21, in which other civil and political rights are set
out, including: freedom from slavery and servitude; freedom from torture and cruel,
inhuman or degrading treatment or punishment; the right to recognition everywhere
as a person before the law; the right to an effective judicial remedy; freedom from
arbitrary arrest, detention or exile; the right to a fair trial and public hearing by an
independent and impartial tribunal; the right to be presumed innocent until proved
guilty; freedom from arbitrary interference with privacy, family, home or
correspondence; freedom of movement and residence; the right of asylum; the right
to a nationality; the right to marry and to found a family; the right to own property;
freedom of thought, conscience and religion; freedom of opinion and expression;
the right to peaceful assembly and association; and the right to take part in the
government of one's country and to equal access to public service in one's country.
The economic, social and cultural rights recognized in articles 22 to 27 include the
right to social security; the right to work; the right to equal pay for equal work; the
right to rest and leisure; the right to a standard of living adequate for health and
well-being; the right to education; and the right to participate in the cultural life of
the community
The concluding articles, articles 28 to 30, recognize that everyone is entitled to a

social and international order in which the human rights and fundamental
freedoms set forth in the Declaration may be fully realized, and stress the duties
and responsibilities which each individual owes to his community
Universal Declaration of Human Rights ( Cont.)
Article 4.
No one shall be held in slavery or servitude; slavery and the slave trade shall
be prohibited in all their forms.
Article 5.
No one shall be subjected to torture or to cruel, inhuman or degrading
treatment or punishment.
Article 6.
Everyone has the right to recognition everywhere as a person before the law.
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Article 7
All are equal before the law and are entitled without any discrimination to equal
protection of the law. All are entitled to equal protection against any discrimination
in violation of this Declaration and against any incitement to such discrimination.
Article 8.
Everyone has the right to an effective remedy by the competent national tribunals
for acts violating the fundamental rights granted him by the constitution or by law.
Article 9.
No one shall be subjected to arbitrary arrest, detention or exile.
Article 10.
Everyone is entitled in full equality to a fair and public hearing by an independent
and impartial tribunal, in the determination of his rights and obligations and of any
criminal charge against him.
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Article 11
Everyone charged with a penal offence has the right to be presumed innocent until
proved guilty according to law in a public trial at which he has had all the guarantees
necessary for his defence. No one shall be held guilty of any penal offence on
account of any act or omission which did not constitute a penal offence, under
national or international law, at the time when it was committed. Nor shall a heavier
penalty be imposed than the one that was applicable at the time the penal offence
was committed.
Article 12
No one shall be subjected to arbitrary interference with his privacy, family, home
or correspondence, nor to attacks upon his honor and reputation. Everyone has the
right to the protection of the law against such interference or attacks
Article 13
Everyone has the right to freedom of movement and residence within the borders
of each State. Everyone has the right to leave any country, including his own, and to
return to his country.
Article 14
Everyone has the right to seek and to enjoy in other countries asylum from
persecution.This right may not be invoked in the case of prosecutions genuinely
arising from non-political crimes or from acts contrary to the purposes and
principles of the United Nations
Article 15
Everyone has the right to a nationality. No one shall be arbitrarily deprived of his
nationality nor denied the right to change his nationality.
Article 16
Men and women of full age, without any limitation due to race, nationality or
religion, have the right to marry and to found a family. They are entitled to equal
rights as to marriage, during marriage and at its dissolution. Marriage shall be
entered into only with the free and full consent of the intending spouses. The
family is the natural and fundamental group unit of society and is entitled to
protection by society and the State
Article 17
Everyone has the right to own property alone as well as in association with
others. No one shall be arbitrarily deprivedof his property.
Article 18
Everyone has the right to freedom of thought, conscience and religion; this right
includes freedom to change his religion or belief, and freedom, either alone or in
community with others and in public or private, to manifest his religion or belief in
teaching, practice,worship and observance.
Article 19
Everyone has the right to freedom of opinion and expression; this right includes
freedom to hold opinions without interference and to seek, receive and impart
information and ideas through any media and regardless of frontiers
Article 20
Everyone has the right to freedom of peaceful assembly and association. No one
may be compelled to belong to an association.
Article 21
Everyone has the right to take part in the government of his country, directly or
through freely chosen representatives. Everyone has the right to equal access to
public service in his country. The will of the people shall be the basis of the
authority of government; this will shall be expressed in periodic and genuine
elections which shall be by universal and equal suffrage and shall be held by secret
vote or by equivalent free voting procedures.
Article 22
Everyone, as a member of society, has the right to social security and is entitled
to realization, through national effort and international cooperation and in
accordance with the organization and resources of each State, of the economic,
social and cultural rights indispensable for his dignity and the free development of
his personality.
Article 23.
(1) Everyone has the right to work, to free choice of employment, to just and
favourable conditions of work and to protection against unemployment.
(2) Everyone, without any discrimination, has the right to equal pay for
equal work.
(3) Everyone who works has the right to just and favourable remuneration
ensuring for himself and his family an existence worthy of human dignity,
and supplemented, if necessary, by other means of social protection.
(4) Everyone has the right to form and to join trade unions for the protection
of his interests.
Article 24.
Everyone has the right to rest and leisure, including reasonable limitation of
working hours and periodic holidays with pay.
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Article 25.
1. Everyone has the right to a standard of living adequate for the health and well-
being of himself and of his family, including food, clothing, housing and medical care
and necessary social services, and the right to security in the event of unemployment,
sickness, disability, widowhood, old age or other lack of livelihood in circumstances
beyond his control.
(2) Motherhood and childhood are entitled to special care and assistance. All children,
whether born in or out of wedlock, shall enjoy the same social protection.
Article 26.
(1) Everyone has the right to education. Education shall be free, at least in the
elementary and fundamental stages. Elementary education shall be compulsory.
Technical and professional education shall be made generally available and higher
education shall be equally accessible to all on the basis of merit.
(2) Education shall be directed to the full development of the human personality and
to the strengthening of respect for human rights and fundamental freedoms. It shall
promote understanding, tolerance and friendship among all nations, racial or religious
groups, and shall further the activities of the United Nations for the maintenance of
peace.
(3) Parents have a prior right to choose the kind of education that shall be given to
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their children.
Article 27
Everyone has the right freely to participate in the cultural life of the community, to
enjoy the arts and to share in scientific advancement and its benefits . Everyone has the
right to the protection of the moral and material interests resulting from any scientific,
literary or artistic production of which he is the author.
Article 28
Everyone is entitled to a social and international order in which the rights and freedoms
set forth in this Declaration can be fully realized.
Article 29
Everyone has duties to the community in which alone the free and full development
of his personality is possible. In the exercise of his rights and freedoms, everyone shall
be subject only to such limitations as are determined by law solely for the purpose of
securing due recognition and respect for the rights and freedoms of others and of
meeting the just requirements of morality, public order and the general welfare in a
democratic society. These rights and freedoms may in no case be exercised contrary to
the purposes and principles of the United Nations.
Article 30
Nothing in this Declaration may be interpreted as implying for any State, group or
person any right to engage in any activity or to perform any act aimed at the destruction
of any of the rights and freedoms set forth herein.
Any Corporate Examples of Human Rights Violation ?
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Example
Child labor in Sivakasi Fire works Industry ,
Nestle - Child labor in cocoa farms
Slavery in supply chain of Thailand food Industry
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Asian slave labor producing prawns for supermarkets in US, UK
Slaves forced to work for no pay for years at a time under threat of extreme violence
are being used in Asia in the production of seafood sold by major US, British and
other European retailers
The investigation found that the world's largest prawn farmer, the Thailand-based
Charoen Pokphand (CP) Foods, buys fishmeal, which it feeds to its farmed prawns,
from some suppliers that own, operate or buy from fishing boats manned with
slaves.
A six-month investigation has established that large numbers of men bought and
sold like animals and held against their will on fishing boats off Thailand are
integral to the production of prawns (commonly called shrimp in the US) sold in
leading supermarkets around the world, including the top four global retailers:
Walmart, Carrefour, Costco and Tesco
Men who have managed to escape from boats supplying CP Foods and other
companies like it told the Guardian of horrific conditions, including 20-hour shifts,
regular beatings, torture and execution-style killings. Some were at sea for years;
some were regularly offered methamphetamines to keep them going. Some had
seen fellow slaves murdered in front of them. 22
Fifteen migrant workers from Burma and Cambodia also told how they had been
enslaved. They said they had paid brokers to help them find work in Thailand in
factories or on building sites. But they had been sold instead to boat captains,
sometimes for as little as £250.
"I thought I was going to die," said Vuthy, a former monk from Cambodia who was sold
from captain to captain. "They kept me chained up, they didn't care about me or give
me any food … They sold us like animals, but we are not animals – we are human
beings."
Another trafficking victim said he had seen as many as 20 fellow slaves killed in front
of him, one of whom was tied, limb by limb, to the bows of four boats and pulled
apart at sea.
"We'd get beaten even if we worked hard," said another. "All the Burmese, [even] on
all the other boats, were trafficked. There were so many of us [slaves] it would be
impossible to count them all."
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The International Labour Organization (ILO) estimates that almost 21 million
people are currently working in some form of forced labour.
In a world of complex supply chains, migrant workers, sub-suppliers and a

constant squeeze on costs, corporate leaders and their stakeholders are keenly
aware of the risk of labour exploitation.
The United States Department of Labor, for example, has produced a list of 136
goods produced in 74 countries using forced labour, child labour, or both.
These goods include everything from strawberries, coffee, chocolate and palm
oil to footballs, bricks, rubber and cotton.
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UN Initiatives to address Business and Human Rights :
1. UN Norms on responsibility of Transnational Corporations and other

business enterprises with respect to human rights
2 . UN Guiding Principles on Business and Human Rights
3. UN Global Compact
1.
UN Norms on responsibility of Transnational Corporations and other
business enterprises with respect to human rights
The norms recognize six groups of rights: right to equal opportunity and non-
discriminatory treatment; right to security of persons; workers' rights; respect for
national sovereignty and human rights; consumer protection; environmental protection
First, responsibility of companies to use due diligence in ensuring that their activities do
not contribute directly or indirectly to human rights abuses.
Second, responsibility of companies to ensure that they do not benefit directly or

indirectly from those abuses.
Third, the companies' responsibility are to refrain from undermining efforts to promote
and ensure respect for human rights.
Fourth. the companies' responsibility to use their influence to promote respect for
human rights.
Fifth. the companies• responsibility to assess their human lights impact.
Sixth, the companies responsibility to avoid complicity in human rights abuses.

UNHR Office of High Commissioner ( 2011 )
Guiding Principles on Business and Human Rights
Implementing United Nations ‘Protect, Respect and Remedy’ Framework"
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Guiding Principles on Business and Human Rights
• The State Duty to Protect Human Rights
• The Corporate Responsibility to Respect Human Rights
• Access to Remedy
The corporate responsibility to respect human rights
Foundational Principles
11.Business enterprises should respect human rights. This means that they
should avoid infringing on the human rights of others and should address
adverse human rights impacts with which they are involved.
The responsibility to respect human rights is a global standard of expected

conduct for all business enterprises wherever they operate. It exists
independently of States’ abilities and/or willingness to fulfill their own human
rights obligations, and does not diminish those obligations. And it exists over and
above compliance with national laws and regulations protecting human rights.
Addressing adverse human rights impacts requires taking adequate measures
for their prevention, mitigation and, where appropriate, remediation.
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12 The responsibility of business enterprises to respect human rights
refers to internationally recognized human rights – understood, at a
minimum, as those expressed in the International Bill of Human Rights
and the principles concerning fundamental rights set out in the
International Labour Organization’s Declaration on Fundamental
Principles and Rights at Work.
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An authoritative list of the core internationally recognized human rights is
contained in the International Bill of Human Rights (consisting of the Universal
Declaration of Human Rights and the main instruments through which it has been
codified: the International Covenant on Civil and Political Rights and the
International Covenant on Economic, Social and Cultural Rights), coupled with the
principles concerning fundamental rights in the eight ILO core conventions as set
out in the Declaration on Fundamental Principles and Rights at Work. These are
the benchmarks against which other social actors assess the human rights impacts
of business enterprises.
The responsibility of business enterprises to respect human rights is distinct from

issues of legal liability and enforcement, which remain defined largely by national
law provisions in relevant jurisdictions.
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13. The responsibility to respect human rights requires that business
enterprises: ( Includes value chain and Business partners )
(a) Avoid causing or contributing to adverse human rights impacts

through their own activities, and address such impacts when they
occur;
(b) Seek to prevent or mitigate adverse human rights impacts that are directly linked
to their operations, products or services by their business relationships, even if they
have not contributed to those impacts.
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14. The responsibility of business enterprises to respect human rights applies
to all enterprises regardless of their size, sector, operational context,
ownership and structure. Nevertheless, the scale and complexity of the means
through which enterprises meet that responsibility may vary according to
these factors and with the severity of the enterprise’s adverse human rights
impacts.
Severity of impacts will be judged by their scale, scope and irremediable

character.
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15. In order to meet their responsibility to respect human rights, business
enterprises should have in place policies and processes appropriate to their size
and circumstances, including:
(a) A policy commitment to meet their responsibility to respect human rights;

