This page presents an introduction to and analysis of the dilemma. It does so through the integration of real-world scenarios and case studies, examination of emerging economy contexts and exploration of the specific business risks posed by the dilemma. It also suggests a range of actions that responsible companies can take in order to manage and mitigate those risks.
The dilemma for responsible business is how to ensure it can apply the highest anti-discrimination standards throughout its operations, so that all of its employees can enjoy an equal level of protection – regardless of their ethnic background or country location.
As noted by the ILO in a 2007 report entitled ‘Equality at Work: Tackling the Challenges’1 discrimination is a global phenomenon that “bars people from some occupations, denies them a job altogether or does not reward them according to their merit because of the colour of skin, sex, or social background”. For the purposes of this dilemma, ‘ethnicity’ is given a broad interpretation to include a range of individual characteristics, including race, language, religion and other differentiators.2
In some regions, diversity and equality laws are so well entrenched that multi-national companies (MNCs) have had a strong incentive to implement detailed policies and procedures to minimise the risk of discrimination against ethnic minorities for a long time. In these areas, prevalent social norms, the presence of internal company safeguards and the threat of legal consequences at an individual level have all helped engender relatively liberal workplace cultures, in which discrimination is less likely in the first place. In such locations, the protection of ethnic minorities is unlikely to be much of a dilemma for business.
Nonetheless, the growing presence of MNCs in certain emerging economies, some of which represent complicated social, political and cultural contexts, raises new challenges in terms of ensuring that all of their employees experience de facto equality. Whilst most companies will have relevant group policies and procedures that prohibit discrimination, the actual implementation of these standards will not always be easy, straightforward or without negative consequences. This may be due to general local conditions, engagement with external parties such as joint venture partners and franchisees, or – by extension – issues within the broader supply chain.
According to the UN Global Compact and UN Alliance of Civilizations, diversity in the workplace is becoming an increasingly important issue for companies, driven by:
In the context of this dilemma, the globalisation of operations (i.e. through the expansion by MNCs into a range of emerging markets where they need to navigate sometimes unfamiliar contexts relating to ethnicity and cultural attitudes) is a particularly important issue.
Nonetheless, this dilemma also poses a challenge for MNCs that have significant numbers of multi-ethnic employees who have relocated from one location to another (i.e. migrant workers and expatriates). As a result, the dilemma goes beyond the simple management of entry into emerging markets.
Documented reports of workplace discrimination against ethnic minorities are predominantly found in countries with well-established and liberal legal regimes. Nonetheless, the dearth of reporting in countries with ‘weaker’ laws and enforcement mechanisms does not mean that this dilemma is irrelevant or that de facto equality among groups has been attained. Indeed, it is often such countries that pose particular risks of discrimination.
According to a report by Human Rights Watch ‘Are You Happy to Cheat US?'6 migrant workers from Central Asia and the Caucasus are frequent victims of discrimination and exploitation in the Russian construction industry. The report indicates that despite the government's policy to liberalise migration and encourage regular working arrangements in Russia, many such migrant workers still face a range of abuses and various forms of exploitation.
Human Rights Watch's research found the most pervasive abuses and forms of exploitation of migrant workers include confiscation of passports; failure to provide employment contracts; non-payment or under payment of wages, or illegal deductions from wages; long working hours; substandard living conditions and denial of food; as well as the use or threats of violence by construction site guards, police, or others.7 Significantly, these workers are often conspicuous ethnic minorities, which can worsen bullying and harassment. This example depicts the way in which dilemmas related to ethnic minorities and migrants can easily become conflated.
In March 2010, the UN Special Rapporteur on the human rights of migrants, Jorge Bustamante expressed concern about the level of racism and discrimination directed against migrant workers following a mandate-related visit to Japan.8 In his report – ‘UN migrants rights expert urges Japan to increase protection of migrants’ - Bustamante pointed out that while Japan started receiving migrant workers 20 years ago, it has yet to adopt a comprehensive immigration policy that provides for the protection of migrants rights and, as a consequence, this group is often poorly integrated into society. He further commented that “racism and discrimination based on nationality are still too common in Japan, including in the workplace, in schools, in health care establishments and housing.”9
According to the report, evidence of this is found in the Industrial Trainees and Technical Interns Programme that “often fuels demand for exploitative cheap labour under conditions that constitute violations of the right to physical and mental health, physical integrity, freedom of expression and movement of foreign trainees and interns, and that in some cases may well amount to slavery.”10 During his trip, the Special Rapporteur heard repeated complaints in relation to open discrimination against migrant workers by their private employers with regard to remuneration, promotion opportunities, and access to health care for accidents in the workplace and threats of unfair dismissal.11
According to a 2007 survey12 of the 500 largest companies in Brazil conducted by Instituto Ethos and the Brazilian Institute of Public Opinion and Statistics (IBOPE), Afro-Brazilians comprise 49.5% of the population and 25.1% of the active workforce.13 In 2007, only 3.5% of economically active Afro-Brazilians held executive positions and 17% were employed at the management level.14 In response to this situation, 92% of companies now report on their policies directed towards the advancement of racial minorities (an increase of 12% in two years) and 22% specifically recruit disadvantaged candidates – including women, Afro-Brazilians and workers over 45 years of age.15 Moreover, 16% of the top 500 companies had professional development plans to improve qualifications and 6% sought to actively promote ethnic minorities.16
Recognising the socioeconomic disparities between Brazilians of European descent and other ethnic minorities such as Afro-Brazilians, the government has undertaken a series of affirmative action initiatives within the education system and the public sector. Similarly, the private sector has increasingly embarked on specific recruitment projects and capacity building in order to make the composition of their businesses reflect the character of society as a whole. In January 2010, statistics indicated that the average monthly compensation for a white male in the six main urban centres in Brazil was R$1.757 (US$992), while the average Afro-Brazilian earned R$908 (US$513).17
1 ILO, Report of the Director-General, Equality at work: Tackling the challenges, Global Report under the follow-up to the ILO Declaration on Fundamental Principles and Rights at Work, 96th Session 2007, http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---webdev/documents/publication/wcms_082607.pdf, at pg. 1.
