Corporate respect for human rights in the Chinese context

RBC ForumKatryn Wright, Programme Director, Outreach and Capacity Building, Global Business Initiative on Human Rights (GBI). The views expressed here are the author’s and do not represent the views of the GBI member companies or partner organisations.

With China’s growing importance in the global economy, increasing overseas foreign direct investment, and very real human rights impacts, Chinese and international companies face greater imperatives at home and abroad to address human rights. In China and internationally, there are greater pressures and incentives to address business and human rights – from rights-holders, governments, business partners, investors, consumers and civil society. In this context, Chinese approaches to responsible business will be discussed as part of the agenda of the OECD’s 3rd Global Forum on Responsible Business Conduct in Paris on the 18th and 19th June 2015.

How are Chinese policymakers and business leaders responding to increasing pressures to prevent business-related human rights harm? And what is needed to support business to live up to standards and prevent adverse human rights impacts?

The baseline international normative standards on business and human rights are clearly articulated in the UN Guiding Principles on Business on Human Rights (UNGPs) which clarify the respective duties and responsibilities of State and business actors. The UNGPs outline that the corporate responsibility to respect human rights entails developing a policy commitment, implementing human rights due diligence processes, and providing or cooperating in remedy when the business causes or contributes to human rights abuse. Increasingly the UNGPs are being integrated into other international standards, including the human rights chapter of the OECD Guidelines for Multinational Enterprises. The Chinese government expressed its appreciation and support for the UNGPs at the UN Human Rights Council in 2011.

Recent years have also seen a shift in Chinese government policy in relation to business and human rights and corporate social responsibility. The China Chamber of Commerce of Metals Minerals and Chemicals Importers & Exporters (CCCMC) Guidelines for Social Responsibility in Outbound Mining Investment call for companies to ‘observe the UN Guiding Principles on Business and Human Rights during the entire life-cycle of the mining project’. Other policy developments include: the incorporation of human rights in social responsibility guidelines for the electronics industry that refer to the UNGPs; the mandating of social impact assessments for large footprint projects; and the drafting of a law on public participation in environmental protection and impact assessments. In parallel, a recent draft law relating to foreign NGOs has been the subject of concern, with the European Chamber of Commerce in China expressing particular challenges as it pertains to partnerships between businesses and NGOs.

Within this context, there is therefore growing urgency for companies – including Chinese-headquartered private and state-owned companies, multinational companies operating and investing in China, and companies that have business relationships with Chinese companies around the world – to develop knowledge, tools and experience to implement respect for human rights in practice. This was apparent when in 2013, a coalition of Chinese and international organisations convened 200 predominantly business representatives in Beijing to discuss (for the first time) human rights within the framework of the UNGPs. There are a number of complementary avenues that should be pursued in order to build learning, capacity and practice on the corporate responsibility to respect human rights by Chinese business leaders – with crucial roles for the Chinese business community, along with OECD companies and business partners, civil society and other stakeholders.

One avenue that has clear value is the creation of learning forums on human rights, tailored to Chinese business needs and impacts. This may require safe-space forums for companies that may be competitors to collectively address human rights impacts. Companies should leverage their business relationships to engage joint venture partners, suppliers and customers to increase scale and momentum around commitments to progress. Safe-space forums established so far have enabled learning and exchange between Chinese and OECD companies on human rights issues such as community engagement, community grievance mechanisms, local content issues in Africa, indigenous peoples’ rights and collective bargaining. There is strong interest from business leaders in exploring how to address a range of human rights issues, good practices and lessons learned. Yet there are currently few platforms for companies to turn to for support and expertise.

Another avenue could involve constructive and innovative engagement between diverse stakeholders, including companies and business associations, civil society and international organisations. One example is the collaboration between CCCMC, Global Witness and the OECD to deliver guidelines for overseas Chinese mining companies which incorporate human rights and the UNGPs. Further collaboration between CCCMC and the OECD in developing due diligence guidelines on responsible mineral supply chains will encourage alignment with international standards. Such collaborations are productive ways to utilise expertise, meet standards and expectations and improve business practices. Dialogue and collaboration between multiple stakeholders on human rights is also needed in order to consider how to interpret standards, identify good practice, create transfer of expertise and ideas, and work together to innovate and find creative solutions, particularly in complex situations and across business relations. Civil society can also play important roles by acting as key interlocutors for stakeholder and rights-holder engagement on the ground in locations where Chinese companies are operating overseas.