(b) A human rights due diligence process to identify, prevent, mitigate and
account for how they address their impacts on human rights;
(c) Processes to enable the remediation of any adverse human rights impacts
they cause or to which they contribute
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Business enterprises need to know and show that they respect
human rights.
They cannot do so unless they have certain policies and processes in

place.
Principles 16 to 24 elaborate further on these
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B. Operational principles
Policy commitment
16. As the basis for embedding their responsibility to respect human rights,
business enterprises should express their commitment to meet this responsibility
through a statement of policy that:
(a) Is approved at the most senior level of the business enterprise;
(b) Is informed by relevant internal and/or external expertise;
(c) Stipulates the enterprise’s human rights expectations of personnel, business
partners and other parties directly linked to its operations, products or services;
(d) Is publicly available and communicated internally and externally to all personnel,
business partners and other relevant parties;
(e) Is reflected in operational policies and procedures necessary to embed it
throughout the business enterprise.
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Human rights due diligence
17. In order to identify, prevent, mitigate and account for how they address their
adverse human rights impacts, business enterprises should carryout human rights
due diligence. The process should include assessing actual and potential human rights
impacts, integrating and acting upon the findings, tracking responses, and
communicating how impacts are addressed.
Human rights due diligence:

(a) Should cover adverse human rights impacts that the business enterprise may cause
or contribute to through its own activities, or which may be directly linked to its
operations, products or services by its business relationships;
b)Will vary in complexity with the size of the business enterprise, the risk
of severe human rights impacts, and the nature and context of its
operations;
(c) Should be ongoing, recognizing that the human rights risks may
change over time as the business enterprise’s operations and operating
context evolve.
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This Principle 17 defines the parameters for human rights due diligence, while
Principles 18 through 21 elaborate its essential components.
Human rights risks are understood to be the business enterprise’s potential

adverse human rights impacts. Potential impacts should be addressed through
prevention or mitigation, while actual impacts – those that have already occurred –
should be a subject for remediation
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18. In order to gauge human rights risks, business enterprises should
identify and assess any actual or potential adverse human rights
impacts with which they may be involved either through their own
activities or as a result of their business relationships. This process
should:
(a) Draw on internal and/or independent external human rights expertise;
(b) Involve meaningful consultation with potentially affected groups and other
relevant stakeholders, as appropriate to the size of the business enterprise
and the nature and context of the operation.
Because human rights situations are dynamic, assessments of human

rights impacts should be undertaken at regular intervals: prior to a new
activity or relationship; prior to major decisions or changes in the operation(e.g.
market entry, product launch, policy change, or wider changes to the business); in
response to or anticipation of changes in the operating environment (e.g. rising
social tensions); and periodically throughout the life of an activity or relationship.
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19. In order to prevent and mitigate adverse human rights impacts, business
enterprises should integrate the findings from their impact assessments across
relevant internal functions and processes, and take appropriate action.
(a) Effective integration requires that:
(i) Responsibility for addressing such impacts is assigned to the
appropriate level and function within the business enterprise;
(ii) Internal decision-making, budget allocations and oversight processes enable
effective responses to such impacts.
(b) Appropriate action will vary according to:

(i) Whether the business enterprise causes or contributes to an adverse impact, or
whether it is involved solely because the impact is directly linked to its operations,
products or services by a business relationship;
(ii) The extent of its leverage in addressing the adverse impact.
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20. In order to verify whether adverse human rights impacts are being
addressed, business enterprises should track the effectiveness of their
response. Tracking should:
(a) Be based on appropriate qualitative and quantitative indicators;

(b) Draw on feedback from both internal and external sources, including affected
stakeholders
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21. In order to account for how they address their human rights impacts, business
enterprises should be prepared to communicate this externally, particularly when
concerns are raised by or on behalf of affected stakeholders. Business enterprises
whose operations or operating contexts pose risks of severe human rights impacts
should report formally on how they address them. In all instances, communications
should:
(a) Be of a form and frequency that reflect an enterprise’s human rights impacts
and that are accessible to its intended audiences;
(b) Provide information that is sufficient to evaluate the adequacy of an
enterprise’s response to the particular human rights impact involved;
(c) In turn not pose risks to affected stakeholders, personnel or to legitimate
requirements of commercial confidentiality.
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Remediation
22. Where business enterprises identify that they have caused or
contributed to adverse impacts, they should provide for or cooperate in
their remediation through legitimate processes
Issues of context
23. In all contexts, business enterprises should:
(a) Comply with all applicable laws and respect internationally
recognized human rights, wherever they operate;
(b) Seek ways to honor the principles of internationally recognized
human rights when faced with conflicting requirements;
(c) Treat the risk of causing or contributing to gross human rights
abuses as a legal compliance issue wherever they operate
24. Where it is necessary to prioritize actions to address actual and

potential adverse human rights impacts, business enterprises should
first seek to prevent and mitigate those that are most severe or where
delayed response would make them irremediable.
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Global Compact
What is the Global Compact?
•In an address to the World Economic Forum on 31 January 1999,

the former Secretary-General of the United Nations, Kofi Annan,
challenged business leaders to join an international initiative – the
Global Compact – that would bring companies together with
UN agencies, labor and civil society to support universal
environmental and social principles. The Global Compact’s
Operational phase was launched at UN Headquarters in New York
on 26 July 2000.
• Today, thousands of companies from all regions of the world,

international labor and civil society organizations are engaged
in the Global Compact, working to advance ten universal principles
in the areas of human rights, labor, the environment and
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anti-corruption
•Through the power of collective action, the Global Compact seeks to
promote responsible corporate citizenship so that business can be part
of the solution to the challenges of globalization. In this way, the
private sector – in partnership with other social actors – can help
realize the Secretary-General’s vision: a more sustainable and
inclusive global economy.
•The Global Compact is a purely voluntary initiative with two

objectives
-Mainstream the ten principles in business activities around the world

-Catalyse actions in support of UN goals
•To achieve these objectives, the Global Compact offers facilitation and
engagement through several mechanisms: Policy Dialogues, Learning,
Country/Regional Networks, and Partnership Projects.
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The Global Compact is not a regulatory instrument – it does not
“police”, enforce or measure the behavior or actions of companies.
Rather, the Global Compact relies on public accountability,
transparency and the enlightened self-interest of companies, labor
and civil society to initiate and share substantive action in pursuing
the principles upon which the Global Compact is based.
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The Ten Principles of Global Compact
The Global Compact asks companies to embrace, support and
enact, within their sphere of influence, a set of core values in
the areas of human rights, labor standards, the environment, and
anti-corruption:
Human Rights
•Principle 1: Businesses should support and respect the protection of
internationally proclaimed human rights;
The responsibility for human rights does not rest with governments
or nation states alone. Human rights issues are important both for
individuals and the organisations that they create. As part of its
commitment to the Global Compact, the business community has
a responsibility to uphold human rights both in the workplace and
more broadly within its sphere of influence. A growing moral
imperative to behave responsibly is allied to the recognition that a
good human rights record can support improved business performance.
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•Principle 2:make sure that they are not complicit in human
rights abuses.
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Labor Standards
•Principle 3 : Businesses should uphold the freedom of association and
the effective recognition of the right to collective bargaining;
Freedom of association implies a respect for the right of employees and

workers to join associations of their own choice. It does not mean that
workforces must be organized or that companies must invite unions .
Employers should not interfere in an employee's decision to associate,
or discriminate against the employee or a representative of the employee.
Collective bargaining is a voluntary process used to determine terms and

conditions of work and the regulation of relations between employers,
workers and their organizations.
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What companies can do:
In the workplace
•Ensure that all workers are able to form and join a trade union of their
choice without fear of intimidation or reprisal.
•Ensure union-neutral policies and procedures in such areas as

applications for employment and record-keeping; and decisions on
advancement, dismissal or transfer.
•Provide facilities to help worker representatives carry out their

functions within the company's needs, size and capabilities.
•These facilities include the ability to collect union dues on company

premises, posting of trade union notices, and distribution of union
documents related to normal trade union activities in the enterprise,
and time-off with pay for union activities.
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•Principle 4: The elimination of all forms of forced and compulsory
labor;
Forced or compulsory labor is any work or service that is extracted

from any person under the menace of any penalty, and for which that
person has not offered himself or herself voluntarily. Providing wages
or other compensation to a worker does not necessarily indicate that the
labor is not forced or compulsory. By right, labor should be freely
given and employees should be free to leave in accordance with
established rules.
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Principle 5: the effective abolition of child labor;
ILO conventions recommend a minimum age for admission to

employment or work that must not be less than the age for completing
compulsory schooling, and in any case not less than 15 years. Lower ages
are permitted - generally in countries where economic and educational
facilities are less well-developed the minimum age is 14 years and 13 year
for 'light work'. On the other hand the minimum age for hazardous work
is higher at 18 years.
Developed countries Developing countries
Light Work 13 Years Light Work 12 Years
Regular Work 15 Years Regular Work 14 Years
Hazardous Work 18 Years Hazardous Work 18 Years
Priority is given to eliminating, for all persons under the age of

18, the worst forms of child labor, including hazardous types of
work or employment
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•Principle 6: the elimination of discrimination in respect of
employment and occupation.
The definition of discrimination in employment and occupation is

"any distinction, exclusion or preference which has the effect of
nullifying or impairing equality of opportunity or treatment in
employment or occupation", and is made on the basis of "race,
colour, gender, religion, political opinion, national extraction or social
origin". Discrimination may also occur on the basis of physical or
mental disability. Obviously, distinctions based strictly on the
inherent requirements of the job are not discrimination.
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Environment
•Principle 7: Businesses should support a precautionary approach
to environmental challenges;
The Rio Declaration firmly established the link between environmental

issues and development by stating that:
"...in order to achieve sustainable development, environmental protection

shall constitute an integral part of the development process and cannot
be considered in isolation from it."
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The Rio Declaration sets out an extremely important idea, now
widely accepted by policy makers, of a precautionary approach to
environmental protection -
"In order to protect the environment, the precautionary approach

shall be widely applied by States according to their capabilities.
Where there are threats of serious or irreversible damage, lack of
full scientific certainty shall not be used as a reason for postponing
cost-effective measures to prevent environmental degradation
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•Principle 8: undertake initiatives to promote greater environmental
responsibility;
The Rio Earth Summit in 1992 acted as a 'wake-up call' for many parts
of society, not least of which the business sector. For the first time a
comprehensive group of stakeholders gathered together to discuss the
issues raised by the patterns of industrialization, population growth and
social inequality around the world. The conference highlighted the true
fragility of the planet and in particular it drew attention to three concerns:
•the damage occurring to many natural ecosystems,
•the threatened capacity of the planet to support life in the future, and
•our ability to sustain long term economic and social development.
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The message to companies spelt out the role of business and industry
in the sustainable development agenda is discussed. And an outline
of what environmental responsibility means for business is presented -
"[the] responsible and ethical management of products and processes

from the point of view of health, safety and environmental aspects.
Towards this end, business and industry should increase self-regulation,
guided by appropriate codes, charters and initiatives integrated into all
elements of business planning and decision-making, and fostering
openness and dialogue with employees and the public."
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•Principle 9: encourage the development and diffusion of
environmentally friendly technologies
Encouraging the development and diffusion of environmentally friendly

technology is a longer-term challenge for a company that will draw on
both the management and research capabilities of the organization.
For the purposes of engaging with the Global Compact, environmentally
friendly technologies are considered to be those which -
"...protect the environment, are less polluting, use all resources in a

more sustainable manner, recycle more of their wastes and products,
and handle residual wastes in a more acceptable manner than the
technologies for which they were substitutes. [ESTs] are not just
individual technologies, but total systems which include know-how,
procedures, goods and services, and equipment as well as
organizational and managerial processes."
58
Important here is an understanding that this broad definition includes
end-of-pipe and monitoring techniques but that explicitly encourages
more progressive preventative approaches, such as pollution
prevention and cleaner production technologies. The aspiration of
this principle is, therefore, towards clean technology where the
function is to provide a human benefit or service, rather than
concentrating on products per se.
Anti-Corruption
•Principle 10: Businesses should work against corruption in all its
forms, including extortion and bribery.
The adoption of the tenth principle commits UN Global Compact

participants not only to avoid bribery, extortion and other forms of
corruption, but also to develop policies and concrete programs to
address corruption. Companies are challenged to join governments,
UN agencies and civil society to realize a more transparent global
economy. 59
GE Approach towards Human Rights Protection ( Ref. GE Sustainability Report )
As a diversified, global company with growth in emerging markets, and as a provider

of infrastructure around the world, GE regularly confronts complex human rights
challenges. Our approach to those challenges starts with the Company’s Statement
of Principles on Human Rights, which outlines our commitment to respecting
human rights wherever we operate and to demanding the same commitment from
our business partners. To embed this commitment within our business operations,
we have developed human rights “implementing procedures” that help our
businesses incorporate human rights considerations in all aspects of their
operations.
60
GE Approach towards Human Rights Protection ( Ref. GE Sustainability Report)
With the adoption by the UN Human Rights Commission of the UN Guiding

