This week Mo Ibrahim’s “Index of African Governance” (IIAG) came out, documenting the stalling of Africa’s advancement of human rights. Among the poor performing nations was Malawi, whose decline was driven by a precipitous drop in Sustainable Economic Opportunity.

In a sense, NomoGaia has been witnessing this decline firsthand, as we have tracked Malawi’s most significant extractive sector investment since independence: the Kayelekera Uranium Mine.

We were back in Malawi earlier this year to monitor Kayelekera’s human rights impacts, just in time to watch the mine take steps toward closing up and leaving the country altogether.

The IIAG, created in 2007 by Sudanese telecom tycoon Mo Ibrahim as an independent project, is the most reliable index of development, governance and human rights on the continent. Just as the IIAG has linked economic opportunity with human rights across Africa, we have chronicled the relationship at the micro level – at the Kayelekera Mine itself.

Between 2009 and 2015, the Kayelekera Mine has systematically improved its human rights impacts, becoming one of the most positive forces for economic, educational and health improvements in Northern Malawi. Its high salaries sustain the local economy, even as retrenchments have become necessary. Its unionization policies have fostered collective bargaining agreements, and its nondiscrimination policies have ensured that women’s salaries match men’s while hiring policies actively seek out women workers. Health interventions protected the Kayelekera community from nation-wide shortages of HIV treatments, and the current construction of a full-scale clinic is the most significant health investment in Northern Malawi in recent memory.

On our most recent monitoring trip, Kayelekera’s negative impacts were only apparent on the right to public participation and freedom from fear – the result of opaque reporting practices, primarily on environmental monitoring. All evidence suggests that Kayelekera’s environmental management is effective, but the lack of public reporting has created a space for anti-mining activists to generate significant fear and distrust among both local populations and across the country.

As such, Paladin’s steps toward closing Kayelekera have been met with little or no alarm. Yet there are significant human rights risks incumbent with the closure of a large investment. Closure is usually precipitated by declining revenues – mine production drops, ore value drops, or some other shock occurs to affect a company’s bottom line. In these cases, layoffs alone mean that human rights impacts are likely. International groups worry about how environmental management will be carried out if Paladin leaves Malawi. Community members worry how they will support their families if their mining jobs disappear. If Paladin closes the Kayelekera Mine, the major improvements in human rights conditions in the area may be at risk.

In the meantime, Paladin deserves credit for an array of positive impacts, while still meriting criticism for opaque reporting practices.

Our monitoring report is available at the link below and in our “Work” page under Kayelekera.

KAYELEKERA HRIA MONITORING SUMMARY – 10-5-2015 Final

[Mark Wielga was in Malawi and Kenya in June. The next several posts reflect his experiences. An update to the Paladin Kayelekera HRIA is forthcoming later this summer.]

Foreign investment is a major feature of both of this week’s global development summit in Addis Ababa, and the 2030 Sustainable Development Goals. What the private sector’s role will be is still poorly established, though, even as the UN Guiding Principles has laid out the responsibilities of governments, businesses and civil society as promoters of universal rights.

So when the UN co-sponsored a dialog on business and human rights in Malawi last month, it was notable that Paladin Energy, owner of the Kayelekera Uranium Mine and the country’s largest extractive investor, was not in attendance. Paladin declined a seat on a panel moderated by an anti-mining activist.

Who is responsible for bringing business to the table?

Paladin’s absence at the meeting is characteristic of the company’s corporate-level policy of non-engagement. Although Paladin has collaborated with NomoGaia to allow access to operations and personnel, no environmental data has ever been supplied. Since opening Kayelekera’s gates in 2008, Paladin has never published an environmental monitoring report. Until very recently it did not publish its payments to the Malawian government. Activists, journalists and human rights researchers have been turned away at the gates. The rights-respectful approach to projects is to “know and show” that impacts are not negative, and Paladin has opted for opacity.

Meanwhile, state-run media publishes stories alleging that Paladin dodged taxes and damaged health, while citing no data. The Ministers of Finance and Health remain silent, though the government can point to no demonstrable investments it has made with the $1.2 million per *week* it was receiving from Kayelekera during operations, which totaled 10 percent of GDP during its last 5 years of operation.

Civil society, spearheaded by internationally-funded Citizens for Justice (CFJ) is not using data when attacking the company, either, but CFJ was slated to chair a panel on the impacts of mining on Malawian rightsholders. Its allegations against the company have ranged from watershed damage to tax evasion to radiation poisoning. None of these have borne out.

A context for collaboration?