2 According to the UN Department of Economic and Social Affairs, ethnic groups are identified on a variety of dimensions including ethnic nationality (country or area of origin, as distinct from citizenship or country of legal nationality), race, colour, language, religion, customs of dress or eating, tribe or various combinations of these characteristics. For additional information, see: http://unstats.un.org/unsd/demographic/sconcerns/popchar/popcharmethods.htm. Similarly, the ILO notes that the term “race” or “racism” is often used loosely in regard to linguistic communities or minorities whose identity is based on religious or cultural characteristics, or even on national extraction. Difference of colour is only one of the ethnic characteristics, but it is the most apparent, and is therefore often linked to the ground of race in constitutional or legislative provisions adopted by certain countries to prohibit discrimination. Generally speaking, any discrimination against an ethnic group is considered to be racial discrimination. See ILO: Equality in employment and occupation, Special Survey on Equality in Employment and Occupation in respect of Convention No. 111, Report 111 (Part 4B), International Labour Conference, 83rd Session, Geneva, 1996, paras. 30-31.
3 See a chart on the level of ratifications of Conventions No. 100 and 100 in the following report: ILO, Report of the Director-General, Equality at work: Tackling the challenges, Global Report under the follow-up to the ILO Declaration on Fundamental Principles and Rights at Work, 96th Session 2007, http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---webdev/documents/publication/wcms_082607.pdf, at pg. 8.
4 The ILO notes that provisions on non-discrimination and equality, especially in the industrialised world, are increasingly being adopted or consolidated in the form of a text encompassing different grounds of discrimination (e.g. EU Directives, Australia and the UK). This approach, which is also gaining ground in the UN system, especially in the field of human rights, is based on the acknowledgement that certain individuals may face discrimination on more than one ground. It tries to ensure more coherent support to victims of discrimination, regardless of the ground, and is consistent with the tendency to establish multi-ground or umbrella specialised bodies. See: ILO, Report of the Director-General, Equality at work: Tackling the challenges, Global Report under the follow-up to the ILO Declaration on Fundamental Principles and Rights at Work, 96th Session 2007, http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---webdev/documents/publication/wcms_082607.pdf
5 ibid
6 Human Rights Watch, Are You Happy to Cheat Us? Part 3: Exploitation of Migrant Construction Workers in Russia, 2009, http://www.hrw.org/en/node/80466/section/14
7 ibid
8 OHCHR, UN migrants rights expert urges Japan to increase protection of migrants, 2010, http://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=9950&LangID=E
9 ibid
10 ibid
11 ibid
12 Instituto Ethos and IBOPE, Perfil Social, Racial e de Genero das 500 Maiores Empresas do Brasil e Suas Acoes Afirmativas, 2007, http://www1.ethos.org.br/EthosWeb/pt/295/aprenda_mais/publicacoes/publicacoes.aspx
13 ibid
14 ibid
15 ibid
16 ibid
17 Instituto de economia and Laboratorio de Analises Estatisticas Economias e Sociais das Relacoes Raciais, Tempo Em Curso, Ano II; Vol. 2; No.3, Marco, 2010, http://www.laeser.ie.ufrj.br/tempo_em_curso.asp
Discrimination can stem from both direct and indirect actions by employers:
Companies are likely to face particular challenges in their pursuit of equal treatment among ethnic minorities in the workplace when they operate in contexts characterised by:
18 See: ILO Convention No. 111 on Discrimination (Employment and Occupation) 1958.
19 Additional information on US Affirmative Action regulations can be found at the UN Department of Labor’s Office of Federal Contract Compliance Programs website: http://www.dol.gov/ofccp/regs/compliance/aa.htm
20 CIA, 2010, World Factbook: Turkey, https://www.cia.gov/library/publications/the-world-factbook/geos/tu.html
21 US State Department, Human Rights Reports: China, 2009, http://www.state.gov/g/drl/rls/hrrpt/2009/eap/135989.htm
22 Amnesty International, Country Report: India, 2010, http://thereport.amnesty.org/sites/default/files/AIR2010_AZ_EN.pdf#page=113
In a 2007 report, ‘Equality at Work: Tackling the Challenges’, the ILO notes that ethnic discrimination continues to be an obstinate problem. 23 A “slow decline” is evident in countries that have recently attempted to address the issue (e.g. Brazil and South Africa), but it shows “considerable vitality” in countries that still deny the problem and resilience even in countries that have long recognised it.24 Examples of scenarios companies might face in BRICs and other fast growing emerging economies include the following:
China: Minority Rights Group reports in its ‘China Overview 2009’, that ethnic minority groups experience discrimination, imprisonment and are sometimes subjected to the death penalty on charges of activism.25 The state officially recognises 55 minority nationalities (not a comprehensive number) in addition to the majority Han group. According to Amnesty International’s annual report, ‘The State of the World’s Human Rights 2010’, the Uighurs (an ethnic minority concentrated in the Xinjiang Uyghur Autonomous Region) face religious and linguistic restrictions, discrimination in public sector employment as well as forced displacement.26 Similarly, Amnesty International says Tibetans are disproportionately excluded from lucrative employment opportunities in the public sector. This group also faces restrictions on their freedom of expression and religion.