Principles on Human Rights and Business in 2012, there was for the first time a
broad agreement on a human rights framework: the states’ duty to protect,
businesses’ duty to respect, and the mutual duty to address human rights
deprivations. Despite this agreed-upon framework, however, there remains
government and NGO pressure for increased “hard law” in this space, from
legislation mandating specific due-diligence measures and regulations requiring
transparency and reporting to broad national action plans and even suggestions of
a global treaty on human rights. We believe the Guiding Principles provide the
fairest and most realistic framework for protecting human rights globally, but we
recognize that for the Principles to succeed business entities like GE need to
“know and show” that they have robust programs for fulfilling their responsibility
to respect human rights.
One good example of GE’s approach to unique human rights challenges

concerns our work in some countries where the role of women is
restricted. Specifically, we have been undertaking an innovative business
approach in Saudi Arabia to empowering women in the Middle East. That
work recently led to GE’s receiving the 2017 U.S. Department of State’s Global
Award for Corporate Excellence (ACE) for our inclusive hiring practices in Saudi
Arabia, underlined by the GE-sponsored All-Women Business Process & IT
Services Center in Riyadh.
62
The scourge of forced labour is a human rights priority globally , especially in

widespread supply chains. One global regulatory response has been the requirement
that corporations report on their efforts to prevent modern slavery in their
operations and those of their suppliers .
GE has published such reports in response to regulations in California and UK. GEs
first UK Modern Slavery Act Transparency Statement , published in 2017, describes
the efforts we have taken to prevent forced labour where we operate and do
business , including updated policies prohibiting practices that lead to modern
slavery , new forced – labour training for supply chain auditors , continued
implementation of global supply chain audit program , and collaboration with global
associations such as the Electronics Industry Citizenship Coalition and the Institute for
Human Rights and Business to find better ways to address this problem .
GE remains committed to respecting not only the human rights of our own
employees, but also those of our partners’ employees and the members of the
communities where we operate. Such respect is a foundational requirement of both
our GE and Supplier Integrity programs, and we seek to drive compliance through
continued improvement in audit techniques, workers’ voice programs, and employee
training.
We also believe collaboration and best-practice sharing, through organizations such as

the Global Business Initiative for Human Rights—of which GE is a founding
member—help companies work together toward the common goal of upholding the
principles first laid out by the United Nations in 1948, with its historic issuance of the
UN Declaration on Human Rights.
64
Sexual Harassment at Workplace
B.R. Ambedkar, the architect of the Indian Constitution, once stated that the
measure of progress of a community is the degree of progress achieved by its
women. Financial independence and education are two of the most essential
sources of women’s progress and empowerment.
However, the process of achieving financial independence is often plagued with

sexual harassment in the workplace, experienced by many women
Sexual Harassment is deeply rooted in the patriarchal societal setup where male
power dominates.
It can be seen as a form of discrimination based on gender since the expression

of sexuality in the workplace is considered prejudicial to the dignity of women,
aimed to maintain the system of exploitation based on unequal economic and
social structures thriving in an atmosphere of threat, terror and reprisal.
65
This is particularly true in India, where there is a deep rooted gender bias against
women, manifesting itself in high rates of female infanticide and sexual violence
against women.
Thus, essentially, sexual harassment constitutes one of the components of the

wider problem of gender based discrimination against women. It seeks to
institutionalize the subordination of women.
66
The very notion of Sexual Harassment in the workplace intrinsically violates certain
fundamental rights guaranteed to the citizens of India, enshrined in and protected by
the Indian Constitution. Thus, any act or conduct amounting to sexual harassment is
against the very basic structure of The Constitution of India that seeks to ensure and
safeguard the dignity of its citizens.
Such provisions are:
1. Article 14: Equality before the law or the equal protection of the law.
2. Article 15: Prohibition of discrimination on the grounds of gender.
3. Article 19: Right to practice any profession or to carry out any occupation, trade or
business which right includes within its ambit “a right to a safe environment free from
sexual harassment.”
4. Article 21: Right to life and personal liberty which includes right to life with dignity.
67
The offence of Sexual Harassment in India had no statutory reference till as late as
1997
There was no legal obligation upon institutions or management to protect and
prevent women employees from experiencing sexual harassment.
The Indian Judiciary, for the first time in Vishaka vs. State of Rajasthan gave voice to
the rising concerns of sexual harassment by laying down a formal procedure to
check harassment in the workplace.
The newly adopted definition of sexual harassment was in tandem with that laid
down by CEDAW, United Nations Convention on the Elimination of all Forms of
Discrimination against Women which came into force in 1979. India signed the
Convention on 30 July 1980 and ratified it on 9th July 1993 (with certain
reservations).
The court laid down certain guidelines to ensure a safe and conducive working
environment for women in their workplaces.
68
Vishaka Guidelines were clearly put forth .
The Vishaka Case brought to the fore the institutional manifestation of gender
inequality in workplaces in the form of sexual harassment. The Apex Court in its
decision equated a safe and healthy working condition as a requisite for human
dignity under the Right to Life clause of the Indian Constitution.
By laying down strict guidelines to prevent and redress sexual harassment in the
workplace, the court ensured that the offence was accorded the gravity which
was due.
69
The Vishaka Guidelines were taken as the basis on which The Sexual Harassment
of Women in the Workplace (Prevention, Prohibition and Redressal) Act 2013 was
drafted, taking care to strengthen areas and sections which needed strengthening
The act extends to the whole of India and seeks to achieve three major
objectives:
I. Protection of women against sexual harassment in workplaces

II. Prevention of conduct amounting to sexual harassment in workplaces
III. Establish mechanism for redressal of complaints pertaining to sexual harassment
70
The Sexual Harassment of Women in the Workplace (Prevention, Prohibition and
Redressal) Act 2013
Section 2: Definitions :
Sexual Harassment as: It includes any one or more of the

following unwelcome acts or behaviour (whether directly or by implication meaning):
• Physical Contact or advances
• A demand or request for sexual favors
• Making sexually colored remarks
• Showing pornography
• Any other unwelcome physical, verbal or non verbal conduct of sexual nature
Workplace” as “any place visited by the employee arising out of or during the course
of employment, including transportation provided by the employer for undertaking
such a journey.”
The Act defines the Unorganized Sector as: any enterprise owned by an individual or
a group of self-employed workers engaged in the production or sale of goods or
providing services of any kind; any enterprise which employs less than 10 workers.
As per this definition, a workplace covers both the organized and un-organized sectors
71
Section 3: Prevention of Sexual Harassment
The Sexual Harassment of Women in the Workplace (Prevention, Prohibition and Redressal)
Act 2013
Section 4: Constitution of Internal Complaints Committee- The act under Section

4 (2) (a) provides for the establishment of an Internal Complaints Committee in
all administrative units or offices for each workplace. The committee requires
four
members out of which three should be employees and one should be a non–
employee. Half of the members of the committee are supposed to be women and
it is also required for it to be headed bya senior level woman employee belonging
to that workplace.
Redressal) Act 2013
Section 10: Conciliation-

This Section provides that the Internal Committee or the Local Committee, on the
request
of the aggrieved woman, can take steps to settle the dispute between the victim and
the accused through the process of conciliation.
Section 11(3): Inquiry into Complaints and Power of Civil Court
The powers vested upon the Committee are similar to that of a Civil Court. Thus, the
committee becomes a quasi-judicial body. It is not compulsory for the constituting
members to have a legal background. The committee under Section 13(3) has also
been given the discretionary power to deduct sum from salary or wages in
accordance with prescribed service rules. The committee can also compel the
accused to pay compensation to the victim if found guilty according to the inquiry
report.
Redressal) Act 2013
Section 19: Duties of Employer- These include providing a safe working

environment in the workplace. The Employer is duty bound to organize
workshops and awareness programs at regular intervals to sensitize employees
with the provisions of the Act and orientation programs for the
members of the Internal Committee in the manner as may be prescribed. The
Employer should treat sexual harassment as misconduct under the service rules
and initiate action for such misconduct and should monitor the timely
submission of reports by the Internal Committee
Penalties for Non-Compliance- The Act provides a monetary fine of Rs 50,000 to

be paid by the Employer in the case of non-compliance. In case of continuation
of the offence, the punishment can be doubled followed by/along with the
revocation of the business license or cancellation of the registration
Corporate Governance
75
What is Corporate Governance ?
What is its significance ?
76
"Corporate Governance
"Corporate Governance is the system by which business

corporations are directed and controlled. The corporate governance
structure specifies the distribution of rights and responsibilities
among different participants in the corporation, such as, the board,
managers, shareholders and other stakeholders, and spells out the
rules and procedures for making decisions on corporate affairs.
By doing this, it also provides the structure through which the

company objectives are set, and the means of attaining those
objectives and monitoring performance", OECD April 1999.
OECD's definition is consistent with the one presented by Cadbury

[1992].
77
"Corporate governance is about promoting corporate fairness, transparency and
accountability" J. Wolfensohn, President of the Word bank, as quoted by an
article in Financial Times, June 21, 1999.
“Some commentators take too narrow a view, and say it (corporate governance) is
the fancy term for the way in which directors and auditors handle their
responsibilities towards shareholders. Others use the expression as if it were
synonymous with shareholder democracy. Corporate governance as a subject, as
an objective, or as a regime to be followed for the good of shareholders,
Employees , customers, bankers and indeed for the reputation and standing of
Company, our nation and its economy”
78
Corporate Governance as 'an internal system encompassing policies, processes and
people, which serves the needs of shareholders and other stakeholders, by directing
and controlling management activities with objectivity and integrity.
Sound Corporate Governance is reliant on external marketplace commitment and

legislation, plus a healthy board culture which safeguards policies and processes.
Key elements of good corporate governance principles include honesty, trust and
integrity, openness, performance orientation, responsibility and accountability, mutual
respect, and commitment to the organization.
In particular, senior executives should conduct themselves honestly and ethically,

especially concerning actual or apparent conflicts of interest, and disclosure in
financial reports.
79
• Corporate governance and responsibility can only grow from an
integrated system that links executive authority, financial accounting,
board accountability and stakeholder aspiration to transparency.
• Sound governance approaches are a crucial part of business

sustainability.
• The biggest failing is not the legal regulation but the executive
commitment to responsibility.
• Corporate responsibility and commitment must be captured by the

executive and blended into the business at every level.
• Those in authority need to have an ethos.
80
Constituents of Corporate Governance
• Board of Directors:
– Body of elected or appointed members who jointly oversee the activities of a
company or organization.
– Byelaws commonly specify number of members of the board, they are chosen
and when they are to meet.
• Shareholders:
– Any person company or other institution that owns at least one share in a
company
– As owners of companies, required to play an active role in exercising their rights.
– Can bring the company directors to task if they believe that the business is not
being run in the best interest of the company.
• Management: Personnel of the company who are members of its core management
team excluding Board of Directors
81
Role of Constituents
Constituents Role
Board of The pivotal role in any system of corporate governance is
Directors performed by the board of directors. The board is accountable to
the stakeholders, steers the company, sets its strategic aim and
financial goals and oversees their implementation. For achieving
the goals of the company it is necessary to put in place adequate
internal controls, and periodically report the activities and
progress of the company in a transparent manner to all the
stakeholders.
Shareholders The shareholders' role in corporate governance is to appoint the
directors and the auditors. It holds the board accountable for the
proper governance of the company.
Management The responsibility of the management is to undertake the
management of the company in terms of the direction provided
by the board, to put in place adequate control systems and to
ensure their operation. The management provides information to
the board on a timely basis and in a transparent manner to
enable the board to monitor the accountability of the
management.
Commonly accepted principles of Corporate Governance include:
•Rights and equitable treatment of shareholders: Organizations

should respect the rights of shareholders and help shareholders to
exercise those rights. They can help shareholders exercise their rights
by effectively communicating information that is understandable and
accessible and encouraging shareholders to participate in general
meetings.
•Interests of other stakeholders: Organizations should recognize that
they have legal and other obligations to all legitimate stakeholders.
•Role and responsibilities of the board: The board needs a range of
skills and understanding to be able to deal with various business issues
and have the ability to review and challenge management performance.
It needs to be of sufficient size and have an appropriate level of
commitment to fulfill its responsibilities and duties. There are issues
about the appropriate mix of executive and non-executive directors.
The key roles of chairperson and CEO should not be held by the same
person. 83
•Integrity and ethical behavior: Organizations should develop a
code of conduct for their directors and executives that promotes
ethical and responsible decision making. Because of this, many
organizations establish Compliance and Ethics Programs to minimize
the risk that the firm steps outside of ethical and legal boundaries.
•Disclosure and transparency: Organizations should clarify and

make publicly known the roles and responsibilities of board and
management to provide shareholders with a level of accountability.
They should also implement procedures to independently verify and
safeguard the integrity of the company's financial reporting.
Disclosure of all matters concerning the organization should
be timely and balanced to ensure that all investors have access to
clear, factual information.
84
Internal Corporate Governance Controls
•Monitoring by the board of directors: The board of directors,

with its legal authority to hire, fire and compensate top management,
safeguards invested capital. Regular board meetings allow potential
problems to be identified, discussed and avoided. Executive directors
possess superior knowledge of the decision-making process and
therefore evaluate top management on the basis of the quality of its
decisions that lead to financial performance outcomes. It
could be argued, therefore, that executive directors look beyond the
financial criteria.
•Remuneration: Performance-based remuneration is designed to relate
some proportion of salary to individual performance. It may be in the
form of cash or non-cash payments such as shares and share options,
superannuation or other benefits
Disclosure: Through Annual Report

Audit committees
85
External Corporate Governance controls encompass the controls
external stakeholders exercise over the organization.
Examples include:
•Government regulations
•Media pressure
•Takeovers
•Competition
86
Enron Fact File
• It grew from nowhere in 15 years to become a major player in the

energy industry and seventh largest corporation in US.
• Judged to be Fortune magazine’s most innovative company for 6

years.
• Consistently in top 100 best companies to work for.
• Regularly issued social and environmental reports outlining its

approach to environment, anti corruption , social programs & employees.
• Company’s vision was based on respect, integrity and excellence.
87
Enron filed for bankruptcy in 2001 due to unethical accounting practices/
scandal to hide billions of dollars in debt due to failed deals . CFO and other
Executives not only misled board of directors and audit committee about high
Risk accounting practices but pressurized them to ignore the issues but also asked which
even external auditors were a party.
Had all the right procedures in place but failed to provide control
If organizations are to be trusted a more responsible ethos must be

embedded in the organization.
It reflects not a failing of rules but a failure of corporate culture.
Improved transparency is a fundamental part of building stakeholder

confidence.
Financial reporting is only part of the equation and sustainable

reports such as FTSE 4 good and those as per GRI provide an
opportunity for organizations to openly declare their commitment and
approach to community and environment.
However reporting needs to be supported by action as is evident from

the case of Enron.
Openness and performance that promotes confidence and trust should

be the mantra for organizations seeking to enjoy a dialogue with the
wider community .
CG should be a robust system by which companies are directed and
controlled across four key areas as follows;
1. Financial Accounting ( developed post- Enron)