Malawi is an extremely difficult place to do business. Minimum wage isn’t livable and many employers don’t pay it (Paladin is not among these). Government personnel systematically siphoned money from aid budgets for years. Only a quarter of roads are paved. Ninety-one percent of the population is off the grid, and where connections exist, electricity doesn’t work. Tap water, available to a minority, isn’t drinkable. The health care system is largely donor funded, and donors revoke aid to penalize corruption. The education system is corrupt and underfunded. There are large portions of the country where you can’t hire a taxi or call an ambulance, let alone get a car repaired if it breaks down. How does a company ensure that 90% of its workforce is local when 4 in 10 adults can’t read? How does it hire electricians from the local community when those inhabitants have never had electricity? How can it protect a community from the illnesses that accompany incoming job-seekers, when there is no health facility within a 12-km radius and no doctors within 50km?

A conversation about business and human rights is important to Malawi’s development. That conversation can begin with Paladin’s weak environmental reporting, but it must go much farther.

It must consider the human rights risks of operating in a country where personnel at the Anti-Corruption Bureau will tell you, “You’ve never met a Malawian who hasn’t a bribe.”

It must consider how a nondiscrimination policy can be implemented when women face systematic discrimination in society, and when primary school is not taught in the languages spoken by ethnic minorities.

It must consider how to determine a living wage when state-mandated minimums are woefully inadequate to support a household.

The UN’s co-sponsored conference on business and human rights in Malawi last week did not include those issues on the agenda.

A balance between “name and shame” and “know and show”

There are multinational corporations in Africa that are short-changing African governments by underpaying royalties, harming communities by forcibly resettling them and damaging livelihoods by degrading the environment. There are also multinational corporations in Africa that are halting disease transmission, training a mobile workforce, pushing back against government corruption, developing eco-minded engineers and breaking down ethnic and gender barriers.

The UN Guiding Principles drew their strength from the buy-in of civil society, governments and companies. As companies start demonstrating good-faith efforts to meet their responsibilities, activists and administrators will contribute most to ensuring that businesses respect human rights by recognizing both when well-meaning companies need a helping hand, and when bad actors take advantage of broken systems. It’s a difficult task, but a vitally important one.

This week, four private security contractors to the US Department of Defense were sentenced to extended prison terms for the gruesome shooting of 31 Iraqi civilians in Nisour Square, in 2007.  The sentences come on the heels of the US Government’s third and penultimate consultation on the role of the US Government in ensuring that American corporations respect human rights abroad.

The consultation, held in Norman, Oklahoma, focused on private security as one of three primary issues of concern, alongside extractive industries and indigenous rights issues. While the State Department has taken steps to require its private security contractors to sign the International Code of Conduct and adhere to ICOCA standards, the commitment does not extend across government agencies. The Department of Defense, for example, does not require its defense contractors to belong to the ICOCA.

Participants at last week’s meeting made clear that that should change.

Not only is defense contracting one of the clearest areas where government contractors pose human rights risks to civilians abroad, it is also an arena that is increasingly of concern to global industries that hire private security for their operations. Petroleum and mining companies are among the largest clients for private security companies, and they have struggled for years to ensure that their operations are not complicit in human rights violations.

Extractive companies were strongly represented at the consultation in Norman, seeking clear guidance from the US Government on how best to do that. A government lead on commitment to the ICOCA would be a start. Another major advancement would be government lead transparency. Companies have been reluctant to publish the human rights due diligence they carry out in their operations. No company wants to be the first mover, and all can hide behind the fact that other companies comparably opaque about how they manage human rights risks. The result is that companies’ claims that they are respecting human rights cannot be tested, and their human rights due diligence cannot be determined to be satisfactory in form or content. Transparency is a core human rights value.

The US Government could publish the human rights due diligence of its own contractors, and it could encourage large multinational corporations to follow suit.

It is impossible to know whether human rights due diligence of Blackwater’s operations in Iraq might have identified training shortfalls and stressful conditions among Blackwater employees that could have prevented the tragedy in Nisour Square. However, publication of such due diligence could have raised warning flags for other security contractors whose practices are similar, and publication of weak due diligence could have raised warning flags for the US Government that its contractors were ill equipped for the job at hand.

NomoGaia will be contributing input to the National Action Plan based on our practitioners’ knowledge and experience. If you have insight that might tip the scales toward improving human rights outcomes for populations affected by American businesses abroad, send comments to NAP-RBC@state.gov.

(Photo credit: Heath Powell, 2006)

[A version of this post ran on CSR Wire on March 20, 2015, available here.]