There is a clear need for more concerted and collaborative efforts by all stakeholders to advance business and human rights in the Chinese context. This will require commitments and collaboration by business and other stakeholders. Some companies are beginning to take action, but increased support is needed from multiple stakeholders to achieve scale. Shared standards and norms need to be aligned to the UNGPs, and good practices need to be identified. Capacity-building, behaviour change and relationship-building are needed now and will require commitment and support from all stakeholders.

Useful links

GBI member companies had combined revenues of over $1.5 trillion in 2014 and have 1.75 million employees operating in diverse industries and in over 190 countries including China. Since 2012 GBI has been working in partnership with Chinese and international organisations to engage business leaders on the corporate responsibility to respect human rights in the Chinese context. For more information visit: http://www.global-business-initiative.org/work/china1

Third Global Foru‌‌m on Responsible Business Conduct, 18-19 June 2015, Paris, OECD

Too much money is bad for you

Finance and inclusive growthBefore the recent crisis, the biggest failure of a commercial bank in the UK was the City of Glasgow Bank in 1878. The CGB collapse was due to mismanagement and fraud, and the authorities set up a commission of inquiry that recommended a number of measures to improve corporate governance. No they didn’t. They arrested the bank’s directors and sent them to prison, and corporate governance improved remarkably. As this Bank of England paper argues, the CGB collapse had a lasting impact on the financial system, requiring banks to be externally audited, and prompting a move away from unlimited liability banking (too late for William Love, whose newly worthless £200 shareholding exposed him to £5500 liability). The crisis also led to a wave of mergers and the emergence of the banking structure dominated by big banks we know today, as well as a change in risk management, with banks increasing the share of more liquid, lower-risk assets on their balance sheets.

The Bank of England paper discusses the lessons for today from the CGB crisis, and how the financial sector should change. The Bank’s Governor, Mark Carney, came back to the question in a speech last week about “Building real markets for the good of the people”. Carney argues that in the City, “Unethical behaviour went unchecked, proliferated and eventually became the norm. Too many participants neither felt responsible for the system nor recognised the full impact of their actions.” He feels “let down” by this, and explains how it contributed to “ethical drift”. I strongly advise you to use this lovely concept in court next time you’re caught stealing.

Why did they start drifting? It wasn’t to feed their starving children if the data in a new OECD Economic Policy Paper are right. Finance and inclusive growth shows that the finance sector pays better than other sectors, even for workers with similar profiles, and the gap with people doing similar jobs widens as you scale the corporate ladder. The paper doesn’t say whether this is because traders and the like are paid more than they’re worth or because the rest of us are paid less than we deserve. (What do you think, readers?) And in more news, “male financial sector workers earn a substantial wage premium over female financial sector workers, especially at the top”.

Another finding reminds me of a scene in a film with Roberto Benigni when he goes to the bank to borrow money because he’s broke. The banker refuses, explaining that you need collateral. Furious and incredulous, Benigni protests that when he goes to get tomatoes, the greengrocer doesn’t expect him to have aubergines in the house before he’ll serve him. That translates as “The distribution of credit can be an additional source of income dispersion if it implies that low income people cannot finance the opportunities they identify to the same extent as their better-off counterparts”.

These then are the findings most of us would have guessed or noticed anyway. The real surprise in the paper is the argument that there can be too much finance in the economy. The authors show that the extravagant salaries paid to the ethical drifters are only one of the negative consequences of the way the sector has developed. The analysis uses two direct measures of financial activity: the volume of credit provided by financial intermediaries such as banks to the non-financial private sector, and stock market capitalisation.

Over the past half-century credit by banks and other financial institutions to households and businesses in OECD countries has grown three times as fast as economic activity. Stock market capitalisation has tripled relative to GDP over the past 40 years, but today the value of stock markets still only equals 65% of GDP, just over half that of financial sector credit.