2. Transparency
3. Configuration and competence of executive board
4. Recognition of stakeholders in the business
The key drivers behind this need are brand protection, investor
Relationships & risk management .
90
Corporate Governance in India
• As India Inc goes global, economic crime is emerging as a bigger

threat than before.
• When Indian companies reach to other countries, exposed to

not just home-grown frauds, but also frauds prevalent in other
markets.
• Need for stronger regulatory review and exemplary

enforcement.
91
Corporate Governance in India ( Cont.)
• Focused primarily on role and composition of the board of directors.
• Notable recommendation of the Murthy Committee: Audit

Committee be comprised entirely of financially literate non-
executive members with at least one member having accounting or
related financial management expertise.
• When the Chairman of the Board is a non-executive director at

least one-third of the Board should be comprised of independent
directors else at least half of the Board should be comprised of
independent directors.
• Two thirds of the members of the audit committee shall be

independent directors.
• Every firm must "submit a quarterly corporate-governance

compliance report to the stock exchanges." 92
Board Composition In India
• Comprises executive, non executive/ independent, nominee directors,

associate directors and a couple of other directors.
• Executive Directors: Involved in the day to day management of the

company.
• Independent/Non-Executive Directors : Not involved in the day to day

management of the company and are appointed from outside the
company.
• Nominee Directors: Represent third parties in the Board like

government officials, foreign collaborators.
• Alternate Directors : Officiating Directors if any Director is absent for a

period of three months or more from the State in which the meetings of
the board are held.
93
Independent Directors
. According to the SEBI rules, an independent director is one who:
– Apart from receiving the director’s remuneration, does not have any
material pecuniary relationships or transactions with the company.
– Is not related to promoters or persons occupying management
positions.
– Has not been an executive of the company in the immediately
preceding three financial years.
– Is not a partner or an executive or was not partner or an executive
during the preceding three years.
– Is not a material supplier, service provider or customer or a lessor or
lessee of the company.
– Is not a substantial shareholder of the company
94
Corporate Governance and CSR
• Good corporate governance is the foundation of CSR
• CSR fundamentally concerned with transparency, accountability

and performance
• CSR decision-making structure to be an integral component of

the corporate governance system
• Corporate Governance & CSR are crucial elements to foster

sustainability of businesses and society.
95
Section 135 Companies Act 2013- CSR
Companies Act 2013 and CSR
• Mandated that companies having net worth of Rs.500 crore or more, or

turnover of Rs.1,000 crore or more, or net profit of Rs.5 crore or more
during a year
– To formulate a CSR policy
– To ensure that it spends at least 2 percent of its average net profits

during the immediately preceding three financial years on CSR
activities as may be specified by the company legislation.
• First time in the world that a country has mandated expenditure for
public good.
• Mandatory CSR will drive companies to be conscious of their social

responsibilities.
97
Corporate Social Responsibility (Section 135 Company’s Act 2013 )
1. Every company having net worth of rupees five hundred crore or more, or turnover
of rupees one thousand crore or more or a net profit of rupees five crore or more
during any financial year shall constitute a Corporate Social Responsibility
Committee of the Board consisting of three or more directors, out of which at
least one director shall be an independent director.
2. Every company including its holding or subsidiary, and a foreign company defined
under clause (42) of section 2 of the Act having its branch office or project office
in India, which fulfils the criteria specified in sub-section (1) of section 135 of the
Act shall comply with the provisions of section 135 of the Act and these rules.
98
Corporate Social Responsibility (Section 135 Company’s Act 2013 )
The Board's report under sub-section (3) of section 134 shall disclose the
composition of the Corporate Social Responsibility Committee.
(3) The Corporate Social Responsibility Committee shall,—
(a) formulate and recommend to the Board, a Corporate Social Responsibility

Policy which shall indicate the activities to be undertaken by the company as
specified in Schedule VII;
(b) recommend the amount of expenditure to be incurred on the activities
referred to in clause (a); and
(c) monitor the Corporate Social Responsibility Policy of the company from
time to time.
99
The CSR Policy of the company shall, inter-alia, include the following, namely:-
(a) a list of CSR projects or programs which a company plans to undertake

falling within the purview of the Schedule VII of the Act, specifying modalities
of execution of such project or programs and implementation schedules for the
same; and
(b) monitoring process of such projects or programs:
Provided that the CSR activities does not include the activities undertaken
in pursuance of normal course of business of a company.
Provided further that the Board of Directors shall ensure that activities included by
a company in its Corporate Social Responsibility Policy are related to the activities
included in Schedule VII of the Act.
(2) The CSR Policy of the company shall specify that the surplus arising out of the
CSR projects or programs or activities shall not form part of the business profit
of a company
Corporate Social Responsibility (Section 135 Company’s Act 2013 )- Cont.
4. The Board of every company referred to in sub-section (1) shall,—
(a) after taking into account the recommendations made by the Corporate Social
Responsibility Committee, approve the Corporate Social Responsibility Policy
for the company and disclose contents of such Policy in its report and also
place it on the company's website, if any, in such manner as may be
prescribed; and
(b) Ensure that the activities as are included in Corporate Social Responsibility
policy of the company are undertaken by the company.
(5) The Board of every company referred to in sub-section (1), shall ensure that the
company spends, in every financial year, at least two per cent of the average net
profits of the company made during the three immediately preceding financial
years, in pursuance of its Corporate Social Responsibility Policy:
Provided that the company shall give preference to the local area and areas
around it where it operates, for spending the amount earmarked for Corporate
Social Responsibility activities:
Provided further that if the company fails to spend such amount, the Board shall,
in its report made under clause (o) of sub-section (3) of section 134, specify the101
reasons for not spending the amount.
Schedule VII Company’s Act 2013
1. Eradicating hunger, poverty and malnutrition, promoting preventive health care

and sanitation and making available safe drinking water ;
2. Promoting education, including special education and employment enhancing
vocation skills especially among children, women, elderly, and the differently abled
and livelihood enhancement projects;
3. Promoting gender equality, empowering women, setting up homes and hostels for
women and orphans; setting up old age homes, day care centers and such other
facilities for senior citizens and measures for reducing inequalities faced by socially
and economically backward groups;
4. Ensuring environmental sustainability, ecological balance, protection of flora and
fauna, animal welfare, agroforestry, conservation of natural resources and maintaining
quality of soil, air and water;
5. Protection of national heritage, art and culture including restoration of buildings
and sites of historical importance and works of art; setting up public libraries;
promotion and development of traditional arts and handicrafts:
Schedule VII Company’s Act 2013
6. Measures for the benefit of armed forces veterans, war widows and their dependents;
7. Training to promote rural sports, nationally recognized sports, Paralympic sports and
Olympic sports;
8. Contribution to the Prime Minister's National Relief Fund or any other fund set up by the
Central Government for socio-economic development and relief and welfare of the
Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;
9. Contributions or funds provided to technology incubators located within academic

institutions which are approved by the Central Government
10. Rural development projects

The CSR activities shall be undertaken by the company, as per its stated CSR
Policy, as projects or programs or activities (either new or ongoing), excluding
activities undertaken in pursuance of its normal course of business.
The Board of a company may decide to undertake its CSR activities approved by
the CSR Committee, through a registered trust or a registered society or a
company established by the company or its holding or subsidiary or associate
company under section 8 of the Act or otherwise:
Provided that-
(i) if such trust, society or company is not established by the company or its
holding or subsidiary or associate company, it shall have an established track
record of three years in undertaking similar programs or projects;
(ii) the company has specified the project or programs to be undertaken through
these entities, the modalities of utilization of funds on such projects and
programs and the monitoring and reporting mechanism.
104
• A company may also collaborate with other companies for undertaking
projects or programs or CSR activities in such a manner that the CSR
Committees of respective companies are in a position to report separately
on such projects or programs in accordance with these rules.
• Subject to provisions of sub-section (5) of section 135 of the Act, the CSR
projects or programs or activities undertaken in India only shall amount to
CSR Expenditure.
• The CSR projects or programs or activities that benefit only the

employees of the company and their families shall not be considered as CSR
activities in accordance with section 135 of the Act.
105
CSR Reporting.-
(!) The Board's Report of a company covered under these rules pertaining to a
financial year commencing on or after the 1st day of April, 2014 shall include an
annual report on CSR containing particulars specified in Annexure.
(2) In case of a foreign company, the balance sheet filed under sub-clause (b) of sub-
section (1) of section 381 shall contain an Annexure regarding report on CSR.
9. Display of CSR activities on its website. -
The Board of Directors of the company shall, after taking into account the
recommendations of CSR Committee, approve the CSR Policy for the company and
disclose contents of such policy in its report and the same shall be displayed on
the company's website, if any, as per the particulars specified in the Annexure.
106
Maruti Suzuki India Limited ( MSIL) CSR Policy , Approach , Priorities ,
Deployment & Governance
107
MSIL CSR Policy
1. Maruti Suzuki India Limited (‘Company’) has developed its Corporate Social
Responsibility Policy (‘Policy’) in accordance with section 135 of the Companies Law
2013 and the rules made there under.
2. The Policy shall apply to all CSR programs of the Company
CSR Approach and Priorities
CSR activities will primarily be in the areas of village development, road safety and
skill development.
• To create a visible and lasting impact, the Company will focus on a few CSR
programs rather than spread resources thin over several projects.
• The Company will undertake relevant and effective social projects to have a
positive and meaningful impact on the lives of communities around it.
• In the area of road safety, while the Company has set up several driving schools
in collaboration with its dealers, their number is far from sufficient considering
the needs of society and the low level of consciousness about road safety in
India. The Company will scale up the number of driving training schools, and
take other initiatives to expand quality driving training in the country.
MSIL CSR Policy
• The Company will make efforts to involve State Governments in its road safety efforts for a
bigger impact. In line with this, the Company will identify a Tier 2 city for a comprehensive
road safety program in partnership with the State Government and municipality. The
program will cover all key areas of road safety, including effective enforcement of the law.
Efforts will be made to persuade State Governments to treat certificates given by Maruti
Driving Schools as sufficient and necessary for driving licenses.
• The Company will enhance employability of underprivileged youth by improving the

quality of skill training in Industrial Training Institutes (ITIs) and designing innovative
business models that create livelihood for them.
• The Company will encourage and recognize its employees for volunteering in the
community by serving and sharing their expertise and skill.
• The Company’s CSR projects will be implemented like any other business activity, in a time-
bound manner with clear objectives, plan, targets and robust monitoring and evaluation
parameters .
• Stakeholder engagement and shared value creation will be the cornerstones of the CSR
programs of the Company
Validity of CSR Policy

The Board may amend the CSR policy as may be required from time to time.
MSIL CSR Program Areas
Community Development :
Water and Sanitation: Depending on local needs and in consultation with the
community, the Company will undertake projects to improve availability of clean
drinking water, upgrade solid and liquid waste management facilities, create useful
rural assets, and support economically weaker households in construction of
domestic toilets to minimize open defecation
Education: In partnership with the local community and the government education
department, the Company will upgrade infrastructure of Government schools and
focus on improving the learning level and all-round development of students and
youth in the communities.
110
MSIL CSR Program Areas ( Cont. )
Health: The Company will assess the health care needs of the local community and
undertake projects to provide health care facilities.
Skill Development:
a) Up-gradation of Government Vocational and Technical Training Institutes- The

Company will improve quality of training by upgrading infrastructure, facilitate
overall development of students and staff, provide industry exposure
b) Skill enhancement in automobile trade: The Company will enhance skills of

youth studying automobile trade at Industrial Training Institutes (ITIs) and
Polytechnic (government and private) to enhance their employment opportunities
in automobile service workshops
111
MSIL CSR Program Areas and Budget
Road Safety:
a) Driving Training: The Company will scale up the number of Maruti Driving
Schools
b. Road Safety Education
CSR Budget
The Board of Company shall ensure that in each financial year, the Company spends
at least 2% of the average net profit made during the immediate three preceding
financial years.
The unutilized CSR budget from the 2% of the average net profit will be parked in
a CSR Fund (Corpus) created by the Company. This Fund would also include any
income arising there from and any surplus arising out of CSR activities.
In case of any surplus arising out of CSR projects the same shall not form part of
business profits of the Company.
The Company may collaborate or pool resources with other companies (its subsidiary
companies) to undertake CSR activities
112
MSIL CSR Implementation
The Company’s ongoing CSR projects will be aligned to the Policy. This Policy builds
on the learning and good practices of the CSR projects initiated by the Company.
The Company will enter into partnerships with the Government, business
partners and communities to create multiplier effect of its social projects
The Company has set up dedicated teams for implementation of CSR projects. The
mode of implementation will include a combination of direct implementation and
implementation through trust/foundation/society etc. set up
by the Company and partners such as NGOs, business partners, registered societies
etc. The Company will select its partners after appropriate due diligence.
The Company will use services of expert agencies, consultancy firms etc. wherever
required for carrying out base line surveys, guidance on project design and
implementation, impact assessment surveys etc.
113
MSIL CSR Governance Structure
114
MSIL CSR Approach , Deployment & Governance
Roles and Responsibilities
The Board:
The Board of Directors of the Company will be responsible for:
• Approval of the CSR Policy of the Company.