Russia: Russia is host to a large number of ethnic minorities; a 2002 National Census indicates that minorities such as Tartars, Ukrainians and Chechens comprise 20% of the population.27 Despite a legal ban on discrimination based on nationality, minorities are subject to adverse treatment by government officials as well as societal violence. According to a report from Amnesty International, ’Russian Federation - Amnesty International Report 2008,’in 2008 at least 61 people were killed and at least 369 injured in racially motivated violence including anti-Semitic attacks.28 Incidents are suspected to be chronically under-reported, thus hiding real levels of violence against minorities. People with dark skin or who appear to be from the Caucasus region, Central Asia or Africa are reportedly targeted by police for beatings, harassment and extortion. In an August 2008 report, ‘Consideration of Reports Submitted by States Parties Under Article 9 of the Convention’, the UN Committee on the Elimination of Racial Discrimination expressed concern that ethnic minorities from these locations “continue to be subject to disproportionately frequent identity checks, arrests, detentions and harassment by police and other law enforcement officials.” 29
Iran: Since Mahoud Ahmadinejad became President in 2005, the Iranian government has implemented policies favouring Iran’s majority Persian and Shi’a Muslim identity. According to Minority Rights Group’s ‘Iran Overview 2009’, Iran’s ethnic minorities, including Kurds (7%), Arabs (2%), Azeris (24%), Baluchis (2%) and Turkmens (2%) are, to varying degrees, oppressed by the government.30 Iran’s ethnic minorities complain of economic and political discrimination, especially the provision of economic aid, university admission, acquisition of business licenses and housing and land rights. Human rights groups claim that the Baluch minority face the most serious economic, legal and cultural discrimination. Media coverage of minority rights issues usually results in punishment.31
India: Despite provisions that outlaw discrimination against scheduled castes such as Dalits, intolerance against these groups is reportedly widespread. In its 2007 ‘Concluding Observations on India’s Periodic Report’ submission, the UN Committee on the Elimination of Racial Discrimination noted that Dalit women and men suffer descent-based discrimination in various aspects of their lives (e.g. ‘untouchability’) and are subjected to violence as a result of the caste system.32 Human rights infringements faced by the lowest castes frequently take place with impunity.33 According to the ILO, the scheduled castes are excluded from a wide range of work opportunities in the area of production, processing or sale of food items, domestic work and the provision of certain services in the private and public sectors (e.g. office work).34 In addition, limited access to education, training and resources (such as land or credit) further impair opportunities for access to non-caste-based occupations and decent work.35
Pakistan: According to Minority Rights Group’s ‘Pakistan Overview 2009’, officially recognised ethnic minority groups in Pakistan include Punjabs, Sindhis, Pathtans and Baluchis. 36 Comprising more than 5% of the national population, over half of Baluchis live below the poverty line and their living conditions are described as “abysmal”. Minority Rights Group claims that Baluchis are not fairly compensated for the exploitation of natural resources in their region and that many have died at the hands of security forces in extrajudicial executions and due to harsh treatment in detention. In the Sindh province, Sindhis and Mohajirs allege discrimination in employment and education in favour of Punjabis.37According to Minority Rights Group much of minority group discrimination (especially related to religious minorities) emanates from “the growth of extremism and intolerance within the fabric of society.”38
Brazil: In November 2009, the UN High Commissioner for Human Rights, Navi Pillay, published an article in The Huffington Post (‘Brazil's indigenous and Afro-Brazilian populations face serious discrimination’), in which she said the vast majority of laws and policies aimed at advancing human rights and socio-economic development are not being properly implemented by the government. As a result, minority groups, and Afro-Brazilians in particular, are subjected to serious “discrimination, injustice and violence”. As well as noting that few Afro-Brazilians occupy positions of authority, Pillay pointed out that they are the main victims of violence and represent the majority of incarcerations. Despite an extensive legal framework involving legislation on human rights, gender issues, racial equality and education, Pillay stated that “millions of Afro-Brazilians and indigenous people are mired in poverty and lack access to basic services and employment opportunities.”39
Philippines: There are a large number of minority groups in the Philippines40 (exclusive of indigenous groups) including religious and racial minorities. There is a significant Muslim minority, known collectively as ‘Moros’ and constituting approximately 5% of the population. Moro Muslims are largely under-represented in areas of educational attainment and employment levels across most categories of civil service and political life due to linguistic requirements. Chinese constitute another significant minority group (between 600,000 and 900,000) that lacks political power and reportedly faces resentment to their perceived commercial successes.41 Minority Rights Group reports that Moros and the ethnic Chinese are discriminated against by the majority population, with negative stereotypes being widely propagated by mainstream media.42
Indonesia: The government officially promotes racial and ethnic tolerance. In recent years, the position of some minorities, in particular the Chinese and the Acehnese (the population of Aceh, North Sumatra), has begun to improve. However, according to Minority Rights Group’s ‘Indonesia Overview 2009’, other minorities continue to experience intolerance and discrimination. For instance, Papuans reportedly continue to be under-represented in most employment categories, and this remains particularly true in the provinces of Papua.43 In addition, reportedly, ethnic minorities that also practice non-mainstream religions experience ill-treatment. There are many reports of mob violence and vandalism perpetrated against the Ahmadiyya Muslim community and their places of worship.44
South Korea: While the population is largely homogenous in linguistic and ethnic terms, there is a small Chinese minority of approximately 20,000 people who are largely concentrated in Seoul. Minority Rights Group reports that this group is subject to discrimination in the areas of employment and citizenship, despite many of them having been born in the country.45 An Amnesty International report titled ‘Disposable Labour: Rights of Migrants Workers in South Korea’ documents how migrant workers are often tasked with the use of heavy machinery and dangerous chemicals without sufficient training or protective equipment.46 As a result, the workers are at greater risk of industrial accidents and receive less pay compared to South Korean workers as they are relegated to low skill roles
Turkey: The government has come under pressure from the EU to undertake reforms to improve minority and cultural rights. However, the legal framework and practice are still far from conforming to international standards, as it gives a single nationality designation for all citizens and does not recognise national, racial or ethnic minorities.47 Minority Rights Group reports in its ‘Turkey Overview 2009’ that millions of people belonging to religious, linguistic and ethnic minorities (including Alevis, Ezidis, Assyrians, Kurds, Caferis, Caucasians, Laz and Roma) continue not to be recognised in Turkey and face systemic repression and pressure to assimilate.48 The European Commission notes in its ‘Turkey 2008 Progress Report’ that although some progress has been achieved on cultural rights, restrictions on the use of languages other than Turkish in broadcasting, political life and when accessing public services remain in place.49 These restrictions can have consequences for businesses affiliated with the public sector.