The OECD economists looked at how this growth in the financial sector affects growth in the rest of the economy. Initially, an expanding financial sector is beneficial, but it eventually reaches its ideal weight, and apart from contributing to inequality, “further increases in its size usually slow long-term growth”. This conclusion holds even when you consider a range of other factors including country specificities, the business cycle, and even financial crises. In general, more credit to the private sector slows growth in most OECD countries, while more stock market financing boosts growth. Bank loans slow economic growth more than bonds. Credit is a stronger drag on growth when it goes to households rather than businesses.

The long-term increase in credit is linked to slowing growth through five channels, including bank lending increasing more than bond financing, and a disproportionate increase in household credit compared with business credit. The first channel the OECD identifies may however amuse those of you with good memories (or long-held grudges) – excessive financial deregulation. Compare and contrast that with this, from 2008: “Observing the changes that have taken place in the past 25 years, a consensus has emerged that a deregulated financial sector operating in a competitive, open environment with market-based supervision grounded in international norms, is optimal contribution for economic development.”

Still, we admit our mistakes and are trying to learn from them, and even have a whole programme called New Approaches to Economic Challenges (NAEC) that calls for “a serious reflection to revisit policy approaches” in the wake of the crisis. Can the financial sector and the policymakers who influence it do the same? The OECD strategy to reform the financial sector to stop it slowing growth and making inequality worse has three broad components.

First, use macro-prudential instruments (measures that address risks to the whole system rather than individual institutions) to prevent credit overexpansion, and make sure banks maintain sufficient capital buffers. Second, reduce subsidies to too-big-to-fail financial institutions through break-ups, structural separation, capital surcharges or credible resolution plans. Reduce the tax bias against equity financing and make value added tax neutral between lending to households and businesses.

We could also remind the financiers what The Spectator said in arguing against a national subscription to help William Love and the others: “The notion that a grand failure is a pure misfortune, and one for which the partners are irresponsible, is one far too widely diffused already, and one which it is wrong as well as inexpedient to make deeper.”

Useful links

Too Much Bank Lending Can Slow Economic Growth: OECD Chief Economist Catherine Mann talks about the impact of bank lending on finance practices and economic growth on Bloomberg Television’s “Market Makers.”

Macro-prudential policy, bank systemic risk and capital controls by Adrian Blundell-Wignall and Caroline Roulet in OECD Journal Financial market Trends 2014

Striving for excellence – international sporting events we can be proud of

RBC ForumJohn Morrison, Executive Director of the Institute for Human Rights and Business

This week, the OECD’s Global Forum Responsible Business Conduct includes a plenary session on the issue of “Responsibility in International Sporting Events” with the Fédération Internationale de Football Association (FIFA) included amongst the panellists. Although FIFA has been in the news on a daily basis due to the corruption allegations engulfing its leadership, the issues run wider and across all major sporting traditions: what should the social responsibilities of such events be? My speech this week in Paris will argue for greater oversight and due diligence at every stage of the mega-sporting events delivery process: all the way from the bidding round to the legacy (normally an 8-12 year cycle). I will make the case for an independent, impartial and trusted body to support and add legitimacy to such processes. The experience of the OECD is also directly relevant, in particular the developing role of National Contact Points under the OECD Guidelines for Multinational Enterprises, as Roel Nieuwenkamp has argued amongst others.

In many ways, Paris is the perfect setting for such a discussion. On 23rd June 1894, the International Olympic Committee (IOC) was born here at a Congress organised by Baron Pierre de Coubertin. The Olympic Charter places sport at “the service of the harmonious development of humankind, with a view to promoting a peaceful society concerned with the preservation of human dignity.” Fifty-four years later in 1948, in the wake of two devastating world wars, the United Nations adopted the Universal Declaration of Human Rights at the Palais de Chaillot also in Paris. The Declaration’s Article One states clearly a similar aspiration that “All human beings are born free and equal in dignity and rights.” But as we gather again in Paris, sixty-seven years later, are we any closer to embedding human dignity in the heart of not just what happens on field or track, but also the dignity of those impacted by the staging of the events themselves?