• Disclosing the content of the Policy in its report and place the Policy on the
Company’s website in such a manner as prescribed under Section 135 of the
Companies Act 2013 read with the CSR Rules.
• Ensuring that the social projects included in the Policy are undertaken by the
Company.
• Ensuring that the Company spends, in every financial year, at least 2% of the
average net profits of the Company made during the three immediately
preceding financial years in pursuance of the Policy.
• Ensuring that the Company gives preference to the local areas around its
operations for spending the amount earmarked for CSR projects.
• Ensuring that it specifies the reasons in its report for not spending the
earmarked amount in case the Company fails to spend such amount
115
CSR Committee :
1. Composition of the CSR Committee: The Composition of the CSR Committee
of the Board is as under:
S. No. Name Designation/Category CSR Committee
1 Mr. R. C. Bhargava Chairman Chairman
Managing Director &

2 Mr. K. Ayukawa Member
CEO
3 Mr. R. P. Singh Independent Director Member
Responsibility of the CSR Committee:

• Formulate and recommend the CSR Policy to the Board for approval. The
Committee shall indicate the projects to be undertaken by the Company as
specified in Schedule VII.
• Monitor the Policy from time to time and recommend changes to the Board.
• Recommend the amount of expenditure to be incurred on CSR projects.
• Institute a transparent monitoring mechanism for ensuring implementation of the
social projects undertaken by the Company. 116
.
CSR Coordinating Team
1. Composition of the CSR Coordinating Team: The Company’s existing CSR &
Sustainability Department under Corporate Planning Division will be the CSR
Coordinating Team.
2. Responsibility of the CSR Coordinating Team:

• Act as central coordinating point for the CSR implementing departments.
• Coordinate with the implementing departments for project designing in
compliance with the section 135 of the Companies Act and the CSR Rules.
• Plan annual budgets for CSR projects in coordination with the implementing
departments and make a proposal to the CSR Committee.
• Interface with various implementing departments within the Company to ensure
effective implementation of CSR projects.
• Report to the CSR Committee the progress on CSR projects and status of CSR
expenditure half yearly.
• Documentation and reporting of all CSR activities of the Company in pursuit of
the Companies Act and the CSR Rules 117
Monitoring and Reporting Framework

Project monitoring
The Company will institute a well-defined monitoring and evaluation mechanism to
ensure that each social project has:
1. Clear objectives developed out of the societal needs that are determined
through baselines studies and research.
2. Clear targets, time lines and measureable parameters wherever possible.
3. A progress monitoring and reporting framework that is aligned with the
requirements of the section 135 of the Companies Act and the CSR Rules.
CSR Progress Review and

Sr. No. Frequency of review
Monitoring Authority
1 Board of Directors Half Yearly

2 CSR Committee Half Yearly
3 Management Quarterly
4 Head Corporate Planning Monthly 118

Budget monitoring
1. The Company will establish an accounting system to ensure project wise
accounting of CSR spend.
Reporting framework
1. The Company will monitor progress on CSR projects and CSR spend and report to
the top management quarterly and the CSR Committee half yearly.
2. The Company will report CSR performance in its annual report as per the
structure and format prescribed in the notified CSR Rules.
3. The Company will share its CSR performance with its various stakeholders
through its annual Sustainability Report ( prepared as per GRI GR guidelines ),
media, conferences, brochures, short films etc.
119
Role of NGOs/Social Enterprises & Government
Who are NGO’s ?
What is their role ?
Why has their significance increased over the last two decades ?
121
NGOs ( Non- Governmental or Not- for-profit Organizations ) are groups of
individuals organized for the myriad of reasons that engage human imagination and
aspiration. They can be set up to advocate a particular cause, such as human rights,
or to carry out programs on the ground, such as disaster relief. They can have
memberships ranging from local to global. (Charnovitz, 1997: 186) .
The number, diversity, reach and influence of NGOs has grown rapidly in last two
decades due to economic liberalization, democratization and technological
transformation. They operate individually and collectively at all levels of society and
impact many aspects of people’s lives .
As per Carnegie Commission on the Prevention of Deadly conflict

NGOs at their best provide a vast array of human services unmatched by either the
government or market and they are self -designated advocates for action on
virtually all matters of public concern
122
Growing Role & Importance of NGOs
Their areas might include human rights, women’s rights , child rights ,
environmental, improving health, alleviating poverty , development works etc.
NGOs influence (and express) societal views of these issues, influence the policy-
making process and decision-making of business groups, and how these factors, in
turn, influence the ultimate approach to and resolution of the issue in question.
Campaigning NGOs ( promote a cause ) play an important role in changing social

expectations of business by influencing views and choices of consumers,
employees , investors , regulators, general public .
Increased global reach of NGOs through media and internet
123
The ‘ trust premium’ enjoyed by NGOs has been a key factor in shaping public
expectations of private sectors in the recent years especially in areas such as
human rights , health and environment . During the same period trust enjoyed by
government and businesses has decreased due to corruption , ethics scandals
etc.(Volkswagen , Lehman Brothers , Satyam, Bhopal Gas Tragedy etc. )
Activities of NGOs are beginning to influence corporate reputation , risk

management , costs , revenues and social license to operate . They are also
influencing the emergence of new business models and new corporate
accountability mechanisms,
Accordingly stakeholders are putting pressure on business to demonstrate good

performance in not only financial front but also Corporate governance , social ,
ethical and environmental performance
Tribals in Orissa’s Niyamgiri hills rejected the Vedanta’s bauxite mining project-
August 2013 124
Key activities at community, national, regional & Global level include
1. Advocacy, Analysis and Awareness raising – Acting as a voice for people both
on a representative and self appointed basis , researching and informing
public about issues , lobbying business leaders and policy makers
2. Brokerage- Acting as intermediary between different sectors and groups
3. Conflict Resolution – Acting as mediator and facilitator
4. Delivery of services – Operational delivery of development or social services
5. Capacity Building – Providing education, training and information
6. Monitoring and Evaluation – Serving as a watchdog and a third party/
independent auditor both invited and uninvited of government and
corporate performance , governance and transparency .
Greenpeace is a non-governmental environmental organization with offices in over
40 countries and with an international coordinating body in Amsterdam, the
Netherlands.
Founded by Canadian and US ex-pat environmental activists in 1971, Greenpeace

states its goal is to "ensure the ability of the Earth to nurture life in all its diversity“
and focuses its campaigning on worldwide issues such as climate change,
deforestation, overfishing, commercial whaling, genetic engineering, and anti-
nuclear issues.
It uses direct action, lobbying, research, and ecotage to achieve its goals. The global
organization does not accept funding from governments, corporations, or political
parties, relying on 2.9 million individual supporters and foundation grants
Greenpeace campaigned against Shell’s Brent Spar Oil platform among others
126
Brent Spar, or Brent E, was a North Sea oil storage and tanker loading buoy in the Brent oilfield,
operated by Shell UK. With the completion of a pipeline connection to the oil terminal at
Sullom Voe in Shetland, the storage facility had continued in use, but by 1991, was considered
to be of no further value. Brent Spar became an issue of public concern in 1995, when the
British government announced its support for Shell's application for its disposal in deep
Atlantic waters at North Feni Ridge (approximately 160 mi (250 km) from the west coast of
Scotland, at a depth of around 1.6 mi (2.5 km)).
Greenpeace organized a worldwide, high-profile media campaign against this plan occupying
Brent Spar for more than three weeks. In the face of public and political opposition in
northern Europe (including a widespread boycott of Shell service stations, some physical
attacks and an arson attack on a service station in Germany), Shell abandoned its plans to
dispose of Brent Spar at sea — whilst continuing to stand by its claim that this was the safest
option, both from an environmental and an industrial health and safety perspective.
Greenpeace's own reputation also suffered during the campaign, when it had to acknowledge
that its assessment of the oil remaining in Brent Spar’s storage tanks had been grossly
overestimated. Following Shell's decision to pursue only on-shore disposal options, as favoured
by Greenpeace and its supporters, Brent Spar was given temporary moorings in a Norwegian
fjord. In January 1998, Shell announced its decision to re-use much of the main structure in the
construction of new harbour facilities near Stavanger, Norway.
The ability of NGOs to place issues on the global agenda does much
to enhance their ability to participate in the later stages of decision making.
As pointed out by former Canadian Foreign Minister LloydAxworthy, “Clearly, one can
no longer relegate NGOs to simple advisory or advocacy roles . . . They are now
part of the way decisions have to be made” (cited in Simmons, 1998). The
question of what constitutes meaningful civil society participation in decision making,
however, is still being explored as NGOs and intergovernmental bodies
continue to develop working relationships.
Some International NGOs - NGO Human Rights Action Centre based in
USA , Amnesty International, Human Rights Watch , Children’s Defense
Funds
International NGOs have played a key role in the USA and Europe in many areas,
three specific policy areas reflecting the responsibilities of corporations to broader
society: the trade and regulation of genetically-modified organisms (GMOs), pricing
and distribution policies in the pharmaceutical industry, and international
environmental agreements (particularly the Kyoto Treaty).
The United Nations is the intergovernmental organization that has most openly
recognized and endorsed the need to collaborate with the non-governmental
sector.
129
NGOs and Extractive Sector ( Mining, Oil and Gas )
Key Issues in Extractive Sector ( Table 2 , page 14 )
1. Access to and Sustainability of natural resources

2. Social and Economic Development
3. Conflict and Security
4. Human Rights
5. Governance and Participation
131
Evolving relationship in view of following :
1. Large footprints – Large footprints in terms of physical, social , economic ,

Environmental and political impacts . NGOs campaigning or operational, work with
or against such corporates in view of large community and environmental
challenges. ( Impact on water a large use of water/ water pollution , air , land
pollution , land acquisition/ re-settlement issues , influx of workers so creates
pressure on facilities etc.)
2. Complex and problematic operating environments – Quite often operate in

complex and problematic physical conditions, high levels of Poverty , inequality etc.
3. Generation of large public revenues – Successful companies generate large

revenues . Appropriate use and allocation of these resources for sound development
purposes
4 NGO Ability to access and influence major publicly quoted companies such as
Exxon Mobil – Working with or against these companies and sometimes both is an
effective strategy to bring about change as compared to government itself as former
have reputation and stakeholder pressure to worry about .
132
Extractive Sector and NGOs
Key NGO Players exclusively focusing on mining :
1. Earthworks
2. Mining watch , Canada
3. Minerals and People , India
4. Mineral Policy Institute , Australia
5. ---
NGOs having broader agendas but have key programs of activities focusing
specifically on Extractive Sector :
1. Oxfam
2. Human Rights Watch
3. Amnesty International
4. Human Rights First
5. ---
133
NGOs and Extractive Sector ( Mining , Oil & Gas )
Key Types of Engagement ( Page 11 refer for table ) :
• Confrontation ( through lawsuits , labor strikes to slow down

operations or closes them etc. ) ,
• Communication
• Consultation - Community or Project level consultations
• Cooperation on a specific project in a in a specific community or to

address issues such as revenue transparency, climate change ,
corruption, biodiversity through policies / standard through
national/ regional / industry- wide level
Strategies for effective NGO – Business Cooperation
Will enable following :
1. Enhance each others learning and performance

2. Explore innovative and shared solutions for complex socio-economic
and environmental challenges
3. Strengthen public sector governance , capacity and institutions ( especially in
weak governance zones and developing economies where oil, gas and mineral
resources are found)
IPIECA publication lists many examples of strategic partnerships between companies,

governments and NGOs at national and global levels to address issues such as
Biodiversity, capacity building , climate change, community development , health ,
Human rights, , oil spill response , emergency preparedness and revenue
transparency
135
Confrontation will not disappear, nor should it happen. Both should hold each other
Accountable for performance, governance and transparency. There is a growing
opportunity to Consult and Cooperate in following areas :
1. Evaluating and Improving Project and Industry Performance

NGOs and companies can work in following key ways to evaluate, manage and improve
social , economic and environmental performance & development impacts of industry :
a. Joint participation in multi-stakeholder advisory and

consultation structures aimed at improving quality and diversity of advice,
dialogue and feedback between company and stakeholders. Example –
ICMM’s Resource Endowment Initiative. Page 29 ( aimed at improving the
Development impact of mining Industry)
b. Joint Project Evaluation , Measurement , tools, development and research

Projects aimed at analyzing impact of Extractive sector specific projects Example :
International Alert conflict sensitive business practices tool published in 2005 to
help assess and mitigate macro and project level risks associated with doing
business in unstable countries in the interest of long term stability of societies . Jointly
they can develop tool or NGOs can be part of Assurance process for such evaluation. 136
c. Multi-stakeholder accountability and governance structures aimed at
improving Industry wide or sector wide accountability - Here NGOs,
Governments and companies can establish and jointly govern formal
structures to improve industry wide or sector wide accountability
systems or processes . This can range from certification schemes to
rigorous codes and standards to more aspirational principles .
Example – Kimberley Process ( to certify diamonds not produced through

human rights abuse etc.) , International Cyanide Management Code( for
safe transport , disposal and use of cyanide in gold mines) , Voluntary
principles on security and human rights
2. Mobilizing joint resources to solve specific development or
operational challenges
• Aimed at supporting more equitable , pro-poor development.