23 ILO, 2007, Report of the Director-General, Equality at Work: Tackling the Challenges, http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---webdev/documents/publication/wcms_082607.pdf
24 ibid
25 Minority Rights Group, China Overview, 2010, http://www.minorityrights.org/?lid=5324
26 Amnesty International, The State of the World’s Human Rights, 2010, http://thereport.amnesty.org/sites/default/files/AIR2010_AZ_EN.pdf#page=51
27 Russian Federation, Federal State Statistics Service, 2002 Census, http://www.gks.ru/wps/portal/!ut/p/.cmd/cs/.ce/7_0_A/.s/7_0_3QA/_th/J_0_9D/_s.7_0_A/7_0_2BD/_me/7_0_2BC-7_0_A/_s.7_0_A/7_0_3QA
28 Amnesty International, Russian Federation: Amnesty International Report 2008, http://www.amnesty.org/en/region/russia/report-2008
29 Committee on the Elimination of Racial Discrimination, Concluding Observations on the Russian Federation, 73rd Session, 28 July – 15 August 2008, http://www2.ohchr.org/english/bodies/cerd/docs/co/CERD.C.RUS.CO.19.pdf
30 Minority Rights Group, Iran Overview, 2009, http://www.minorityrights.org/?lid=5092&tmpl=printpage
31 Amnesty International USA, Iran: Human Rights Abuses against the Baluchi Minority, 2007, http://www.amnestyusa.org/document.php?id=ENGMDE131042007&lang=e
32 Committee on the Elimination of Racial Discrimination, Consideration of Reports Submitted by States Parties Under Article 9 of the Convention: Seventieth Session: India, CERD/C/IND/CO/19
33 ibid
34 ILO Fact Sheet, Discrimination at Work in Asia, http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---declaration/documents/publication/wcms_decl_fs_89_en.pdf
35 ibid
36 Minority Rights Group International, World Directory of Minorities and Indigenous Peoples: Pakistan Overview, http://www.minorityrights.org/5615/pakistan/pakistan-overview.html#current
37 ibid
38 ibid
39 Huffington Post, November 2009, Navi Pillay: Brazil’s indigenous and Afro-Brazilian populations face serious discrimination: http://www.huffingtonpost.com/navi-pillay/brazils-indigenous-and-af_b_362183.html
40 A national census indicated the following population breakdown: Cebuano (20.16 million), Tagalog (13.93 million), Ilocano (9.53 million), Hiligaynon (8.06 million), Central Bicolano (3.5 million), Waray (3.4 million), Kapampangan (2.6 million), Albay Bicolano (2.1 million), Pangasinan (1.6 million), Malay (1.2 million), Maranao (1.09 million), Maguindanao (1.07 million), Tausug (1.02 million), Min Nan Chinese (922,000), Masbateño (764,000).
41 Minority Rights Group International, World Directory of Minorities and Indigenous Peoples: Philippines Overview, http://www.minorityrights.org/3462/philippines/philippines-overview.html#current
42 ibid
43 Minority Rights Group, World Directory of Minorities and Indigenous Peoples: Papuans, 2008, http://www.minorityrights.org/4430/indonesia/indonesia-overview.html#current
44 US State Department, Human Rights Reports: the Philippines, 2009, http://www.state.gov/g/drl/rls/hrrpt/2009/eap/136006.htm
45 Minority Rights Group, World Directory of Minorities and Indigenous Peoples: South Korea, http://www.minorityrights.org/?lid=5575&tmpl=printpage
46 Amnesty International, South Korea: Migrant Workers Treated as ‘Disposable Labour’, 2009, http://www.amnesty.org/en/for-media/press-releases/south-korea-migrant-workers-treated-‘disposable-labour’-20091021
47 US State Department, Human Rights Reports: Turkey, 2009, http://www.state.gov/g/drl/rls/hrrpt/2009/eur/136062.htm
48 Minority Rights Group, World Directory of Minorities and Indigenous Peoples: Turkey, http://www.minorityrights.org/?lid=4387
49 Commission of the European Communities, Turkey 2008 Progress Report, http://ec.europa.eu/enlargement/pdf/press_corner/key-documents/reports_nov_2008/turkey_progress_report_en.pdf
International law
The right to be free from ethnic discrimination can found in several international human rights instruments as it is a part of the core prohibited aspects of discrimination. Several international human rights covenants outlaw discrimination based on race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.50 As with all human rights, it is incumbent on the state to promote and enforce the rights of ethnic minorities. Nonetheless, companies have a duty to respect and support this right as applicable.
Most ratifying states should have relevant national legislation in place implementing the terms of these international legal instruments. This by no means ensures the provision of equal legal protection across all countries.
Domestic law
In certain jurisdictions where there is well established, highly articulated legislation in place prohibiting harassment and ethnic discrimination coupled with strict enforcement, the legal risks are likely to be serious. This is less true of weaker jurisdictions – many of which are in emerging economies or less developed countries – where legal protections are inadequate or poorly enforced.
Nonetheless, it is useful to examine legislation and legal cases from the former jurisdictions in order to identify the higher legal standards that MNCs should aspire to – and which will, over time, become more common in a wider range of jurisdictions.
National legal frameworks in states that have adopted a ‘strong’ legal regime regarding discrimination define a number of traits upon the basis of which discrimination is illegal, consistent with international precepts. In this category, the US has a particularly sophisticated federal anti-discrimination regime enforced by the US Equal Employment Opportunity Commission (EEOC). The relevant legislation is Title VII of the Civil Rights Act of 1964. Whilst clearly not directly applicable to many emerging market scenarios, this legislation nonetheless sets out some important principles, that are likely to be reflected in legislation in a number of countries – if not now, then certainly in the future. The Civil Rights Act prohibits harassment or any other employment action based on:51
Similarly, the UK’s Race Relations Act makes it unlawful for an employer to discriminate against an employee on the grounds of race, which includes colour, nationality, or ethnic or national origins. According to this legislation, an employer must:
In jurisdictions like the UK and US, breaches of non-discrimination legislation can be serious and multifaceted:
As with the US and UK, many emerging markets will have explicit prohibitions against ethnic discrimination within their labour legislation.