Mega-sporting events appeal to the noblest aspirations, the pursuit of excellence and creativity of athletes. But they also play to the ambitions of governments and leaders and the image they wish to project internationally. As mass televised spectacles watched by hundreds of millions of people around the world, major sporting events today have also become arenas for corporate promotion and advertising – with sponsorship rights zealously protected between rival companies and brands. The very legitimacy of major international sporting traditions rests on these values. They have no social license if they do not fully embody in every way human rights both on the field of play, and in the processes involved in organising the events – the processes of tendering, bidding, acquiring land, constructing stadia and other infrastructure, managing supply chains, providing security, arranging and raising sponsorship money, and maintaining the legacy of each event after completion.

I feel confident that 2015 will be the year for commitments from sporting bodies, in the way that the Commonwealth Games Federation and Formula One have already done. The issue now becomes effective implementation. The United Nations Guiding Principles on Business and Human Rights and their full incorporation into the updated OECD Guidelines on Multinational Enterprises are highly relevant to all aspects of Mega-Sporting Events, from planning to execution and follow up. At the Institute for Human Rights and Business where I work, we have been developing a programme of work to assist those involved in planning and implementing these complex events. We’ve developed a website – www.megasportingevents.org – with the support of the Governments of the UK and Brazil that provides extensive information and a compilation of good practices from London 2012, Glasgow 2014, and Rio 2016 Games as well as some of the human rights challenges of all these and other events.

We are working now to ensure that the sports governing bodies, the host governments and the games organising bodies for the next great events – Russia 2018, Tokyo 2020 and Qatar 2022 – are fully aware that there is a baton of knowledge and practical experience that can be passed from event to event about how to fully integrate concern for human rights principles and standards into all aspects of hosting such events. The same is true for sponsors, contractors and suppliers – and perhaps the ultimate of all suppliers, the athletes and sports stars themselves. A number of leading voices in sport have started to speak up – if you dedicate your life to sport shouldn’t the events that celebrate excellence in sport live by the same principles as you do?

Our aspiration is to work, with others, towards the creation of a permanent and impartial body that can sit across sporting traditions and advise the work of cities, governments, sponsors, civil society and trade unions. Such a body could play an important oversight role including support for local independent bodies for each event. I am pleased to report that a number of governments are supporting this endeavour and so too are the leaders of some sports bodies, key sponsors and other NGOs and UN agencies such as UNICEF. Let us all work together and make the vision of Paris – mega-sporting events and human rights – a fully sustainable one, so that we move faster, higher, stronger, towards a world of dignity and equality, where the pursuit of excellence is underpinned by respect for human rights.

Useful links

Third Global Foru‌‌m on Responsible Business Conduct, 18-19 June 2015, Paris, OECD

Social capital in the UK

BLI InitiativeDr Veronique Siegler, Senior Research Officer at the UK Office for National Statistics (ONS), who works in the Measuring National Well-being team and currently leads the project on social capital.

“Social capital is the glue that holds societies together and without which there can be no economic growth or human well-being” (World Bank, 1998)

In general terms, social capital represents social connections and all the benefits they generate. High social capital means a “happy society”, where people are connected, tolerant, help each other and spend time for the “common good”. They have trust in others and in institutions, and are empowered to shape the society they live in. This has positive impacts on a range of areas, such as personal well-being, health, employment or crime.

The Office for National Statistics (ONS) is currently looking at how to measure social capital and its importance to the well-being of people, as part of the Measuring National Well-being Programme, launched in 2009.

There are 4 main aspects of social capital that the ONS aims to measure. These are personal relationships, social network support, civic engagement, and trust and co-operative norms. We have developed a set of 25 headline measures across these aspects. So what do these measures tell us about social capital in the UK?

Personal relationships and the support they can provide are important for people’s happiness, mental and physical health. This includes relationships with friends, family and neighbours. In the UK in 2011/12, most people (95%) reported having at least one close friend but 11% reported feeling lonely all, most or more than half of the time.