• Can be done through initiatives such as access to economic
opportunity, decent health services, education, housing, sanitation,
water., energy etc.
• Building capacities of local NGOs and community leaders in environment
management and improve local preparedness for emergencies and natural disasters
Examples – Diamond Development Initiative ( initiated by collation of two NGOs and

two companies and supported by World Bank to address the challenges faced by
diamond mining artisanal communities who are very poor etc.) , The Energy and
Biodiversity Initiative ( Alliance between 4 energy companies and 5 NGOs to prepare
guidelines , processes and local projects to improve biodiversity conservation ),
Awareness and Preparedness for Emergencies at local level
138
3. Jointly strengthen public sector governance , capacity and Institutions
Aimed at improving transparency , tackle corruption and management of resource

revenues at the government level :
Examples – Integrity Pacts ( Tools piloted by Transparency International to prevent
corruption in public procurement ) , Resource Revenue Management Mechanism
( multi-stakeholder initiated accountability process for disbursing revenues ) ,
Extractive Industry Transparency Initiative ( to improve Transparency of revenues
generated by extractive industries )
139
Role of NGOs in Global Environmental Governance
NGOs involved in environmental governance are highly diverse,
including local, national, regional, and international groups with various
missions dedicated to environmental protection, sustainable
development, animal welfare, and other issues.
Due to their critical role in service delivery and implementation, civil

society organizations have long been recognized as “partners” of the UN
system, especially in environmental negotiations.
The diversity of civil society and its value to official intergovernmental

processes on the environment are acknowledged in Agenda 21,
the comprehensive sustainable development blueprint adopted at the
1992 Rio Earth Summit.
140
The UN Conference on Environment and Development was of particular significance
to NGOs. Agenda 21 declared the need for new forms of participation:
The United Nations system, including international finance and development

agencies, and all intergovernmental organizations and forums should, in
consultation with non-governmental organizations, take measures to . . . enhance
existing or, where they do not exist, establish mechanisms and procedures within
each agency to draw on the expertise and views of nongovernmental
organizations in policy and program design, iimplémentation and évaluation. (UN,
1994: Chapter 27)
The 1992 Earth Summit thus affirmed that the commitment and
genuine involvement of non-state actors are critical to reaching sustainable
development goals.
141
International community has begun to recognize that effective global action
requires meaningful stakeholder involvement in international
policymaking and implementation.
NGOs and other civil society groups are not only stakeholders in governance, but
also a driving force behind greater international cooperation through the active
mobilization of public support for international agreements.
The contributions from civil society participation need to be enhanced through a

strengthened, more formalized structure for engagement. UN programs seek
legitimacy for their policies through the involvement of civil society, yet formal
mechanisms for NGO participation within many parts of the UN system remain
limited.
Five major roles that civil society might play in global environmental governance:
(1) collecting, disseminating, and analyzing information;

(2) providing input to agenda-setting and policy development processes;
(3) performing operational functions;
(4)assessing environmental conditions and monitoring compliance with
environmental agreements; and
(5) advocating environmental justice.
Environmental NGOs are critical actors in compliance monitoring of international

agreements and in finding more accurate compliance data than governments are
willing to provide. Much room exists, however, for greater civil society involvement
in this important area of governance
Whereas governmental bodies and intergovernmental organizations often lack
analytical capacity or are hampered by bureaucratic constraints and other
obligations, NGOs can focus on a dynamic research agenda, and move quickly to
address new issues.
144
NGOs Accountability
NGOs accountability is a central issue for those stakeholders that fund and regulate
NGOs , beneficiary of NGOs activities or target of their advocacy campaigns or NGOs
themselves .
They are accountable when they are answerable for their performance to key
stakeholders. More than many other organizations ,INGOs have to deal with
multiple accountabilities : to donors who provide resources , to regulators responsible
for certification , to clients who use their services , to allies who cooperate in projects ,
to staff who invest their talent and time and to members who expect to be represented.
Approaches for analyzing NGO accountability cover the following :
1. Financial Integrity – source of funds, book keeping , auditing etc.

2. Organizational Reliability and Capacity- Policies, process & management systems
3. Performance effectiveness – level of benefits by beneficiaries , impacts
4. Voice/ advocacy credibility – Accuracy, Fairness / nature of public statements
5. Access by stakeholders to information
6. Organization’s responsiveness to complaints
7. Governance 145
Frameworks for Analysing NGOs Accountability
Four frameworks for evaluating, monitoring and improving accountability
1: Gap Accountability Project Framework – Used to compare the accountability of

Intergovernmental organizations, transnational corporations and International
non-governmental organizations. They developed an Accountability index used to
review the accountability based on various dimensions.
2. Keystone Capability Profiler- Focusses on developing new approaches that

incorporate process of stakeholder engagement and transparent public reporting
including accurate reporting of stakeholder views . Tool is used to evaluate their
performance with respect to accountability , strategy and operational integrity .
3. Risk Mapping Tools – This can be used by NGO Boards and NGO stakeholders to
asses their level of accountability, transparency, funding and standards.
4. Building Strategic Accountability System – This can be used by International
NGOs/large NGOs wanting to build strategic accountability systems defined as
organizational arrangement for recognizing, negotiating and responding to
obligations to various Stakeholders . Consists of a) assessing accountabilities,
b)negotiating expectations with stakeholders ,c) creating performance
management system and d) enabling sanctions such as rewards/recognition etc.
to promote performance
Mechanisms for achieving NGO Accountability
These can be used to actually hold NGOs to account for their Governance and
performance in different areas . Can be used by Stakeholders & NGOs themselves
1. Legal or Regulatory Mechanisms ( driven by government) – Includes a)

Establishment & registration procedures b) Benefits & tax treatment c) Disclosure
and public reporting requirements d) Capital, asset or membership requirements
2. Civic mechanisms driven by external stakeholders such as independent watchdog,

Rankings, media etc. Examples of independent watch dog/ranking focussing on
Performance, accountability and transparency include Foreign Aid Rating LLC, Charity
Watch , Guide Star etc,
3. Self regulatory or Voluntary mechanisms driven by NGOs themselves individually
or NGO networks such as voluntary certification or Accreditation , codes of conduct
etc.
Three initiatives for defining principles or standards for NGO Accountability are:
a. The code of conduct for the International Red Cross and Red Crescent
movement and NGOs in Disaster Relief – Standard for behaviour
b. InterAction’s Private Voluntary Organization Standard – Governance,

Finance , management practices etc.
c. International Non Governmental Organizations Accountability Charter –

Aimed at enhancing accountability, transparency, organizational
performance and effectiveness and stakeholder communication
Implementing , Monitoring, Measuring and Reporting CSR
- Codes / Principles / Standards/ Certifications
CSR Codes / Principles / Standards/ Certifications
• UN Global Compact
• Equator Principles
• National Voluntary Guidelines on Social, Environmental and
Economic Responsibilities of Business
• SA 8000
• ISO 26000
• Global Reporting Initiative
UN Global Compact
At the UN Global Compact, we aim to mobilize a global movement of sustainable

companies and stakeholders to create the world we want. That’s our vision.
To make this happen, the UN Global Compact supports companies to:
1.Do business responsibly by aligning their strategies and operations with Ten
Principles on human rights, labour, environment and anti-corruption; and
2.Take strategic actions to advance broader societal goals, such as the UN

Sustainable Development Goals, with an emphasis on collaboration and
innovation.
UN Global Compact 10 Principles
Corporate sustainability starts with a company’s value system and a principled

approach to doing business. This means operating in ways that, at a minimum,
meet fundamental responsibilities in the areas of human rights, labour,
environment and anti-corruption.
Responsible businesses enact the same values and principles wherever they have a
presence, and know that good practices in one area do not offset harm in another.
By incorporating the Global Compact principles into strategies, policies and
procedures, and establishing a culture of integrity, companies are not only
upholding their basic responsibilities to people and planet, but also setting the
stage for long-term success.
The UN Global Compact’s Ten Principles are derived from: the Universal
Declaration of Human Rights, the International Labour Organization’s Declaration
on Fundamental Principles and Rights at Work, the Rio Declaration on
Environment and Development, and the United Nations Convention Against
Corruption.
UN Global Compact 10 Principles
Human Rights
Principle 1: Businesses should support and respect the protection of internationally
proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Labour
Principle 3: Businesses should uphold the freedom of association and the effective
recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental
challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly
technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion
and bribery.
Equator Principles
Equator Principles Financial Institutions (EPFIs), have adopted the Equator

Principles in order to ensure that the Projects they finance and advise on are
developed in a manner that is socially responsible and reflects sound
environmental management practices
EPFIs work in partnership with their clients to identify, assess and manage
environmental and social risks and impacts in a structured way, on an ongoing
basis. Such collaboration promotes sustainable environmental and social
performance and can lead to improved financial, environmental and social
outcomes.
The Equator Principles is a risk management framework, adopted by financial

institutions, for determining, assessing and managing environmental and social
risk in projects.
It is primarily intended to provide a minimum standard for due diligence to support

responsible risk decision-making.
155
Equator Principles
The Equator Principles apply to the four financial products described below
when supporting a new Project:
1. Project Finance Advisory Services where total Project capital costs are
US$10 million or more.
2. Project Finance with total Project capital costs of US$10 million or more.
here lender looks primarily to the revenues generated by a single Project ,
both as a source of repayment and as security for the exposure}
3. Project-Related Corporate Loans ( Security exists in the form of corporate

or parent company guarantee) Export Finance in the form of Buyer Credit
where all four of the following criteria are met:
i. The majority of the loan is related to a single Project over which the client
has Effective Operational Control (either direct or indirect).
ii. The total aggregate loan amount is at least US$100 million.
iii. The EPFI’s individual commitment (before syndication or sell down) is at
least US$50 million.
iv. The loan tenor is at least two years.
4. Bridge Loans with a tenor of less than two years that are intended to be
refinanced by Project Finance or a Project-Related Corporate Loan that is 156
anticipated to meet the relevant criteria described above.
They do not provide Project Finance or Project-Related Corporate Loans to
Projects where the client will not, or is unable to, comply with the Equator
Principles. As Bridge Loans and Project Finance Advisory Services are provided
earlier in the Project timeline, we request the client explicitly communicates their
intention to comply with the Equator Principles.
Currently 91 Equator Principles Financial Institutions (EPFIs) in 37 countries have

officially adopted the EP, covering over 70 percent of international Project Finance
debt in emerging markets. . They recognize the importance of climate change,
biodiversity, and human rights, and believe negative impacts on project-affected
ecosystems, communities, and the climate should be avoided where possible. If
these impacts are unavoidable they should be minimized, mitigated, and/or
offset.
Equator Principles : Statement of Principles
Principle 1: Review and Categorization
When a Project is proposed for financing, the EPFI will, as part of
its internal environmental and social review and due diligence,
categorize it based on the magnitude of its potential
environmental and social risks and impacts.
Such screening is based on the environmental and social

categorization process of the International Finance Corporation
(IFC).
Using categorization, the EPFI’s environmental and social due

diligence is commensurate with the nature, scale and stage of
the Project, and with the level of environmental and social risks
and impacts.
158
Equator Principles : Statement of Principles ( Cont.)
Principle 2: Environmental and Social Assessment
For all Category A and Category B Projects, the EPFI will require the client to conduct
an Assessment process to address, to the EPFI’s satisfaction, the relevant
environmental and social risks and impacts of the proposed Project. The
Assessment Documentation should propose measures to minimize, mitigate, and
offset adverse impacts in a manner relevant and appropriate to the nature and scale
of the proposed Project
Principle 3: Applicable Environmental and Social Standards
The Assessment process should, in the first instance, address compliance with
relevant host country laws, regulations and permits that pertain to environmental
and social issues. The EPFI will require that the Assessment process evaluates
compliance with the applicable standards.
159
Principle 4: Environmental and Social Management System and Equator Principles

Action Plan
For all Category A and Category B Projects, the EPFI will require the client to
develop or maintain an Environmental and Social Management System (ESMS).
Further, an Environmental and Social Management Plan (ESMP) will be prepared by
the client to address issues raised in the Assessment process and incorporate
actions required to comply with the applicable standards. Where the applicable
standards are not met to the EPFI’s satisfaction, the client and the EPFI will agree an
Equator Principles Action Plan (AP). The Equator Principles AP is intended to
outline gaps and commitments to meet EPFI requirements in line with the
applicable standards.
160
Principle 5: Stakeholder Engagement
For all Category A and Category B Projects, the EPFI will require the client to
demonstrate effective Stakeholder Engagement as an ongoing process in a
structured and culturally appropriate manner with Affected Communities and,
where relevant, other Stakeholders .
For Projects with potentially significant adverse impacts on Affected Communities,

the client will conduct an Informed Consultation and Participation process. The
client will tailor its consultation process to: the risks and impacts of the Project; the
Project’s phase of development; the language preferences of the Affected
Communities; their decision-making processes; and the needs of disadvantaged and
vulnerable groups. This process should be free from external manipulation,
interference, coercion
161
Principle 6: Grievance Mechanism
For all Category A and, as appropriate, Category B Projects, the EPFI will require the
client, as part of the ESMS, to establish a grievance mechanism designed to receive
and facilitate resolution of concerns and grievances about the Project’s
environmental and social performance
Principle 7: Independent Review

Project Finance
For all Category A and, as appropriate, Category B Projects, an Independent
Environmental and Social Consultant, not directly associated with the client,
will carry out an Independent Review of the Assessment Documentation
including the Environmental and Social Management Plan (ESMPs,) the ESMS,
and the Stakeholder Engagement process documentation in order to assist the
EPFI's due diligence, and assess Equator Principles compliance. The
Independent Environmental and Social Consultant will also propose or opine on
a suitable Equator Principles AP capable of bringing the Project into
compliance with the Equator Principles, or indicate when compliance is not
possible.
Project-Related Corporate Loans
An Independent Review by an Independent Environmental and Social Consultant is
required for Projects with potential high risk impacts including, but not limited to,
any of the following :
• Adverse impacts on indigenous peoples

• Critical Habitat impacts
• significant cultural heritage impacts
• large-scale resettlement
Principle 8: Covenants
An important strength of the Equator Principles is the incorporation of covenants
linked to compliance.
For all Projects, the client will covenant in the financing documentation to comply
with all relevant host country environmental and social laws, regulations and
permits in all material respects.
163
Principle 8: Covenants( Cont.)
Where a client is not in compliance with its environmental and social covenants, the
EPFI will work with the client on remedial actions to bring the Project back into
compliance to the extent feasible. If the client fails to re-establish compliance
within an agreed grace period, the EPFI reserves the right to exercise remedies, as
considered appropriate.
Furthermore for all Category A and Category B Projects, the client will covenant the
financial documentation:
a) to comply with the ESMPs and Equator Principles AP (where applicable) during
the construction and operation of the Project in all material respects; and
b) to provide periodic reports in a format agreed with the EPFI (with the frequency
of these reports proportionate to the severity of impacts, or as required by law, but
not less than annually), prepared by in-house staff or third party experts, that i)
document compliance with the ESMPs and Equator Principles AP (where applicable),
and ii) provide representation of compliance with relevant local, state and host
country environmental and social laws, regulations and permits; and
c) to decommission the facilities, where applicable and appropriate, in accordance

with an agreed decommissioning plan.
Principle 9: Independent Monitoring and Reporting
Project Finance
To assess Project compliance with the Equator Principles and ensure ongoing
monitoring and reporting after Financial Close and over the life of the loan, the
EPFI will, for all Category A and, as appropriate, Category B Projects, require the
appointment of an Independent Environmental and Social Consultant, or require
that the client retain qualified and experienced external experts to verify its
monitoring information which would be shared with the EPFI.
Project-Related Corporate Loans

