Unilever opens a can of worms on corporate human rights reporting

August 12, 2015

     By Duncan Green     

This guest post comes from Rachel Wilshaw, Oxfam’s Ethical Trade ManagerRachelWilshaw

Hundreds of millions of people suffer from discrimination in the world of work. 1.3 billion people live in extreme poverty, surviving on less than $1.25 a day. 34 nations present an ‘extreme’ risk of human rights violations. Nearly 21 million people are victims of forced labour.

It’s an unusual opening statement for a corporate report. But then this is the first of a kind, a report from a multinational corporation applying a new method for human rights reporting.

Equally unusual is the case study (on pgs 36 and 37) on sexual harassment in Kenya. Four years ago, Dutch NGO SOMO and the Kenya Human Rights Commission alleged in Certified Unilever Tea: Small cup, Big difference? that women were not safe at Unilever’s tea estate in Kenya. Health and safety has top billing in all company codes. But they meant a different kind of safety: women’s safety from sexual harassment. Unilever, proud of its record as an employer in Kericho, pushed back: its internal processes didn’t find evidence of this, nor did the audits of independent Unilever-logocertifier Rainforest Alliance. In 2013 a documentary by Franco-German TV company ARTE repeated the allegations. Eventually, Unilever acknowledged that it was wrong and the NGO was right and made drastic management changes, increasing the ratio of female leaders from 3% to 40%. It also posted an account of its actions on its website.

The Kericho harassment case illustrates very well why human rights’ reporting represents a significant progressive step. The tools currently relied on to assure compliance to a code or standard are simply too limited to pick up such issues as coerced sex. Why would workers tell an auditor something so sensitive, something that will stigmatise them and could put them out of a job? This means it can be highly prevalent – as is suspected across East African agriculture and beyond – but hidden by power imbalances and social norms. Human rights assurance involves “meaningful consultation with potentially affected groups and other stakeholders”, forcing open a whole can of human rights worms in supply chains. This changes the start point for meaningful action by a company, and requires a whole new mindset and toolset for corporate sustainability.

What Unilever learnt from the Kericho sexual harassment case, which came hard on the heels of Oxfam’s labour rights gap analysis in Vietnam, Labour rights in Unilever’s supply chain: from compliance towards good practice, has now permeated the Unilever Sustainable Living Plan and this report, so that women’s rights are front and centre for workers and smallholders alike. For instance, the report highlights the gap between women’s contribution to agriculture and their control over the assets they need, noting that fewer than “20 per cent of agricultural land holdings in developing countries are operated by women” (opening page and p.43), although they comprise on average 43 per cent of the agricultural labour force in developing countries. The company is now tracking the total number of women farmers in its supply chain and looking at women’s roles in household decision-making, which will help ensure that its sourcing and training strategies take gender roles into account in future. And the report’s open discussion of systemic issues such as discrimination, child labour and forced labour as well as gender-based violence, helps normalise the language and encourages other companies to discuss these reporting taboos.

The report also demonstrates tangible advances in policy and practice relating to issues Oxfam has campaigned on through our Behind the Brands campaign. For example, it states Unilever’s commitment to a zero tolerance for land grabbing, an issue which was firmly put on multinationals’ agenda in 2013 when Behind the Brands launched a targeted campaign on land rights. We look forward to the publication of the land rights policy mentioned. Unilever’s new Responsible Sourcing Policy is another example which represents a welcome shift from a compliance-based to a continuous-improvement based code.

In outlining how the company is managing supply chain risks (on pgs.52 & 53), there are several references to the need for advocacy to governments to provide an effective level playing field, and for cross-sector collaboration, both of which align with Oxfam’s asks of companies.

From better policy to measurable good practice on human rights

Of course, there are areas where we want Unilever and other companies to go further in tackling systemic issues. In can of worms 2relation to workers, who get the most focus in the report, the report is still weak on living wages (preferring the less specific term ‘fair wages’) and on precarious work, a key root cause of disempowerment in workplaces. The report only scratches the surface of the challenges facing smallholder farmers, who need a predictable ‘living income’ as much as workers need secure employment on a ‘living wage’. As the Fair Trade Advocacy Office clearly articulates in its 2014 report Who’s got the power?, a better balance of power in agricultural supply chains is needed to protect small-scale producers from abuse of power and unfair trading practices.

The gaps here suggest the company still does not have a clear narrative for positive social impact; what does ‘do good’ look like? What is a fair share of value, a living wage, a living income, what does Unilever stand for here? How far is it prepared to go ‘give up’ negotiating power in return for shared prosperity in its extended supply chain, that in the longer term ‘does good’? Can it do this in the face of shareholders’ clamour for short term returns, and when its competitors are in the grip of a business culture which is all about maximising profits and pushing ‘hidden costs’ onto society.

One thing that will help is surely to find intelligent ways to measure and report its progress on human rights and social impact, alongside commercial performance, so that shareholders can see the business is delivering long-term and civil society stakeholders can assess its progress.

We look forward to seeing this narrative evolve, but the report is a great start. We hope it catalyses a debate about how multinationals not only avoid doing harm and stay within the law, but also how to factor in the prevalence of worms in their supply chain can, and how to demonstrate that people touched by their business can escape from the poverty traps that are still far too common in factories and on farms around the world.

By carrying out and publishing this report, Unilever shows courage and leadership. But this should be just the beginning: the company needs to dive deeper into its supply chain and address the human rights of its most vulnerable stakeholders: the small-scale producers, women and men who are not directly employed by Unilever, but who supply many of its raw materials. It is by respecting their rights and by strengthening their resilience that Unilever can prove it is a truly fair and sustainable business.