The support we give and receive with our family, friends or neighbours also matters. For example, the different generations within a family can support each other and this can be especially important in difficult economic times. Most people in the UK in 2010/11 reported being able to rely a lot on their partner (83%) and on their family (62%) but less than half people (45%) felt they could also rely on their friends in case of a serious problem.

We also look at whether people spend time to shape the society they live in, by voting, or through activities such as volunteering, organising a street party or signing a petition. People who are engaged in such civic and political activities tend to be happier, healthier and have a greater sense of purpose of life. They are more likely to trust other people and have a diverse circle of friends. In the UK, in 2012/13, more people donated money (67%) than time (19%) to organisations or charities. Around one-third (34%) of people in the UK in 2011/12 reported having been involved in at least one political action (the most common being signing a petition). However, a quarter (23%) of people also reported not being interested at all by politics in the UK 2012/13.

The trust people have towards each other, but also the trust in their institutions, such as their government, is important for the healthy functioning of democracy. Only a third (31%) of people tended to trust their national government in the UK in November 2014. Low trust in politicians and governments is an ongoing concern in the UK and across Europe. The standard of living and the economic situation of a country have been shown to be important factors affecting how people rate their trust in government.

Values such as honesty, solidarity or tolerance, enable people to co-operate with each other. At a neighbourhood level, these values help people to live together harmoniously in local communities. In the UK in 2011/12, nearly two-thirds (65%) of people felt people in their neighbourhood can be trusted, and nearly three-quarters felt that people get along with each other (72%) and are willing to help their neighbours (71%) in their local area.

ONS is continuing to develop and refine its measures on social capital, based on feedback on how they are being used. ONS is also planning to look at changes over time and inequalities in social capital. This all feeds into the wider ONS work on sustainability, where the different forms of capital stocks are explored: social capital measures will supplement information already collected on human, natural and economic capital.

Useful links:

OECD Better Life Index

For more information on the ONS Social Capital work, see the Social Capital guide

For more information on the ONS Measuring National Well-being work, see Measuring National Well-being

Crowd sourcing models of fragility

States of fragilityJolanda Profos, OECD Development Co-operation Directorate

The OECD’s new report States of Fragility 2015: Meeting Post-2015 Ambitions addresses the substantial challenges of defining – and classifying – fragility. The report proposes a multidimensional approach to the concept of `fragility’, rather than using a simple one-dimensional list. It argues that breaking down concepts of fragility into various dimensions can enable better understanding of the causes and drivers of fragility, thereby informing a better response.

The idea of moving to a deeper and more substantive way of analysing fragility has gripped the imagination of many of those who work on the issues. The short chapter of the report that deals with this topic has generated more feedback than any other, encouraging a thoughtful and also thought-provoking debate, including an interesting piece from Frauke De Weijer.

The multidimensional model put forward by the report is based on five dimensions taken from the proposals for the Sustainable Development Goals (SDGs), each measured against three indicators that serve as proxy measures of those issues, in the absence of agreed SDG indicators. Yet some argue that the Sustainable Development Goals model that was used lacks a clear enough social dimension, or that the model used in the report should have been more closely framed around the New Deal’s Peacebuilding and Statebuilding Goals (PSGs). Frauke suggests that there must be better ways of capturing external stresses and avoiding unintended consequences. Duncan Green, on the other hand, warns of the risks of overloading the models with almost every issue under the sun.

All told, the debate reflects an emerging recognition that what the report is trying to do is clearly not simple. The specific datasets used can make a difference in the perspective that is captured on the issues.

This is where the challenge becomes both intriguing and acute. Measuring conflict and fragility is not the same thing as measuring, say, the height of a wall; evidence tells us that not only what, but how you measure matters, and that it matters a lot. This is why agreeing on a model for tracking fragility is nightmarishly difficult, and why debate around it is extremely important.

Say you include an index on corruption that measures administrative corruption (as most perception studies do) and somebody else uses a measure that is based on proxies for grand corruption – do they have the same relevance for levels of fragility? Work on fragility and corruption suggests that the answer is a clear “no”. Different types of corruption and (crucially) how they are organised may have different effects. Equally, there are differences if your measure of violence is primarily focused on urban youth homicide versus political violence: the relationship of the violence to the political system is inevitably not the same.