For Projects where an Independent Review is required under Principle 7, the EPFI
will require the appointment of an Independent Environmental and Social
Consultant after Financial Close, or require that the client retain qualified and
experienced external experts to verify its monitoring information which would
be shared with the EPFI.
165
Principle 10: Reporting and Transparency
Client Reporting Requirements
For all Category A and, as appropriate, Category B Projects:

• The client will ensure that, at a minimum, a summary of the ESIA is accessible and
available online except in cases where the client does not have internet access.
• The client will publicly report GHG emission levels (combined Scope 1 and Scope 2
Emissions) during the operational phase for Projects emitting over 100,000 tons of
CO 2 equivalent annually
EPFI Reporting Requirements : The EPFI will report publicly, at least annually, on
transactions that have reached Financial Close and on its Equator Principles
implementation processes and experience, taking into account appropriate
confidentiality requirements.
National Voluntary Guidelines on Social, Environmental and
Economic Responsibilities of Business ( MCA, GOI)
The Guidelines are designed to be used by all businesses irrespective of

size, sector or location and therefore touch on the fundamental
aspects – the 'spirit' - of an enterprise.
For business leaders and managers entrusted with the task of deploying the principles
of Responsible Business, it is worthwhile to understand that business boundaries today
extend well beyond the traditional walls of a factory or an operating plant and all the
way across the value chain.
Businesses are therefore encouraged to ensure that not only do they follow the
Guidelines for areas directly within their immediate control or within their sphere of
influence, but that they encourage and support their vendors, distributors, partners
and other collaborators across their value chains to follow the Guidelines as well.
The Guidelines have been articulated in the form of nine (9) Principles with the Core
Elements to actualize each of the principles.
167
National Voluntary Guidelines on Social, Environmental and
Economic Responsibilities of Business ( MCA, GOI)
Principle 1: Businesses should conduct and govern themselves
with Ethics, Transparency and Accountability
The principle recognizes that ethical conduct in all its functions and processes is the
cornerstone of responsible business.
Core Elements
1. Businesses should develop governance structures, procedures and practices
that ensure ethical conduct at all levels; and promote the adoption of this principle
across its value chain
2. Businesses should communicate transparently and assure access to information
about their decisions that impact relevant stakeholders
3. Businesses should not engage in practices that are abusive, corrupt, or anti-
competition
4. Businesses should truthfully discharge their responsibility on financial and other
mandatory disclosures.
5. Businesses should report on the status of their adoption of these Guidelines as
suggested in the reporting framework in this document.
6. Businesses should avoid complicity with the actions of any third party
168
Principle 2: Businesses should provide goods and services that are
safe and contribute to sustainability throughout their life cycle
The principle emphasizes that in order to function effectively and profitably ,
businesses should work to improve the quality of life of people. The principle
recognizes that all stages of the product life cycle, right from design
to final disposal of the goods and services after use, have an impact on society and
the environment. Responsible businesses, therefore, should engineer value in their
goods and services by keeping in mind these impacts.
Principle 3: Businesses should promote the wellbeing of all employees

The principle encompasses all policies and practices relating to the dignity and
wellbeing of employees engaged within a business or in its value chain
Principle 4: Businesses should respect the interests of, and be responsive

towards all stakeholders, especially those who are disadvantaged,
vulnerable and marginalised
The principle recognizes that businesses have a responsibility to think and
act beyond the interests of its shareholders to include all their stakeholders. The
Principle, while appreciating that all stakeholders are not equally influential or
aware, encourages businesses to proactively engage with and respond to those that
are disadvantaged, vulnerable and marginalized. 169
Principle 5: Businesses should respect and promote human rights
The principle recognizes that human rights are the codification and
agreement of what it means to treat others with dignity and respect.
The principle imbibes its spirit from the Constitution of India, which through its
provisions of Fundamental Rights and Directive Principles of State
Policy, enshrines the achievement of human rights for all its citizens. In addition,
the principle is in consonance with the Universal Declaration of Human Rights, in
the formation of which, India played an active role.
Principle 6: Business should respect, protect, and make efforts

to restore the environment
The principle recognizes that environmental responsibility is a
prerequisite for sustainable economic growth and for the well being of
Society. The principle encourages businesses to understand and be accountable for
direct and indirect environmental impacts of their operations, products and
services and to strive to make them more environment friendly.
170
Principle 7: Businesses, when engaged in influencing public and
regulatory policy, should do so in a responsible manner
The principle recognizes that businesses operate within the specified legislative and
policy frameworks prescribed by the Government, which guide their growth and also
provide for certain desirable restrictions and boundaries.
The principle acknowledges that in a democratic set-up, such legal frameworks are
developed in a collaborative manner with participation of all the stakeholders,
including businesses.
The principle emphasizes that policy advocacy must expand public good rather than
diminish it or make it available to a select few
Principle 8: Businesses should support inclusive growth and

equitable development
The principle recognizes the value of the energy and enterprise of businesses and
encourages them to innovate and contribute to the overall development of the
country, especially to that of the disadvantaged, vulnerable and marginalised
sections of society.The principle reiterates that business prosperity and inclusive
growth and equitable development are interdependent.
171
Principle 9: Businesses should engage with and provide value to their customers and
consumers in a responsible manner
This principle is based on the fact that the basic aim of a business entity is to
provide goods and services to its customers in a manner that creates value for
both.
The principle acknowledges that no business entity can exist or survive in the
absence of its customers.
The principle recognizes that customers have the freedom of choice in the selection
and usage of goods and services, and that the enterprises will strive to make
available goods that are safe, competitively priced, easy to use and safe to dispose
off, for the benefit of their customers
The principle also recognizes that businesses have an obligation to mitigating the
long term adverse impacts that excessive consumption may have on the overall
well-being of individuals, society and our
172
Social Accountability 8000
This is an auditable standard for a third-party verification system, setting out

the voluntary requirements to be met by employers in the workplace,
including workers’ rights, workplace conditions, and management
systems.
The normative elements of this standard are based on national law,

international human rights norms and the conventions of the ILO.
SA8000 standard can be used along with the SA8000 Guidance Document to assess the
compliance of a workplace with these standards.
173
The intent of SA8000 is to provide a standard based on international human
rights norms and national labour laws that will protect and empower all
personnel within a company’s scope of control and influence, who
produce products or provide services for that company, including
personnel employed by the company itself, as well as by its
suppliers/subcontractors, sub-suppliers, and home
workers.
SA8000 is verifiable through an evidenced-based process. Its requirements

apply universally, regardless of a company’s size, geographic location, or
industry sector.
The standard covers requirements with respect to child labor, forced labor, Health
& Safety at workplace , Disciplinary practices, Discrimination , Working hours,
Freedom of association , Right to collective bargaining and management systems
including control of suppliers, sub-suppliers and subcontractors & Outside
Communication and stakeholder engagement.
Social Accountability 8000 Contents
1. Purpose and Scope
2. Normative Elements and their Interpretation
3. Definitions
4. Social Accountability Requirements

ISO 26000
ISO 26000 provides guidance on how businesses and organizations can operate in a
socially responsible way. This means acting in an ethical and transparent way that
contributes to the health and welfare of society.
The standard was launched in 2010 following five years of negotiations between
many different stakeholders across the world. Representatives from government,
NGOs, industry, consumer groups and labour organizations around the world were
involved in its development, which means it represents an international consensus.
ISO 26000 is the international standard developed to help organizations effectively

assess and address those social responsibilities that are relevant and significant to
their mission and vision, operations and processes, customers, employees ,
communities and other stakeholders and environmental impact.
176
ISO 26000 standard provides guidance on :
• The seven key underlying principles of social accountability : Accountability,

Transparency, Ethical Behaviour, Respect for stakeholder interests , Respect for rule of law,
Respect for international norms of behaviour and Respect for human rights
• Recognizing social responsibility and engaging stakeholders
• The seven core subjects and issues pertaining to social responsibility : Organizational
Governance , Human Rights, Labour Practices, The environment, Fair operating practices ,
Consumer issues and Community involvement and Development
• Ways to integrate socially responsible behaviour into the organization
• In addition to providing definitions and information to help organizations understand and

address social responsibility, the standard emphasizes the importance of results and
Improvements in performance on social responsibility .
How does ISO 26000 define Social
Responsibility?
Social Responsibility (SR) is the responsibility of an organization for the
impacts of its decisions and activities on society and the environment
through transparent and ethical behaviour that:
• Contributes to sustainable development, including the health and welfare
of society
• Takes into account the expectations of stakeholders
• Is in compliance with applicable law and consistent with international
norms of behavior, and
• Is integrated throughout the organization and practised in its
relationships.
Examples of linkages between International
norms and ISO 26000
UN Global
Compact; UN
Declaration of
Human Rights
GRI Global ILO

International
Reporting Labour Org.
ISO
26000
UN
Working UN
Group on Sustainable
Business & Developme
Human nt Goals
Rights
OECD
Guidelines
ISO 26000 can be used by any organization,
for example:
• large multi-national corporations
• small and medium size enterprises
• the public sector (hospitals, schools or others)
• foundations, charities and NGOs
• extractive industries, such as mining and fossil fuel
companies
• service and financial industries (banks, IT, insurance)
THE CORE CONTENT
• Seven principles
• Seven core subjects and their related issues
• Stakeholder engagement
The 7 Principles
1. Accountability
2. Transparency
3. Ethical behaviour
4. Respect for stakeholder interests
5. Respect for the rule of law
6. Respect for international norms of behavior
7. Respect for human rights
Accountability and Transparency
• Accountability is the: “state of being answerable

for decisions and activities to the organization’s
governing bodies, legal authorities and, more
broadly, its stakeholders” (those who are
affected by its actions)
• Transparency is “openness about decisions and

activities that affect society, the economy and
the environment, and willingness to
communicate these in a clear, accurate, timely,
honest and complete manner”
• Accountability and Transparency involve
taking responsibility for decisions and policies
• Accountability and transparency involve the

top decision-makers, as well as everyone
throughout a chain of command
• Leaders need to know and acknowledge who

has made what specific decisions
Principle of Ethical Behavior
• Ethical behavior involves deciding what is the right
course of action, day to day
• Ethical behavior is defined as “behavior that is in

accordance with accepted principles of right or
good conduct in the context of a particular
situation…”
• Ask yourself: would you be comfortable if your

actions were to become public knowledge?
Principle of Respect for stakeholder interests
• This involves identifying groups of stakeholders - those who are

affected by your decisions and actions - and responding to their
concerns.
• It does not mean letting them make your decisions.
Note that, by definition, “social responsibility” is not decided in a vacuum;
it always involves reference to the guiding principles, and awareness of
impacts on others
Principle of Respect for the rule of law
• “In the context of social responsibility,

respect for the rule of law means that an
organization complies with all applicable
laws and regulations….even if they are not
adequately enforced.”
Principle of Respect for international
norms of behaviour
• “In situations where the law or its implementation does not provide
for adequate environmental or social safeguards, an organization
should strive to respect, as a minimum, international norms of
behaviour.”
• International norms of behavior are “…derived from customary

international law, generally accepted principles of international
law, or intergovernmental agreements that are universally or
nearly universally recognized.”
• These can be found in authoritative international instruments from

organizations such as the United Nations, International Labour
Organization (ILO).
Principle of Respect for human rights
• ISO 26000 urges its users to identify the

vulnerable populations among its stakeholders,
and to work to ensure their fair treatment
• “..In situations where human rights are not

protected, take steps to respect human rights
and avoid taking advantage of these
situations…”
Source: ISO 26000:2010 Clause 4.8

In summary, the 7 Principles:
• Establish the underlying framework for socially responsible

decision-making
• Emphasize that Social Responsibility is a process that
develops and evolves with practice
The 7 Core Subjects
Community
Involvement Human
and Rights
Development
Organizational
Consumer
Issues Labour
Organization Practices
Governance
The
Fair Operating Environment
Practices
The 7 core subjects
• Each of the 7 core
subjects is relevant to See Appendix for the
every organization and
should be considered. complete list of issues
for each Core Subject
• Users then review
specific issues (37 in all)
listed under each core
subject to identify those
issues that are relevant
and significant.
• Not all of the 37 specific
issues will be relevant to
each user.
Core subject: Human rights
• ISO 26000 encourages users to identify and respond to
members of vulnerable groups within their sphere of influence
• Users should avoid complicity; that is, avoid assisting those
abusing others, and avoid benefiting directly from abuses
committed by someone else
Some specific issues for SR improvement:

• develop mechanisms for “due diligence”: ways to identify,
address and prevent actual or potential human rights damage
resulting from your activities
• examine the treatment of vulnerable groups in your context,
such as: indigenous peoples, girls and women, those
historically discriminated against on the basis of race, ethnicity
or religion, people with disabilities, the elderly, migrants, etc.
• provide remedy and grievance procedures
Core subject: Organizational governance
• Leaders should practice and promote ethical behavior,

accountability and transparency
• ISO 26000 suggests tools for integrating SR into core
organizational decisions

