This time, we had the opportunity to sit down with Ariel Meyerstein, Vice President, Labour Affairs, Corporate Responsibility & Corporate Governance at the United States Council for International Business and member of the Ethical Alliance Advisory Council, to hear his thoughts on anti-corruption, responsible business conduct and human rights issues.
What about the Ethical Alliance excites you?
The fact that it is headquartered in Asia and bringing ethical issues to the forefront for business in that region and in other fast emerging economies, like Africa, in a way that provides relatively easy access to vast amounts of information, particularly for third-party due diligence, is critical to scaling up these practices and a culture of compliance. There have been decades of regulatory efforts on anti-bribery and corruption at the United Nations (UN) and at the Organisation for Economic Co-operation and Development (OECD) in certain jurisdictions like the US and UK, but somehow those efforts have not made as full an impact in many developing economies. It is businesses in these very economies though that are sourcing vast amounts of material to the rest of the world through complex supply chains, so the enforcement gaps in these regions is no longer tenable.
Tell us more about your background and how you started your career.
I got very interested in conflict resolution and human rights at a relatively early age (in high school), probably from my family’s history coming out of the Holocaust and my parents’ commitment to social justice. I pursued this through internships in college and then went off to law school with the idea of being a scholar and human rights advocate, while simultaneously maintaining an interest in other forms of dispute resolution, such as international commercial and investment arbitration. My experience in my first year of law school working at the United Nations International Criminal Tribunal for Rwanda really shifted my focus from the retrospective redress of war crimes through international justice to looking at the underlying causes of social upheaval, including development status. At the same time, the UN Guiding Principles on Business and Human Rights and other private-led standard setting on business-related human rights impacts (such as the commercial banks’ Equator Principles, which I researched for my doctorate) were just starting and I found it very interesting to explore how to set global ‘rules of the road’ for responsible business conduct. I now serve as a liaison between large US multinationals and the global policy institutions where those rules continue to be developed with increasing pace.
In your view, why is responsible business conduct important?
In a very abstract sense, we simply cannot operate our economic system and the businesses that fuel it devoid from the rules or ethical considerations we subject ourselves to outside of the economic sphere (if that even exists!). What is universal about human culture is that we use socially agreed norms to help us organize our behaviour, to keep things running smoothly and with as little conflict as possible. Responsible business conduct is no different – it is a set of norms and rules that we have put in place at a global level to help keep things – particularly global trade and investment – running smoothly, so that we produce the food and other material things we need while giving people jobs to afford those necessities and help societies flourish. It is not sustainable in the long run either for individual businesses – from the tiniest shops to the largest corporations – or for our governments, to run things in a way that is corrupt or that harms people or the environment. History has shown that societies will not tolerate it in the long-run, but of course, in a globalized economy, we have to find ways to manage our “global commons” which means that interconnected businesses all need to operate under similar ethical rules and all governments need to take seriously their jobs as enforcers of those rules. From a business perspective, we all trade under a brand; while some brands are more recognizable than others, everyone needs to maintain their reputation with various constituents to stay in business, be it business partners/clients, consumers or investors.
What is one important message you would highlight from the whitepaper you authored for the Ethical Alliance Resource Centre on ‘Responsible Business Conduct: Understanding Human Rights Due Diligence’?
While the responsible business conduct and human rights due diligence concepts I outlined in this whitepaper may initially seem foreign, they are not that different from the very well-established ethics and compliance concepts the business world has long embraced and needs, such as due diligence for other risks. Human rights due diligence will work best if it can be better integrated into those existing processes. I also highlight major differences, which do not pose insurmountable challenges for businesses, and I hope will also present a learning curve for Ethical Alliance members.
The main difference is that human rights due diligence is not about enterprise risk per se, rather, the primary focus is on salient human rights impacts to individuals outside of the enterprise. Of course, as I just noted, the two are likely connected, particularly when you consider the intangible but incredibly important role played by reputation in business transactions. The other main difference, which flows from the first point, is that when problems are identified in human rights due diligence of business partners or third parties, the immediate reaction should not be to quarantine the enterprise from exposure, but rather, to first try to use whatever leverage the enterprise might have (which may not always be sufficient if it is acting alone) to try to improve the situation.
Which sector(s) do you think are the most vulnerable to ethical lapses and misconduct?
Certain sectors by their nature entail more risk of harm to people and the environment (like the extractive industries), but many of the larger companies in those sectors have long ago adopted safety cultures and operational risk procedures to deal with that to some extent, whereas far less ‘impactful’ sectors, like farming or light manufacturing can have equally disastrous impacts, be it child or forced labour or environmental impacts from production processes, but have perhaps not yet been able to shift to such rigorous safety and compliance cultures, particularly when one looks deeper into supply chains where raw materials are sourced, processed and/or assembled. One fundamental aspect of the leading framework in this area, the UN Guiding Principles on Business and Human Rights, is that the corporate responsibility to respect human rights applies to ALL business enterprises, regardless of sector, size or ownership structure, so no one should feel they are off the hook (and no sector likely has zero human rights impacts that would be uncovered if they looked).
If you had one message for Ethical Alliance members, what would it be?
Do your human rights due diligence! And if you need external help to get started, seek it out. But the basics are simple: what are the salient human rights risks in your industry? Who are you doing business with (and who are they doing business with)? What are their policies and procedures to address those salient risks? The risks and impacts are likely somewhere, so don’t be complacent.
To read the whitepaper authored by Ariel on ‘Responsible Business Conduct: Understanding Human Rights Due Diligence‘, click here.
If you have questions for any of our Advisory Council members, contact us at firstname.lastname@example.org
Look out for more Advisory Council member interviews in the coming months!