The 2016 States of Fragility report will further revise the model for measuring fragility, dropping the idea of a simple list by 2017 at the latest, and moving to tracking resources flows to fragile states through a multi-dimensional lens. The idea is to focus attention on the need to support states and societies as they move from fragility toward resilience, holding all actors to account for their commitments.  That responding to fragility requires not only for aid to become smarter, but also for much broader changes.

The information in these reports is a public good. Deciding what the model contains should, therefore, reflect the needs of all those engaging with issues of conflict and fragility. We welcome debate on the nature of the model as an essential part of the process.

Useful links

OECD work on governance and peace

As demands for better human rights reporting grow fast, help is at hand

RBC ForumRoel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct and a member of the Eminent Persons Group that has overseen the development of the UNGP Reporting Framework (@nieuwenkamp_csr); and Caroline Rees, President of Shift, the leading centre of expertise on the UN Guiding Principles, which co-facilitated the development of the UNGP Reporting Framework together with Mazars.

When the OECD Guidelines for Multinational Enterprises were revised in 2011, one of the most important changes was the addition of a new chapter on human rights. Over the four years since that chapter was introduced, ever more companies have begun the journey of conducting human rights due diligence: the process of assessing and addressing their human rights impacts, and tracking and communicating how well they do so. And ever more initiatives have developed or refined sector-specific tools to support these efforts: from the Equator Principles for banks to the Voluntary Principles on Security and Human Rights, to the Roundtable on Sustainable Palm Oil.

Now we see another and important trend emerging: as time passes, and the guidance becomes more sophisticated, there are fast rising expectations among investors, governments and civil society that companies provide evidence of what they are doing to put the Guiding Principles into practice. Yet companies’ reporting on their human rights performance remains at best the poor cousin of other non-financial or ‘sustainability’ reporting.

Many reports still focus on philanthropic projects divorced from the human rights issues associated with the company’s core business, or on community volunteering and other commendable but discretionary activities. Where there is relevant information on supply chain audits or community consultation, it is often unclear how these processes inform core business decisions.

Meanwhile those who write reports are frustrated, and understandably so. It’s unclear who actually reads the reports they produce. And the prospect of more demands from more sources leads inevitably to groans at the prospect of chasing down more data for the sake of data.

It doesn’t need to be that way. The UN Guiding Principles Reporting Framework, launched in February, takes a different approach to what human rights reporting could and should be. Two features stand out in particular.

First, the UNGP Reporting Framework asks companies to focus their human rights disclosure on their salient human rights issues: those human rights at risk of the most severe impacts through the company’s activities and business relationships as defined by how grave they are, how widespread, and how hard to remedy. This is not a new idea – in fact, identifying salient human rights issues is simply the first step of human rights due diligence as required under the OECD Guidelines and the UN Guiding Principles on Business and Human Rights.

Importantly, this process starts from the perspective of risk to human rights, not risk to the business. But for any company, an understanding of its salient human rights issues is also indispensable to business success over time.

We don’t have to search long in our newspapers these days to find evidence of how severe impacts on people bring significant risk also to the businesses involved. We can read of literally scores of extractive, construction and other projects delayed or disrupted when communities protest their displacement from land and their loss of livelihoods. Research shows the many kinds of costs companies incur from the conflict that so often ensues.

We see brand company reputations suffer when their products are made by people who die in Bangladeshi factory fires and building collapses or by forced labourers in the Thai fishing industry. With research showing that over one-third of the market capitalization of large listed companies in the UK lies in their reputations, these are hits they cannot afford to carry.

Indeed, research shows that under the complaints system provided through the OECD’s own National Contact Points (NCPs), the largest category of complaints today relates to human rights and typically an alleged failure to conduct human rights due diligence. Most recently a case was brought to the NCP system against FIFA for failing to engage in due diligence concerning human rights for migrant construction workers in Qatar. While non-binding, the NCP mechanism has brought about real results through its mediation procedures. For example recently in two separate cases respectively involving Formula One and Karl Rieker (a German apparel retailer), NCP mediation processes resulted in the companies’ agreement to strengthen their environmental, social and governance (ESG) due diligence systems. In another case, the government of Canada barred future financial support through commercial diplomacy to a mining company which refused to participate in the NCP mediation process and which was alleged to have contributed to adverse human rights and environment impacts through its activities.