• Develop incentives for performance on social responsibility
• Adjust organizational structure to include third-party review of
sensitive areas such as financial management, etc.
• Create ways to track decisions and their implementation, to
ensure accountability and follow-through
• Implement processes for meaningful (two-way) communication
with stakeholders
Core subject: Labor practices
• Everyone should be able to earn a living wage through freely chosen
work (not forced labor or slavery)
• All workers should experience just and favorable conditions at work
• Responsibility goes beyond workplaces that an organization owns or
directly controls

• Eliminate child labour and forced labour
• Comply with laws and regulations on the rights of unions and collective
bargaining, and social protection (medical coverage, disability leave, etc.
• Eliminate discrimination in hiring and dismissals
• Understand and control the health and safety risk involved in activities;
provide safety equipment and training
• Consider the impact on workers’ family lives when making scheduling
decisions
• Avoid contracting with suppliers or sub-contractors who use unfair or
abusive labor practices, including child labor
Core subject: Environment
• Prevent pollution; reduce emissions of pollutants into the
air, water and soil as much as possible
• Practice green procurement – evaluate suppliers of goods
and services on their environmental impacts
• Use sustainable, renewable resources whenever possible
• Conserve water in operations
• Practice life-cycle approach(including disposal) – aim to
reduce waste, re-use products or components, and re-cycle
materials
Core subject: Fair operating practices
• Practice honesty – don’t ask for or accept bribes; don’t
attempt to break laws through use of political influence
• Respect property rights; pay fair compensation for
property you acquire or use
• Treat suppliers and customers/consumers fairly,
including prompt payment of bills and prompt attention to
problems
• Examine your value chain/supply chain, and be sure you
are paying enough to enable your suppliers to fulfill their
own social responsibilities
Core subject: Consumer issues
• Protect consumers’ health and safety; design and test
products to ensure this
• Reduce waste by minimizing packing material and, if
appropriate, offer recycling and disposal services
• Eliminate or minimize negative health and environmental
impacts of products and services, such as noise or waste
• Pay particular attention to the information needs of
vulnerable individuals (for example, those with limited
vision or hearing, or poor reading ability)
Core subject: Community
involvement and development
Actions that benefit communities - such as job creation, skill
development, and provision of health, welfare and other
services - should be integrated into the core “business model”
• Consult directly with community members before designing
programs
• Focus on increasing local procurement and hiring
• When investing in a community, consider the economic, social,
and environmental impacts of your investment
• Respect the traditional uses of natural resources by local
populations, especially indigenous peoples
• Fulfill tax and other legal responsibilities as described in law,
even when punishments are not likely
• Consider “social investment”: programs and infrastructure
which will improve quality of life, and which will increase the
capacity of the community to develop sustainably
Stakeholder engagement and
communication: a crucial component
• “Stakeholder identification and engagement are central to

addressing an organization’s social responsibility.” (ISO
26000:2010 Clause 5.3)
• Communication establishes channels for exchanging
knowledge, suggestions, complaints and ideas for solutions.
• Identifying stakeholders and developing channels of
communication with them is one of the most rewarding and
most challenging parts of Social Responsibility.
• Start to communicate respect and willingness to engage before a
crisis emerges.
• The goal is to build trust and credibility for the long term, not
to find “quick fixes” for problems.
4. HOW TO USE ISO 26000
Setting the direction from the top; building SR into
governance and procedures
Determining relevance and significance; establishing priorities:
matrix, mapping, gap analysis
Assessing your responsibilities in your sphere of influence
Performing “due diligence”
Reporting and other communications with stakeholders
GRI G4 Guidelines for Reporting on Sustainability
203
Importance of Reporting
• To build trust
• To demonstrate clear purpose, vision and mission
• To enhance business reputation
• To provide information to interested stakeholders
• To demonstrate commitment to operate business in a responsible way
204
GRI G4 Guidelines
The GRI Sustainability Reporting Guidelines (the Guidelines) offer Reporting
Principles, Standard Disclosures and an Implementation Manual for the
preparation of sustainability reports by organizations, regardless of their
size, sector or location.
The Guidelines also offer an international reference for all those

interested in the disclosure of governance approach and of the
environmental, social and economical performance and impacts of
organizations. The Guidelines are useful in the preparation of any type of
document which requires such disclosure.
The Guidelines are developed through a global multi-stakeholder

process involving representatives from business, labor, civil society,
and financial markets, as well as auditors and experts in various fields;
and in close dialogue with regulators and governmental agencies in several
countries. The Guidelines are developed in alignment with internationally
recognized reporting related documents, which are referenced throughout
the Guidelines.
205
According to the GRI, a leading global non-profit organization,
sustainability includes an organization’s economic, social, and
environmental impacts and its initiative to better inform the
stakeholders on sustainability matters. Therefore, sustainability is
considered more encompassing than traditional approaches to CSR
because it not only suggests ways in which companies can make their
operations more responsible, but also provides a specific format for
communicating this information to stakeholders
Several large organizations in India have started using this standard to

engage and communicate with the stakeholders
The Guidelines offer two options to an organization in order to prepare its
sustainability report ‘in accordance’ with the Guidelines: the Core option and the
Comprehensive option.
Each option can be applied by all organizations, regardless of their size, sector or
location. The focus of both options is on the process of identifying material Aspects.
Material Aspects are those that reflect the organization’s significant economic,
environmental and social impacts; or substantively influence the assessments and
decisions of stakeholders.
The Core option contains the essential elements of a sustainability report. The Core
option provides the background against which an organization communicates the
impacts of its economic, environmental and social and governance performance.
The Comprehensive option builds on the Core option by requiring additional

Standard Disclosures of the organization’s strategy and analysis, governance, and
ethics and integrity. In addition, the organization is required to communicate its
performance more extensively by reporting all Indicators related to identified
material Aspects. An organization, whether it is a new or experienced reporter, has to
choose the option that best meets its reporting needs and, ultimately, enables it to
meet its stakeholders’ information needs. 207
Performance Indicators
208
GRI G 4 Indicators
Economic – 9
Environmental – 34
Social – 48 ( Labor Practices 16, Human Rights 12, Society 11 ,

Product Responsibility 9)
209
Economic Performance Indicators
210
Economic indicators
The economic dimension of sustainability concerns the

organization’s impacts on the economic conditions of its
stakeholders, and on economic systems at local, national,
and global levels. The Economic Category illustrates the flow of
capital among different stakeholders, and the main economic
impacts of the organization throughout society.
Indicators include revenue generated and distributed, wages

as compared to Minimum, hiring from local community ,
proportion of spending on local suppliers , significant
infrastructure investments etc.
211
Category – Economic ( G4 EC1 – EC 9)
Sub- categories
• Economic Performance
• Market Presence
• Indirect Economic Impacts
• Procurement Practices
212
Environmental Performance Indicators
213
Environmental Indicators ( G4 EN 1- EN 34 )
The environmental dimension of sustainability concerns the organization’s

impact on living and non-living natural systems, including land, air, water and
ecosystems.
214
Environmental indicators concern a company’s impact on:
• Living and non-living natural systems, including eco-systems, land, air
and water.
• Impact of products and services on environment
• Energy, material and water use by company
• Extent of greenhouse gas and other emissions
• Extent of effluents and waste generation
• Impacts on biodiversity
• Use of hazardous materials
• Measures to ensure recycling and prevent pollution
• Measures for waste reduction
• Other environmental programs
• Environmental expenditures
• Fines and penalties for non-compliance.
215
Category – Environmental
Sub- categories
• Materials
• Energy
• Water
• Biodiversity
• Emissions
• Effluents and Waste
• Products and Services
• Compliance
• Transport
• Overall
• Supplier Environmental Assessment
• Environmental Grievance Mechanisms
216
Social Performance Indicators
217
Social indicators concern an organization’s impact on the social
systems within which it operates.
GRI social indicators are grouped into three clusters, labour practices (e.g.
diversity, employee health and safety), human rights (e.g. child labour,
compliance issues), and broader social issues affecting consumers,
communities, and other stakeholders (e.g. bribery and corruption,
community relations). Because many social issues are not easily
quantifiable, GRI requests qualitative information where appropriate.
218
Category-Social
Sub- Categories
• Labor Practices and Decent Work

• Human Rights : Aligned with OECD and UNGC guidelines / principles
• Society
• Product Responsibility
219
Category – Social
Labour Practices and Decent Work ( G4 LA1 – LA 16)
• Employment
• Labour/Management Relations
• Occupational Health and Safety
• Training and Education
• Diversity and Equal Opportunity
• Equal Remuneration for Women and Men
• Supplier Assessment for Labor Practices
• Labour Practices Grievance Mechanisms
220
Category – Social
Subcategory - Human Rights ( G4 HR 1 – HR 12 )
Investment
Non-discrimination
Freedom of Association and Collective Bargaining
Child Labour
Forced or Compulsory Labour
Security Practices
Indigenous Rights
Assessment
Supplier Human Rights Assessment
Human Rights Grievance Mechanisms
221
Category – Social
Society ( G4 SO 1 – SO 11 )
Local Communities
Anti-corruption
Public Policy
Anti-competitive Behaviour
Compliance
Supplier Assessment for Impacts on Society
Grievance Mechanisms for Impacts on Society
222
Category – Social
Product Responsibility ( G4 PR1 – G4 PR 9)
• Customer Health and Safety

• Product and Service Labelling
• Marketing Communications
• Customer Privacy
• Compliance
223
GRI G 4 Indicators Performance Indicators
Economic Performance Social Performance Environmental

Indicators Indicators Performance Indicators
 Economic  Materials  Compliance

Performance  Energy  Transport
 Water  Overall
 Market Presence
 Biodiversity  Supplier Envtal
 Indirect Economic  Emissions Assessment
Impacts  Effluents and  Environmental
 Procurement Practices Waste Grievance
 Products and Mechanisms
Services
 Labor Practices and Decent  Society

Work Performance  Human Rights • Local Communities  Product Responsibility
Indicators • Investment • Anti-Corruption • Customer Health and Safety
• Employment • Non-discrimination • Product and Service Labeling
• Public Policy
• Labour/Mgt Relations • Freedom of Association and • Marketing Communications
• Anti-Competitive
• Occupational Health & Collective Bargaining • Customer Privacy
safety • Child Labor Behavior
• Compliance • Compliance
• Training & Education • Forced or Compulsory Labor
• Diversity & Equal • Security Practices • Supplier
opportunity • Indigenous Rights Assessment for
• Equal Remuneration for • Assessment Impacts on Society
Women and Men • Supplier Human Rights • Grievance
• Supplier Assessment for Assessment Mechanisms for
Labor Practices • Human Rights Grievance Impacts on Society
• Labor Practices Grievance Mechanisms
Mechanisms

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Human Rights in Business

What do we understand by Human Rights ?

Universal (applicable everywhere) and

- was adopted by the United Nations General Assembly in 1948

- Is an international document that states basic rights and fundamental

Adopted in 1998, the Declaration commits Member States to respect and

These categories are: freedom of association and the effective recognition of

1. Freedom of Association and Protection of the Right to Organize Convention, 1948

The concluding articles, articles 28 to 30, recognize that everyone is entitled to a

Child labor in Sivakasi Fire works Industry ,

Nestle - Child labor in cocoa farms

Slavery in supply chain of Thailand food Industry

In a world of complex supply chains, migrant workers, sub-suppliers and a

1. UN Norms on responsibility of Transnational Corporations and other

2 . UN Guiding Principles on Business and Human Rights

Second, responsibility of companies to ensure that they do not benefit directly or

Fifth. the companies• responsibility to assess their human lights impact.

Sixth, the companies responsibility to avoid complicity in human rights abuses.

Implementing United Nations ‘Protect, Respect and Remedy’ Framework"

• The State Duty to Protect Human Rights

• The Corporate Responsibility to Respect Human Rights

The responsibility to respect human rights is a global standard of expected

The responsibility of business enterprises to respect human rights is distinct from

(a) Avoid causing or contributing to adverse human rights impacts

Severity of impacts will be judged by their scale, scope and irremediable

(a) A policy commitment to meet their responsibility to respect human rights;

They cannot do so unless they have certain policies and processes in

Principles 16 to 24 elaborate further on these

Human rights due diligence:

Human rights risks are understood to be the business enterprise’s potential

Because human rights situations are dynamic, assessments of human

(b) Appropriate action will vary according to:

(a) Be based on appropriate qualitative and quantitative indicators;

24. Where it is necessary to prioritize actions to address actual and

•In an address to the World Economic Forum on 31 January 1999,

• Today, thousands of companies from all regions of the world,

•The Global Compact is a purely voluntary initiative with two

-Mainstream the ten principles in business activities around the world

Freedom of association implies a respect for the right of employees and

Collective bargaining is a voluntary process used to determine terms and

•Ensure union-neutral policies and procedures in such areas as

•Provide facilities to help worker representatives carry out their

•These facilities include the ability to collect union dues on company

Forced or compulsory labor is any work or service that is extracted

ILO conventions recommend a minimum age for admission to

Priority is given to eliminating, for all persons under the age of

The definition of discrimination in employment and occupation is

The Rio Declaration firmly established the link between environmental

"...in order to achieve sustainable development, environmental protection

"In order to protect the environment, the precautionary approach

•the damage occurring to many natural ecosystems,

•our ability to sustain long term economic and social development.

"[the] responsible and ethical management of products and processes

Encouraging the development and diffusion of environmentally friendly

"...protect the environment, are less polluting, use all resources in a

The adoption of the tenth principle commits UN Global Compact

As a diversified, global company with growth in emerging markets, and as a provider

With the adoption by the UN Human Rights Commission of the UN Guiding

One good example of GE’s approach to unique human rights challenges

The scourge of forced labour is a human rights priority globally , especially in

We also believe collaboration and best-practice sharing, through organizations such as

However, the process of achieving financial independence is often plagued with

It can be seen as a form of discrimination based on gender since the expression

Thus, essentially, sexual harassment constitutes one of the components of the