Between the global food crisis of 2008, the unanimous UN endorsement of Guiding Principles on Business and Human Rights and the undeniable influence that climate change is having on agricultural areas, a wide array of longstanding corporate social responsibility (CSR) initiatives now share space under a single umbrella: corporate human rights due diligence. As these initiatives converge around global business, it is becoming clear that piecemeal efforts to tackle supply chain challenges are not sufficient to make supply chains rights-respectful and truly environmentally sound. There are still many lessons to be learned in the corporate sector.

Water protests are about more than just quantity

Challenges in managing water risks in corporate supply chains shed light on the ways that corporate risks overlap and interact. Activists’ and communities’ growing use of human rights language to protest corporate water impacts is an embodiment of this new reality. Right to Water protests do not simply ask companies to account for their water usage – they demand that companies consider holistically the livelihoods, insecurities and welfare of the people surrounding their operations. In the agricultural supply chain, challenges are manifold. In some cases, small-scale farmers are demanding attention from large-scale agricultural operations that displace them. In others, cash crops are supplanting subsistence crops. This may appear to benefit food security in the short term, but if replacement crops are more water-intensive or less resistant to climate change, it may actually be detrimental to human welfare in the long term. When market prices tank or harvests are destroyed, smallholder cash crop growers stand to lose everything. Such events have been followed by anti-corporate protests around the globe. Beyond the agricultural supply chain, companies face additional, non-technical challenges. For example, Coca-Cola has experienced a clear call for holistic engagement on water issues with its operations in India. The company has operated a bottling plant in Varanasi since 2001 that has faced consistent water protests although hydrology experts have shown that Coke’s water use is not causing or materially contributing to the area’s falling water table. A documentary film in 2012 alleged that Nestlé was draining an aquifer used by farmers in Lahore, Pakistan. The company asserts that agriculture, not its plant, is lowering the aquifer, although evidence is lacking. The technical information—the data— would be important, but that misses the point of the protests: water security, including perceived water security, is changing.

Water Risks Aren’t Cut and Dry

Water crises are growing increasingly frequent and ubiquitous. A glance at a water scarcity map can no longer predict the site of the next catastrophe. Last month alone, two of the world’s wettest tropical countries – Brazil and Thailand – announced water crises. Unequal water distribution and pollution in Mexico has caused extreme water stress in key agricultural regions, and protesters have already halted construction of a dam that farmers feared would affect their water access. Pakistan has seen its water availability drop five-fold in 70 years, and now its joint water and energy crisis is creating double resource competition between residents and industry. Water users, including farmers, local industries and domestic users, are seeing resource competition intensify.

Most companies are not well prepared to link water scarcity problems with the complex livelihood, health and social dimensions of life that are touched by water; they advertise separate initiatives to tackle food insecurity, water scarcity, carbon emissions and social programs in their CSR reports.

That fragmentary approach just won’t work. Livelihoods are changing as globalization expands its reach, and companies with sprawling supply chains are part of that process. The technical fixes put forth by narrowly targeted initiatives are not designed to tackle the sense of insecurity the caused by the changes populations are experiencing. Coke has discovered this firsthand. Its latest technological improvements at Varanasi involved harvesting rainwater to recharge local aquifers at twice the facility’s rate of withdrawal. Coke says that upgrade would actually be improving water security in the area, on top of the significant efforts the company had made in the previous decade to cut water usage by nearly 70%. But communities and officials rejected the plan, anyway; in 2014 Coke scrapped a $25 million expansion plan.

Employing the human rights lens prepares companies to foresee and address water conflicts

There is already a growing effort by big-name companies to look beyond the factory and fence line to consider impacts outside their facilities and direct suppliers. Nike and Adidas are reducing their chemical usage to improve the quality of their discharged water. Coke and Pepsi are deeply involved in initiatives to manage water table declines near their manufacturing facilities.

The lens now needs to be turned back inward, to view these operations from the perspective of outsiders. This is referred to as the “human rights lens.” It performs the powerful function of enabling companies to understand how their presence is viewed by local populations in light of resource restraints and political disempowerment. It enables companies to see water, not as a commodity purchased, treated, monitored, measured, used and discarded, but as a source of security, cultural heritage, livelihood and welfare.