In short, the evidence is strong and growing that where risks to human rights are greatest, they converge strongly with risk to business. So for any company, knowing and addressing its salient human rights issues just makes good sense.

Second, the Reporting Framework provides a set of questions for companies to answer: questions such as, ‘How does the company demonstrate the importance it attaches to the implementation of its human rights commitment?’ and ‘How does the company integrate its findings about each salient human rights issues into its decision-making processes and practices?’.

In other words, the Framework does not impose indicators or metrics from outside the company, but offers a set of meaningful questions that any company can answer in some way. Most importantly, these are questions to which any company needs to have answers internally, even if they are not reporting externally. It is in finding those answers that they will understand whether human rights risks are being managed effectively.

So the Reporting Framework is much more than a tool for reporting – it can be seen and used also as a tool for improved human rights due diligence. It translates the human rights chapter of the OECD Guidelines, and the UN Guiding Principles on Business and Human Rights that it mirrors, into simple questions in everyday language. The Reporting Framework’s Annex also helps companies recognize and understand the array of internationally-recognized human rights that need to be addressed through their due diligence, and the kinds of ways in which impacts can occur.

As a result, using the UN Guiding Principles Reporting Framework is not an additional reporting burden on companies. It’s a means of doing better business that meets both OECD and UN standards with regard to human rights.

Useful links

The UNGP Reporting Framework was launched on 24 February, and is already being used and promoted by a wide range of companies, NGOs and investors, including through a statement of support from over 80 investor groups representing $4.26 trillion in assets under management. For more on the Reporting Framework see www.UNGPreporting.org.

Third Global Foru‌‌m on Responsible Business Conduct, 18-19 June 2015, Paris, OECD

Women in transport

and truck drivers, and CEOs, and...
and truck drivers, and CEOs, and…

Magdalena Olczak-Rancitelli, International Transport Forum

The role of women in the transport sector is something that needs to be addressed. Women account for only 17.5% of the workforce in EU urban public transport for example, and hold less than 10% of technical and operational jobs. In the United States, women comprise only 15% of transport and related occupations and only 4.6% of commercial truck drivers are women.

Changing these numbers to achieve inclusivity and gender balance in the transport sector is a very ambitious agenda. What is transport-specific about the gender issues? What are the catalysts for change? How can different stakeholders support this aim?

These questions were at the heart of a debate during the recent International Transport Forum’s 2015 Annual Summit in Leipzig, Germany. Under the theme of “Women Shaping Mobility for a Connected World, transport ministers, business leaders, entrepreneurs, civil society and academics shared their experiences and good practices, and emphasised the message that a strong transport system depends on a vibrant and diverse workforce which includes women and men.

Closing the gender gap in the transport sector is a priority for many governments. “People should succeed because of their training, ability and commitment. Transportation will always be a major factor for all nations around the world. We will need all skilled individuals to operate and manage our networks”, highlighted the Canadian Minister of Transport, Lisa Raitt, for whom promoting women’s leadership is of paramount importance. Half of the senior executives in the Canadian Ministry of Transport are women, and similarly, gender parity has been achieved across the boards under the Minister’s responsibility.

For Susan Kurland, U.S. Assistant Secretary of Aviation and International Affairs, “Women bring a unique perspective to the issues facing a modernising global transportation system. When women are given an equal opportunity to succeed in transportation careers they unlock new pathways for growth and profitability.” This reflects the strong engagement of the U.S. Department of Transportation (USDOT), at the highest level, to attract, retain, and advance the careers of women in the sector. The Department aims to build an economically compelling case by leveraging a growing body of research that outlines bottom-line benefits to transport systems that have greater numbers of women.

