Towards Heightened Corporate Human Rights Due Diligence
By Bonheur Minzoto
Globally, there is evidence of rife human rights abuses, environmental degradation, and the proliferation of conflict linked to the activities of multinational companies. Shell’s oil explorations in the Niger-Delta region of Nigeria and more recently, Total’s activities in Mozambique can attest to this. Such events point to the recognition that while transnational businesses can have positive impacts on peace and development, they can also cause lasting harms and fuel conflicts. The consequential adverse impacts that can be created by business operations thus require companies to respect and prioritise human rights both in their own activities and in their supply chains. To do so, they must undertake human rights due diligence (HRDD).
Conceivably, the concept of HRDD is a process through which a company can identify, prevent, mitigate, and account for how it addresses its adverse human rights impacts. It can be considered the bread and butter of corporate responsibility to respect human rights. As John Ruggie and John Sherman write, “without conducting human rights due diligence, companies can neither know nor show that they respect human rights and, therefore, cannot credibly claim that they do.”
Cognisant of the potential direness of human rights abuses in conflict-affected areas, the UN Guiding Principles on Business and Human Rights (UNGPs) further provides for States to support the respect of human rights by businesses in such settings. The Working Group on business and human rights (Working Group) discusses the provision in-depth in its 2020 annual report, by detailing practical steps and measures that States and business enterprises should take to avoid fuelling human rights abuse and stocking violence. Central to the report is a call for a “heightened action” in conflict-affected regions, noting that the risk of gross human rights abuses in those settings is high.
However, there is no such thing as “heightened action” or “heightened due diligence” in the UNGPs. To lay down its principles, the Working Group applies a proportionality test: “the higher the risk, the more complex the processes. Hence, ‘because the risk of gross human rights abuses is heightened in conflict-affected areas’, action by States and due diligence by businesses should be heightened accordingly”. For businesses, this means “gaining a sound understanding of the two-way interaction between activities and context and acting to minimize negative impacts”, the report further details. As such, they should assess conflict trends and drivers, identify the main actors, and ascertain the extent to which their operations may influence conflict dynamics.
Conflict sensitive business practices must therefore be integrated into standard HRDD procedures. Triggers that can alert a company include armed conflict and kindred sporadic turbulences, the paralysis of states’ institutions, gross human rights violations, and warnings such as sustained signs of militia or paramilitary groups. Furthermore, the more the abuses, the more the impacts to be addressed. Accordingly, when entering or operating in conflict-affected regions, a company may wish to prioritise high-risk circumstances. It may also consider establishing early warning systems and assessing the extent of the fragility of the locality to assist in scoping its conflict sensitivity framework. In this respect, practical steps and measures highlighted in the 2020 report could not be riper. Initiatives such as the United Nations Development Programme conflict diagnostic tools and the Swiss Peace Essential may also provide complementary practical groundings.
The WG’s thematic report is therefore a reminder that companies are not neutral actors, as their operations can inevitably impact on conflict dynamics. Total’s LNG operations in Mozambique can evidence this.
Total operates and owns a 26.5% interest in the Mozambique Liquified Natural Gas (LNG) project. Economically, the project is stunning. According to UN Environment, it is expected to propel Mozambique to the world’s third-largest natural gas exporter, adding $39 billion to the Mozambican economy over the next 20 years and creating over 700,000 jobs by 2035. But there is an ugly side to the ever-biggest LNG financing project in Africa: a massive displacement of the local population, and their subsequent loss of access to cultivated land and fishing grounds. Since 2017, Cabo Delgado, the region where the project is exploited, has witnessed multiple rebellious acts. The conflict took bloodshed to new levels when in March 2021 Islamist insurgents launched a deadly attack in the port town of Palma, near the gas operations. Fuelling the insurgency are, reportedly, high levels of poverty and disputes over access to land and jobs, coupled with the presence of multinational energy companies.
Yet, when Total announced the acquisition of Anadarko’s shareholding in Mozambique LNG in 2019, its prioritising of high-risk circumstances was arguably some way off. In a press release announcing the closing of the deal for a purchase price of $3.9 billion, the company made no mention of the region’s instability and communities’ grievances. Instead, it indicated that the “Mozambique LNG project is largely derisked since almost 90% of the production is already sold through long-term contracts with key LNG buyers in Asia and Europe.” The spotlight was then only on financial gains. It is worth noting that there have been company programmes to assist Mozambicans, e.g., the establishment of a scholarship programme to study in France and the launch of an online course. However, as the Working Group observed in 2015, these are examples of corporate social responsibility, not of how a company can implement its human rights responsibility, much less in conflict-prone regions. Moreover, while Total has sustainability initiatives to assess and manage the impacts and risks of the LNG project, there is room for these initiatives to be complemented by a conflict sensitivity framework and be guided towards peace.
Further development of concern is Total’s exit from the site’s operations. In August 2020, Total signed a (new) Memorandum of Understanding with the Government of Mozambique regarding the security of the project activities. But as insurgent attacks mounted, the company stopped the work in December, before announcing resuming the activities in March 2021. Enabling the resumption was the establishment of a further special security area around the Project zone. But as the conflict escalated, the company, once more, faced a decision to suspend its activities in April. It has since withdrawn all its personnel from the site and has declared force majeure on the project, meaning that the company can no longer perform its contractual obligations.
It is however crucial for a company’s exit from a conflict zone to be responsible. This means, as per the Working Group’s report, identifying and assessing the impacts of disengagement with relevant stakeholders, and developing mitigation strategies. In Myanmar, Total commendably undertook such processes, in light of the country’s harrowing human rights abuses. It issued an open letter, describing the dilemma of whether to pull out of or pursue its operations. In the interest of the local population, reportedly, it decided to continue its gas production, while endeavouring to donate to human rights associations in Myanmar the equivalent of taxes to be paid to the Myanmar government. While the context in Mozambique does not necessarily mirror Myanmar’s, the company’s withdrawal from Palma should have been at minimum informed by the same considerations. Indeed, as reported by Daily Maverick, the company’s abrupt and complete exit can further imperil community security. The contract between the government and the South African private security company Dyck Advisory Group, which ended in April 2021, has not been extended, and the withdrawal of the latter from the project’s site is said to have significantly diminished the capacity operation of the government security forces. Yet, the ability of the government forces to contain insurgents is believed to be an essential condition for Total to resume its operations. In the meantime, the security of the region is at risk, so is the prospect of the $20 billion project and the promised prosperity of Mozambique.
These events provide yet another evidence to the connection between violent conflicts and business activities, attesting to the growing consensus that businesses can serve as both a friend and a foe to peace and development. It is therefore pivotal for businesses to be guided towards positive action for peace. They shall complement their human rights due diligence processes by operating in a conflict-sensitive manner to minimise their adverse impacts.
Bonheur Minzoto
Meet Bonheur, a Congolese postgraduate student on the LLM in International Human Rights Law and Practice programme at the University of York.
He has worked in several private sectors with local and international non-government organisations on issues relating to state and local accountability, access to justice, indigenous people’s rights, children’s rights among many others. He has co-drafted a policy report assessing UNHCR’s engagement with UN Special Procedures as part of his placement at the United Nations High Commissioner for Refugees (UNHCR).
You can connect with him on Linkedin - Bonheur Minzoto