The need for a new perspective is not just about corporate empathy. Instead, it is what will enable companies to foresee and prevent complaints before they become crises. Companies that describe CSR as a “moving target” have missed the mark. Coke has faced intense scrutiny for its bottlers’ heavy use of groundwater, but as the company began addressing water impacts, new complaints surfaced against the company’s sugar suppliers, which used children to harvest cane. This does not reflect shifting social priorities; it reflects the consistent expectation that companies produce their goods and services without violating human rights. Coke has noticed the pattern; it has broadened its water focus to include the water impacts of its sugar suppliers, and it has steadily ratcheted up its labor standards from its factories down to its raw materials suppliers. Coke’s audits, supplier questionnaires and codes of conduct are moving the company forward, yet I suspect that Coca Cola has not faced its last protest or shutdown— they didn’t position Coke to effectively answer the latest Varanasi protests.

The UN Guiding Principles describe how to “do no harm”: conduct due diligence on your organization, operations and business relationships to identify and address human rights impacts in an ongoing manner. Identifying human rights impacts requires directly engaging with the affected. So the question for global companies with sprawling supply chains is: how is that done?

The most direct way to get a handle on conditions on the ground is to ask the people who are affected.

“Stakeholder engagement” has become a term of art. The CEO Water Mandate guidance demands it, UN Guiding Principles demand it. Coke, Pepsi, Apple, Cisco, Hanes, GAP, Microsoft and Samsung, among others, have published definitions of stakeholders and descriptions of engagement policies. These companies have joined, and in some cases, facilitated multi-stakeholder initiatives to incorporate NGOs and governments into discussions on social risks of global business operations. These initiatives are not designed to incorporate the individuals that actually surround and interact with their operations. Governments often have financial interest in promoting corporate growth over public welfare. Companies can be conflicted over whether operating within the letter of the law inherently sets them up to violate rights. NGO representatives also have agendas, often dictated by their funding sources, which require them to attack certain companies or acquiesce on certain topics. Many of the allegations against Coca Cola in India have been proven false over the years, but activists continue to receive funding to advocate for their cause. As a result, they are not always positioned to advocate for the truly affected.

To reach the affected, rightsholder engagement is needed. Rightsholders are the individuals whose human rights are impacted by a company’s operations. They are distinct from stakeholders, in that they often have no stake in the company at all – just a stake in their local livelihoods and welfare. The importance of this group, and the lens they apply to corporate activity, has largely eluded many apparel, tech and food/beverage companies. Recent research has identified these industries as significant laggards in terms of business and human rights and, in particular, in engaging directly with affected communities. These companies have become CSR leaders in many arenas but they have fallen behind on human rights. Apparel companies focus on factory safety in Bangladesh without recognizing that a human rights lens would reveal a broader array of risks to worker welfare. Beverage companies consider the environmental impacts of their water usage without recognizing the cultural role that water plays in many societies.

Corporate needs to lead, but local managers need to buy in

Plant managers are poorly positioned to start engaging with rightsholders. For one thing, they are not trained or hired to manage community perceptions or grievances. For another, many managers take pride in their work and resent the notion that they require the additional scrutiny of a human rights evaluation. This is not an insurmountable hurdle. Rather, it creates an opportunity to for the corporate management to lead, and to clarify the real-world value of human rights to an operations manager.

Examples from HRIA processes

Employing the human rights lens on projects in the forestry and extractive sectors, NomoGaia has seen companies and rightsholders benefit from improved mutual understanding. In one example, forestry company Green Resources Limited suffered from shortages of protective gear. This was a source of consternation for field managers, who watched workers halve their productivity when the lack of proper footwear made tromping through pine groves slower and the lack of proper gloves made tree trimming less safe. As human rights evaluations became a repeated practice, they came to recognize that human rights assessors could be used to leverage their requests for improved safety gear and other equipment.

This effect extends beyond the direct workforce. Uranium mining company Paladin’s community relations team had a strong and regular presence in the local community outside the mine, which made them accessible to vegetable producers who supplied food to the mine. These farmers, who could not access a formal grievance mechanism, recognized the opportunity to tell the community relations department that the procurement manager was swindling them on crop purchases. When it happened again, they recognized rightsholder engagement processes as a mechanism to re-issue their grievance.

Human rights and business practitioners have found clear benefits to directly engaging affected communities about impacts, experiences, and insecurities.

The advantages of the human rights lens

Industries with unwieldy supply chains can draw lessons from the use of the human rights lens in other industries. That is not to say these companies have all the answers or are immune from human rights shortcomings; the arc of the business and human rights learning curve is long. But the rightsholder engagement processes taps into fundamental learnings, and these learnings can benefit transnational companies struggling to understand the many dimensions of the Right to Water.