For instance:
Some employees working in emerging markets may be able to sue companies in their ‘home’ jurisdictions – depending on the specific circumstances of employment – and infringement (for example, expatriate workers formally employed in one jurisdiction, but temporarily working in another jurisdiction for the same company). In the event that disputes reach the level of formal adjudication, victims of ethnic discrimination might be able to recover remedies that include hiring, promotion and re-instatement. Other penalties can come in the form of sanctions imposed by governments and legal costs and damages levied in the event of an adverse ruling.
Extended litigation can use valuable management time, resulting in considerable operational disruption. In many instances, executives must give lengthy depositions as a part of the adjudication process. In addition, they are also likely to be involved in litigation strategy, including harm mitigation and publicity.
Legal action (particularly if unsuccessful) may result in companies having to implement improvements to their policies and/or human resource management systems – either in order to avoid legal action in future, or because they have been required to do so by a court.
Such revisions can impact productivity as employees take time to familiarise themselves with the modified processes and expectations. An example of this can be found in the independent task force of outside experts that worked with Coca-Cola as a part of their settlement in the case mentioned above.
Even where allegations of complicity do not result in legal action, companies can still face a range of non-legal risks – and reputational risk in particular. If a company is perceived to discriminate against ethnic minorities, it may end up alienating a range of stakeholders including consumers, investors, current employees, prospective employees and civil society members.
This has the potential to result, for example, in:
For example, Sodexo (see above) has numerous websites dedicated to grievances about several features of its operations, including alleged discrimination against ethnic minorities. These campaigns undoubtedly require time and effort spent to counter the claims and present a more positive image to its stakeholders.
As noted by the UN Global Compact and the UN Alliance of Civilizations report, ‘Doing Business in a Multicultural World’,54 “to be successful in an inter-connected world, businesses of all sizes and in every country must be able to compete effectively in diverse, multicultural environments”. Companies that fail to promote ethnically diverse workforces through the provision of strong protection from discrimination may lose out on a range of commercial opportunities – and so compromise their own long-term business performance:
Attracting talent
Without nurturing a diverse and inclusive workplace, it is difficult to attract, retain and motivate the best talent. If a company gains a reputation as being unwelcoming to minorities, candidates may even refrain from applying for employment in the first place. This dynamic can have obvious commercial implications, and can be difficult to reverse.
Catering to diverse customers
When recognising and responding to the diverse and changing needs of customers in the market place, insight from employees with relevant backgrounds is very valuable. A homogenous workplace would have difficulty understanding preferences expressed by different sorts of consumers and this is problematic for companies expanding their presence into emerging markets if their workforce does not have local representatives.
Managing local relationships
According to the UN Global Compact and UN Alliance of Civilisations, managing relationships with government authorities and local communities is an essential factor in the maintenance of a company’s political and social licence to operate.55 As a result, it is helpful to ensure that employees reflect the societies in which they operate, and so have first-hand understanding of local cultures, contexts and concerns – an also demonstrate the opportunities that companies can offer local people.
50 Specifically, this language is found in the International Covenant on Civil and Political Rights, (Art. 2(1) and Art. 18(1)), the International Covenant on Economic, Social and Cultural Rights (Art. 2(2)), the International Covenant on the Elimination of All Forms of Racial Discrimination (Art. 5(vii)); Geneva Convention Relating to the Status of Refugees (Art. 3)) and the Convention on the Rights of the Child (Art. 2)).
51 US EEOC, Employment Discrimination Based on Religion, Ethnicity or Country of Origin, http://www.eeoc.gov/laws/types/fs-relig_ethnic.cfm
52 Cynthia Carter McReynolds, et al. v. Sodexho Marriott Services Inc., No. 01-0510, D. D.C., http://www.lexisnexis.com/litigationspotlight/pdfs/MealeysEmp.pdf
53 Significant EECO Race/Color Cases, http://www.eeoc.gov/eeoc/initiatives/e-race/caselist.cfm
54 UN Global Compact and UN Alliance of Civilizations, 2009, Doing Business in a Multicultural World: challenges and opportunities, http://www.unaoc.org/images//090512_multiculturalism%20report.pdf
55 ibid
The starting point for protecting employees’ rights relevant to this dilemma is adherence to national legislation regarding equality and non-discrimination in the workplace. This is a relatively straightforward exercise in well established legal jurisdictions where obligations are explicit and align with international human rights law. However, in jurisdictions where legislation and enforcement might fall short of international legal standards, companies should aspire to meet these higher standards.
According to the UN’s “Protect, Respect and Remedy”56 policy framework (“the framework”), business has a responsibility to respect all human rights. To meet its responsibility to respect human rights, the framework states that a responsible company should engage in human rights due diligence57 to the level commensurate with the risk of infringements posed by the country context in which a company operates, its own business activities and the relationships associated with those activities.58
The framework also specifies the four main components of the human rights due diligence: a statement of policy articulating the company’s commitment to respect human rights, serving as guidance underpinning specific actions; periodic assessment of actual and potential human rights impacts of company activities and relationships; integration of these commitments into internal control and oversight systems; and tracking and reporting performance.
Companies can seek specific guidance on this and other issues relating to international labour standards from the ILO Helpdesk.59 This aims to help company managers and workers understand the ILO approach to socially responsible labour practices and to assist in the development of good industrial relations. The ILO Helpdesk website also contains detailed factsheets and links to information, resources and frequently asked questions on labour issues, using the ILO Declaration of Principles concerning Multinational Enterprises and Social Policy as the framework. This includes information on decent work principles including the payment of a living wage.
Specific actions that responsible business might take include:60
According to the ILO and UN Global Compact, relevant policies and procedures include the following:
Any such policies should be supported by relevant implementation mechanisms to ensure that their provisions are given real effect. This might include, for example:
Where relevant (for example, entry into new markets, establishment of new operations, major changes to workforce, etc. ) companies can assess the risks posed by a) the ethnic context in which they are operating, and b) the company’s impact on this context. Any such assessment should be proportionate to operational requirements and may range from a ‘quick’ desk-based assessment, to a far more extensive exercise.
