During the last few weeks, Sweden has become the epicentre of a discussion on the role of the state, business and human rights. After several other escalating steps, Foreign Minister Margot Wallström’s criticism of the human rights situation in Saudi Arabia was followed by the middle eastern country temporarily recalling its ambassador and refusing Swedish citizens business visas.
With an export of $1.3 billion to Saudi Arabia last year, important actors within Sweden's business community remain deeply worried about the financial impact of the political feud. On March 6th, 31 Swedish business leaders published a statement saying that "Sweden's reputation as a trade and business partner is at stake”.
But what these companies fail to recognize is that the real danger does not come from the Minister of Foreign Affairs criticizing another country, but from businesses not being aware of the true scope of their own responsibilities.
Over the last few years a considerable number of Swedish companies have been scrutinized by the media for unethical or even unlawful behavior. From corruption on the plains of Uzbekistan to land grabbing in Ethiopia. From using child labour in the production chain to mining conflict minerals for our smartphones. From destroying ecosystems in Brazil, to disrespecting Sami rights in Jokkmokk. Time and time again civil society and media find possible human rights violations linked to Sweden, Swedish companies and Swedish products.
These examples beg the question that many companies have not yet answered: How far should corporate responsibility go when it comes to human rights?
Since 2011 a new doctrine has evolved within the framework of the UN, which is spearheaded by the UN’s Guiding Principles on Business and Human Rights.
According to these principles companies should:
(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.
Companies should be aware that this means a large extension of their corporate responsibility. No longer can companies dodge the proverbial bullet by using contracts that outsource responsibility with suppliers, subcontractors or others down the supply chain. The simple fact of ‘being linked to’ is now enough to impose a duty of prevention and mitigation of effects. Even if a company has not contributed to the human rights breach themselves, they still bear the torch of responsibility by virtue of association.
This doesn't make it easy for companies.
When a Swedish company operates in Saudi Arabia, it is faced with one of the most challenging human rights dilemmas; what should we do when the state we operate in not only goes below human rights standards, but actually requires and sanctions us to breach human rights standards in order for us to do business?
It is not easy, but the UN Guiding Principles do not let companies off the hook by referring to 'the letter of domestic law'. If they want to do business in that country at all, companies must strive to honour the spirit of human rights.
In today's world, social media can change a story into a scandal before the company even knows what’s going on. "What did you know? Why didn’t you know? Shouldn't you have known?" are just some of the questions likely to be asked.
Activists are pushing procedural and legal boundaries in Sweden. What is only a principle today, can become a law tomorrow.
But why wait for tomorrow?
In the 21st century owners demand accountability, investors demand transparency and clients simply want to be sure that what they buy is produced in an ethical way. As the business case for respecting human rights becomes clearer every day, it is time for all companies to recognize that it is not Margot Wallström causing the damage, but their own inability to respond to a rapidly changing world.
When businesses fail to take human rights into account it is the market that will make them pay. And that price will be much higher than the cost of a business visa.
Ruben Brunsveld is a business and human rights advisor at at Enact Sustainable Strategies, a consultancy company focusing on responsible business
Ruben Brunsfeld. Photo: Private