The USDOT is fully engaged in these endeavours at national level, and also international level, where it leads APEC’s Women in Transportation (WiT) initiative to increase women’s economic engagement in the transport sector throughout the region. A four-pillar approach is taken to achieve this: ensuring access to education, creating access to jobs, increasing retention, and providing a path to leadership. A data framework is being developed in the context of this initiative to enhance opportunities for women’s employment in the sector, as well as to improve the sector’s infrastructure and services to women as consumers. The results of the survey will be presented at the APEC WiT Forum and Transportation Ministerial in October 2015, in Cebu, Philippines.

But not only women are supporting stronger presence of women in the transport sector. New Zealand’s Minister of Transport Simon Bridges indicated that his government promotes parity on boards: 30 % of board members of key transport agencies in New Zealand are women. Similarly, Tunisia’s Minister of Transport, Mahmoud Ben Romdhane saw value in having more women as part of the workforce at all levels in transport, including at board level, and indicated he was proud to announce that he has appointed women as CEOs of two major transport companies – Tunisair and the national rail company SNCFT.

Also in the corporate world, leadership and role models are needed. Women in senior management positions can impact board dynamics and broaden a company’s knowledge as well as raising its profile. The effect of more women on boards can also trickle down to management and other levels in the hierarchy.

Jessica Jung, Director of Corporate Social Responsibility of Bombardier Transportation,
pointed out that in order to increase the number of women in the male-dominated transport industry, it is crucial to set specific targets, develop road maps to reach these, and implement regular monitoring. Setting targets in the recruitment process is also important. To avoid cognitive biases, Bombardier decided to ensure that a balanced gender mix of candidates is invited to the final interview round.

More women means bringing more talent to transport and a broader view conducive to innovation. For Robin Chase – founder of Zipcar, Veniam, and the author of the recently published book “Peers Inc” – diversity is vital for creativity. Robin provided the example of Lyft, a car sharing company, intended to be a more woman-friendly option than taking taxis. For Lyft, where 60% of passengers and 30% of drivers are female, gender diversity in decision making is critical to the company’s experience-based growth strategy. Fourteen of Lyft’s 30 executives at director level and above are women, and these include leaders in engineering and operations.

Women’s skills and perceptions are central to addressing different gender requirements in access to transport and mobility, as well as to safety and security. Silvia Maffii, Professor of Transport Planning at Milan Polytechnic, and co-author of the CIVITAS policy paper “Gender equality and mobility: mind the gap!” showed how women and men use transport modes differently. Often, these differences have not been taken into consideration in transport planning, neglecting problems of accessibility and safety and thus limiting women’s social participation.

Moreover, neglecting women’s preferences of transport and mobility may also limit women’s economic participation. A recent analysis carried out by US researchers shows a negative correlation between commuting time and women’s participation in the labour force. An increase of 1 minute in commuting time in metropolitan areas is associated with an approximately 0.3 percentage point decline in the women’s labour force participation – reflecting women’s mobility patterns: they do not simply commute but do a lot of additional travel.

Gender sensitive mobility planning should be also seen as an opportunity to promote urban sustainability. A study from Malmö shows that women choose sustainable alternatives to a greater extent than men. Men use cars for 48% of their transport needs, while for women the figure is 34 %. If men started travelling like women, CO2 emissions would go down by 31%, particle emissions would decrease by 21%, nitrogen emissions by 25%, and the noise level would go down by 1 decibel. Reduced negative effects on the environment, accidents and noise imply annual savings of 300 million kronor (32 million euros).

This debate proved how rich the issue of women in transport is and that the enhanced participation of women, with their unique skills and perceptions, is an opportunity that the sector cannot ignore. Next year’s Annual Summit, “Green and Inclusive Transport”, will certainly be an occasion to continue this multi-stakeholder dialogue. So, mark your agenda: 18-20 May 2016, Leipzig, Germany!

Useful links

Help shape APEC’s WiT data framework by contributing your views as private sector stakeholders: responses via survey.

Networking Breakfast “Women Shaping Mobility for a Connected World”, International Transport Forum’s 2015 Annual Summit in Leipzig

OECD work on gender

Key data on gender equality