In specific reference to ethnic minorities, the UN Global Compact’s ‘Human Rights Translated’ suggests that impact assessments should be geared towards “identify[ing] any long-standing marginalisation of particular ethnic, religious or other groups in the local context of company operations, and consider[ing] appropriate affirmative action policies.”62 Ideally, assessments of this nature will include other participants, such as NGOs, international and local ethnic minority advocacy groups and academic experts.
Depending on the sector and expanse of operations, companies might consider an assessment of their impact on the ethnic minority rights of business partners, suppliers and contractors. In designing an assessment of this kind, a company may wish to consult existing guidance documents, such as the International Finance Corporation, UN Global Compact and International Business Leaders Forum’s ‘Guide to Human Rights Impact Assessment and Management: Road-Testing Draft’. This Guide provides companies with a “process to assess their business risks, enhance their due diligence procedures and effectively manage their human rights challenges.”63
When conducting an assessment, companies may focus on three key issues:
External context
Internal context
Relationships (business partners, entities in supply chain, state/non-state agents)
To the extent that workplace discrimination and harassment often emanates from ignorance, carefully conceived cultural awareness initiatives can reduce the risk of workplace discrimination.64
In every company, managers play a key role in defining company culture. In recognition of this, when Kordsa Global (a supplier of nylon and polyester yarns and cord fabric) expanded operations from Turkey to other parts of Asia, all expatriate and executive managers were enrolled in cross-cultural management training at leading universities in Turkey and Europe. In addition, employee exchange programs were established between the company’s headquarters and subsidiary companies, thereby creating global networks for various processes such as health and safety, sales and operations and human resources.65
Similarly, in order to further workplace tolerance Johnson & Johnson has established a ‘Diversity University’, which provides employees with:
Another approach might entail training sessions dedicated to achieving heightened ‘cultural fluency’ and could include members from civil society and participants from both the public and private sector. For example, Business for Diplomatic Action – a non-partisan, non-profit organisation – offers a CultureSpan workshop that is designed to help executives develop a “global mindset based on a fact-based understanding of cultural similarities and differences.” 66
Affinity groups are voluntary groups consisting of employees sharing a common identity and have the objective of promoting workplace tolerance. The groups are commonly organised along ethnic lines, providing a useful support network to employees of a particular identity. In addition, they are intended to raise awareness and understanding of particular ethnicities, cultures and identities within the general workforce.
Despite these positive objectives, affinity groups need to be approached with care for two key reasons. In the event that there is little interaction between groups, they might actually foment ethnic-based segregation within the workplace. Despite all good intentions, this could galvanise rather than dispel ethnic tensions within the workplace. In addition, if certain groups are declined accreditation for their beliefs, there could be valid charges of discrimination on the part of the company.
Nonetheless, the UN Global Compact and UN Alliance of Civilizations advocate the establishment of such groups in certain contexts, because they can serve as:
Diversity Best Practices - a think tank focusing on multicultural management in the workplace - estimates that 90% of Fortune 500 companies have, or soon will have, employee affinity groups.68
Companies may consider instituting grievance procedures in order to ensure that employees have free and fair access to remedy when they face discrimination as well as other workplace issues.69
At a basic level, this might include formal procedures through which complaints can be pursued through the conventional company hierarchy. Such procedures should ensure that thorough investigations are carried out in response to each complaint. It is advisable that the company clearly communicates that these mechanisms:
Companies may also consider implementing confidential whistle-blowing hotlines operated by third parties. This will provide a higher degree of assurance against retaliation to employees making complaints, and will also offer them an avenue of redress that does not rely on company hierarchy that may be part of the problem in the first place. Companies might, for example, consider the appointment of an ombudsman to oversee the handling of complaints and ensure that impartiality is maintained during the investigation process.
As noted in The Labour Principles of the United Nations Global Compact - A Guide for Business, any such mechanism should take into account formal structures and informal cultural issues that can prevent employees from raising concerns and grievances.
The UN Global Compact’s ‘Human Rights Translated’ document suggests that companies may wish to “engage in employee mentoring, skills training, or sponsoring of programmes to combat discrimination and/or to bolster the career prospects of disadvantaged groups.” 70
In its ‘Good Practice Note on Non-Discrimination and Equal Opportunity’, the IFC notes that while positive discrimination or affirmative action programs can be controversial (and unlawful in particular countries), some interventions can lead to real results and have genuine benefits for the business involved.71
In certain instances, a company might contemplate taking measures to contribute to the local labour pool with a particular emphasis on potential minority applicants. This endeavour would be especially worthwhile in locations where the company envisages long-term investment and anticipates the need to take a proactive approach to achieving workplace diversity.
Companies might consider the utility of the following capacity building initiatives (subject to local legal requirements):
In some cases, there may be official requirements in place relating to capacity building amongst groups who are perceived to have been historically disadvantaged. In South Africa, for example, Broad-Based Black Economic Empowerment (B-BBEE) was launched to redress inequalities originating from the Apartheid era. It does so by giving historically disadvantaged groups (‘black African’, ‘Coloured’, ‘Indian’ and ‘Chinese’ South African citizens), economic opportunities that were previously unavailable.
Under B-BBEE, private companies must adhere to a set of specific codes if they want to do business with any government enterprise or organ of state (e.g. to tender for business, apply for licences and concessions, enter into public-private partnerships or buy state-owned assets etc.).72 For example, any business that turns over more than R35 million (US$4.8 million) a year is evaluated against a ‘B-BBEE scorecard’ that uses seven different measures:73
For example, within this framework (as well as related terms under the South African Mining Charter), AngloGold Ashanti’s Sustainability Review 2009 notes that the company had achieved 39.5 percent Historically Disadvantaged South Africans (excluding white women) in management.74
In some situations, companies might promote a specific code of conduct amongst key business partners (e.g. suppliers and sub-contractors), which addresses the treatment of ethnic groups. If feasible, companies may require compliance by supply chain business partners.75
Where supply chains are too complex for a ‘global’ approach to implementation, efforts can be targeted at first or second tier suppliers in particularly high-risk countries and sectors, so that they are required to uphold relevant company standards.
Code of conduct action items might include:
When developing a code of conduct, companies might consult suppliers in order to establish realistic boundaries and expectations. Likewise, companies’ local managers will have specific insights that put them in a position to understand what is possible in their operational setting, so their input might be valuable.
In 2007 Walmart added ‘diversity’ as a specific criterion to the list of what the company expects from its major suppliers. The Supplier Diversity Program, encompassing Walmart’s 2,500 suppliers, has expanded “an initial $2 million in 1994 to nearly $9.2 billion in 2009”.76 For example, Walmart’s legal department, which was composed of 37% ethnic minorities in 2007, insists that the outside law firms used by the company have a diverse work force. In line with these expectations, Walmart has stopped patronising a number of law firms that failed to meet its diversity requirements.
According to the 2010 Sustainability Report of South African brewing company SABMiller, the company has expanded its expenditure on B-BBEE suppliers from just over 20% in 2006 to more than 55% in 2010.77 As with internal capacity building, the promotion of diversity within procurement can be subject to official requirements. B-BBEE in South Africa (see above), includes criteria requiring companies to procure from recognised B-BBEE suppliers as part of their overall qualification.
56 Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, 7 April 2008, Protect, Respect and Remedy: a Framework for Business and Human Rights, http://www.reports-and-materials.org/Ruggie-report-7-Apr-2008.pdf
57 According to the Special Representative of the Secretary-General on the issue of human rights and transnational corporations, human rights due diligence is “a process whereby companies not only ensure compliance with national laws but also manage the risk of human rights harm with a view to avoiding it.” See: UN Special Representative, 7 April 2008, Protect, Respect and Remedy: a Framework for Business and Human Rights, http://www.reports-and-materials.org/Ruggie-report-7-Apr-2008.pdf
58 UN Special Representative, 7 April 2008, Protect, Respect and Remedy: a Framework for Business and Human Rights, para. 57, http://www.reports-and-materials.org/Ruggie-report-7-Apr-2008.pdf
59 ILO Helpdesk for business on international labour standards, http://www.ilo.org/global/Themes/Decentwork/lang--en/WCMS_120642/index.htm
60 Suggested actions are for guidance only. Depending on the circumstances, these may not be relevant to all companies. The suggested actions may be adopted and adapted in certain regions/sectors/contexts where risks are known to be greatest. The adoption of these actions will also be dependent on the company’s existing policies, resources and procedures, as well as the cost-benefit of undertaking these actions, which indeed might be the root cause of the dilemma itself. The aim of the Forum is to encourage business, trade unions, civil society and other stakeholders to engage on the dilemma topic, to augment the suggestions and to provide additional insight and case examples.
61ILO and UN Global Compact, 2008, The Labour Principles of the UN Global Compact: A Guide for Business, http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/instructionalmaterial/wcms_101246.pdf
62 UN Global Compact et al, 2008, Human Rights Translated – A Business Reference Guide, http://human-rights.unglobalcompact.org/doc/human_rights_translated.pdf
63 IFC, UNGC and IBLF, Guide to Human Rights Impact Assessment and Management 2007, http://www.ifc.org/ifcext/sustainability.nsf/AttachmentsByTitle/ref_SocialResponsibility_HRIA_FAQ/$FILE/HRIAfaqEnglish.pdf
64 See ILO Helpdesk for business on international labour standards, http://www.ilo.org/global/Themes/Decentwork/lang--en/WCMS_120642/index.htm
65 UN Alliance of Civilisations, 2009, Doing Business in a Multicultural World: Challenges and Opportunities, http://www.unaoc.org/images//090512_multiculturalism%20report.pdf
66 ibid
67 UN Global Compact and UN Alliance of Civilizations, 2009, Doing Business in a Multicultural World: challenges and opportunities, http://www.unaoc.org/images//090512_multiculturalism%20report.pdf
68 State Magazine, 2009, Department’s Hidden Treasure: Employee Affinity Groups, http://business.highbeam.com/436203/article-1G1-198291258/department-hidden-treasure-employee-affinity-groups
69 See ILO Helpdesk for business on international labour standards, http://www.ilo.org/global/Themes/Decentwork/lang--en/WCMS_120642/index.htm
70 UN Global Compact et al, 2008, Human Rights Translated – A Business Reference Guide, http://human-rights.unglobalcompact.org/doc/human_rights_translated.pdf
71 IFC, Good Practice Note: Non-Discrimination and Equal Opportunity, 2006, http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/p_NonDiscrimination/$FILE/NonDiscrimination.pdf
72 SouthAfrica.info, Black Economic Empowerment: http://www.southafrica.info/business/trends/empowerment/bee.htm
73 BEE Generic Scorecard, http://www.bbbee.com/files/GENERIC%20SCORECARD.pdf
74 AngloGold Ashanti, 2009, Sustainability Review, http://www.anglogold.com/subwebs/informationforinvestors/reports09/SustainabilityReview09/people.htm
75 UN Global Compact et al, 2008, Human Rights Translated – A Business Reference Guide, http://human-rights.unglobalcompact.org/doc/human_rights_translated.pdf
76 Walmart, Supplier Diversity Overview, https://walmartstores.com/Diversity/253.aspx
77 SABMiller, 2010, Sustainable Development Report, http://www.sabmiller.com/files/reports/2010_SD_report.pdf
The link between ‘race’ and ‘ethnicity’ is supported by Article 1 of the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD), which notes that for the purposes of the convention: “the term ‘racial discrimination’ shall apply to any distinction, exclusion, restriction or preference based on race, colour, descent, or national or ethnic origin”.78 Similarly, the ILO notes in its report, Equality at Work: Tackling the Challenges, “generally speaking, any discrimination against an ethnic group is considered to be racial discrimination.”79
There is no internationally agreed definition of which groups constitute minorities, mainly due to the variety of situations in which they live (e.g. geographically concentrated or not, with a strong sense of collective identity/or a well-remembered or recorded history, or not etc).
Nevertheless, the most commonly used description of a minority by the UN can be summed up as a non-dominant group of individuals who share certain national, ethnic, religious or linguistic characteristics which are different from those of the majority population. Article 27 of the International Covenant on Civil and Political Rights (ICCPR) notes, for example, that: “In those States in which ethnic, religious or linguistic minorities exist, persons belonging to such minorities shall not be denied the right, in community with the other members of their group, to enjoy their own culture, to profess and practise their own religion, or to use their own language.” Examples of ethnic minorities include the Kurds in Iran and Turkey, Brazilians of African descent and Chinese in South Korea.
In rare instances, an ethnic group that has a numerical majority might be subjected to inferior treatment (e.g. the black population in Apartheid South Africa). In such cases the ‘majority’ can, in effect, be considered a ‘minority’ for the purposes of discrimination due to their relative lack of empowerment.
The ILO has adopted the Convention Concerning Discrimination in Respect of Employment and Occupation (No. 111) (1958), which defines discrimination in the following terms:80
The prohibition on discrimination found in a variety of international human rights treaties81 is widely regarded to have jus cogens status – a peremptory legal norm accepted by the international community from which no derogation (deviation) is ever permitted.
Article 2 of both the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR) reads “The States Parties to the present Covenant undertake to guarantee that the rights enunciated in the present Covenant will be exercised without discrimination of any kind as to race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.”
In both cases, Article 2 acts as a sort of umbrella and frames the remaining rights in the treaty. Thus, for instance, articles in the ICESCR related to the equal, just and favourable conditions of work (Article 7) must be adhered to with non-discrimination obligations in mind.
The Draft UN Principles and Guidelines for the Effective Elimination of Discrimination Based on Work and Descent is a new ‘soft law’ instrument establishing principles and guidelines that can be the foundation of anti-discrimination legislation and policy measures dealing specifically with work and descent.82 The scope of the principles extends to a wide variety of both state and non-state actors (including business and civil society) and covers the following areas:
Although the current legal status of this text is non-binding, it is likely that further multi-lateral negotiations will take place with a view to solidifying the content into a convention alongside the likes of the ICCPR and ICESCR.
Maplecroft’s Minority Rights Index 2012 measures the risk of complicity in violations committed against minority groups, including discrimination, violence and barriers to enjoying full societal participation. The ways in which these sorts of infringements can impact business activity includes: dealing with suppliers whose status quo tendencies include limiting and homogenizing the pool of labourers, and animosity among employees in the workplace and directed towards certain employees outside the workplace.83
According to the Index 2012, the 10 highest risk countries on the Minority Rights Index (all of which are ranked as ‘extreme’) are:
Figure 1: BRICs and N11 Scores on Maplecroft’s Minority Rights Index 2012
|
Iran |
China |
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Pakistan |
Russia |
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India |
Bangladesh |
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Mexico |
Turkey |
|
Brazil |
South Africa |
Figure 2: Maplecroft –BRICs and N11 Scores on Minority Rights Index 2012
Right to equality before the law, equal protection of the law and non-discrimination (ICCPR, Article 26): Discrimination and marginalisation, as well as an absence of suitable work-based grievance mechanisms may hinder ethnic minority workers from seeking remedies for human and labour rights violations. The legal status of ethnic minorities may also impact on their ability to seek remedies for infringements on their rights. For example, undocumented migrant workers that are also members of an ethnic minority group may be fearful of filing grievances with local authorities because their visa status makes them candidates for deportation.
Right to freedom of association (ICCPR, Article 22): This type of discrimination may be overt or indirect; a lack of materials available in languages or dialects spoken by ethnic minorities will have the effect of impairing collective bargaining options. In some countries, members of ethnic minority groups may be barred from joining workers’ organisations. In Jordan, for example, non-citizens are not allowed to join trade unions.
Right to enjoy just and favourable conditions of work (ICESCR, Article 7): Elements of this right include equal remuneration for work of equal value, safe and healthy living conditions and the provision of rest, leisure and reasonable limits on working hours. In states where ethnic minorities are not accorded equal treatment under the law, ethnic minority workers might be relegated to dangerous and/or low paying jobs with unequal employment terms.
Right to freedom of religion (ICCPR, Article 18): In some cases, ethnic minorities might have religious or cultural attributes that set them apart. Particular religions have practices or aspects of expression related, for example, to prayer, grooming habits, attire or food. In contexts where minorities are subject to discrimination, such religious requirements are unlikely to be reasonably accommodated by employers.
78 UN International Convention on the Elimination of All Forms of Racial Discrimination, opened for signature 21 December 1965, entered into force 4 January 1969, http://www2.ohchr.org/english/law/cerd.htm
79 ILO, Report of the Director-General, Equality at work: Tackling the challenges, Global Report under the follow-up to the ILO Declaration on Fundamental Principles and Rights at Work, 96th Session 2007, http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---webdev/documents/publication/wcms_082607.pdf
80 In its literature regarding discrimination in the workplace, the ILO also cites the Equal Remuneration Convention No. 100 (1951) alongside Convention No. 111. Given that the former convention deals specifically with equal pay between genders, it is not going to be addressed in full here.
81 Specifically, the right to non-discrimination based on a variety of attributes is found in the International Covenant on Civil and Political Rights, (Art. 2(1) and Art. 18(1)), the International Covenant on Economic, Social and Cultural Rights (Art. 2(2)), the International Covenant on the Elimination of All Forms of Racial Discrimination (Art. 5(vii)); Geneva Convention Relating to the Status of Refugees (Art. 3)) and the Convention on the Rights of the Child (Art. 2)).
82 According to the Draft Principles, discrimination based on work and descent is “any distinction, exclusion, restriction or preference based on inherited status such as caste, including present or ancestral occupation, family, community or social origin, name, birth place, place of residence, dialect and accent that has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of human rights and fundamental freedoms in the political, economic, social or cultural, or any other field of public life.”
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