Mitch Zuklie:

Hi, this is Mitch. Today we observe Human Rights Day globally in commemoration of the anniversary of the adoption by the UNGeneral Assembly of the Universal Declaration of Human Rights on December 10, 1948. Human rights are of equal importance 70+ years later, as globalization and a changing geopolitical climate, mass migration and the acceleration of tech innovation are shining sunlight on existing areas of concern and raising all kinds of novel questions. Alongside these changes is the emergence of what has become known as the political corporation: the growing expectation from consumers, business partners and investors that companies take a stand on key issues and adopt transparent and sustainable business practices.

To help our clients respond to this fast-changing area, Orrick has launched a Business and Human Rights practice, and I’m talking today with the two leaders of that practice: James Hargrove, a dispute resolution partner in London and Geneva who has advised numerous global companies on human rights compliance, and Betsy Popken, special counsel in San Francisco, who, in addition to her private practice, has done some extraordinary work on human rights law with international peace negotiators in both Darfur and Syria.

James, first a question for you: It’s a natural day to be thinking about the intersection of business and human rights, which is an area emergent in the law. But it may be new to many as a concept. Can you start by helping us define that?

James Hargrove:

Yes, thanks Mitch. So, the starting point is this: Business and human rights is essentially, as you say, the intersection between business activities on one hand and the impact on human rights, and the soft and hard law obligations on companies doing business.

On the soft law side, the UN Guiding Principles on Business and Human Rights, which were endorsed by the UN Human Rights Council in 2011, made clear that companies had a responsibility to respect human rights, meaning they should avoid infringing on individual human rights and address any adverse impacts. In practice, this means that companies must have (1) a human rights policy, (2)conduct human rights due diligence, and (3) remediate any adverse impacts of their activities. The Guiding Principles are soft law, but many companies have adopted them voluntarily.

In addition to that, we have hard law regulations on certain human rights issues, and they’re increasing in jurisdictions around the world. We can see this with the increase in regulations on human trafficking, modern slavery issues, conflict minerals, child labor in the cotton industry and, for example, the gig economy, among many others. We can also track increased conversations in capitals around the world on how to regulate AI, for example social media content, in a way that’s consistent with human rights and ethics norms.

Of course, the human rights that we’re referring to refers to any of the universally recognized human rights in international legal instruments like the Universal Declaration on Human Rights, which has been codified elsewhere, and the eightILO core conventions. And these are essentially formulations of the basic and essential human rights that we are all familiar with.

And so, where does this fit? Well, for instance, a technology company may face issues relating to, and including, freedom of expression—making decisions about how to moderate content; they may face issues in relation to the right to privacy when making decisions about how to use consumer data, including perhaps freedom from discrimination when building out AI algorithms; fair labor when determining how to treat gig workers; and, for example, the right to life and freedom from torture when determining where to source materials like cobalt used in hardware products.

Mitch:

Thank you, James. Betsy, what are the key developments in business and human rights in the past year that companies should be aware of?

Betsy Popken:

In the past year, there has been a rise in regulation and regulatory discussions surrounding certain human rights issues. One of the really hot issues this year has been how to ensure that artificial intelligence aligns with ethical and human rights standards. In April, the European Commission’s high-level expert group on AI presented the Ethics Guidelines for Trustworthy Artificial Intelligence, and those were underpinned by international human rights law principles. Then in May, the Council of Europe Commissioner for Human Rights published a 10-point recommendation on AI and human rights, and companies have now begun consultations with the Council of Europe and governments on an AI legal framework in Europe. In the U.S., the Algorithmic Accountability Act has been proposed, which would require companies to study and fix computer algorithms that result in unfair, biased or discriminatory practices, and this is really just the tip of the iceberg for AI and human rights.

Another hot topic this year with growing regulation was how to protect the rights of gig workers. While companies that rely upon gig workers sought to beat the regulations by promising things like fair and transparent wages, and new avenues for workers to exercise their freedom of assembly and association, that didn’t always prevent the laws from coming. In California, as I’m sure you’re aware, the controversial AB5 was passed, which means that beginning next year, if the law still stands, many gig workers will be classified as employees and therefore entitled to benefits like minimum wage, worker’s comp and paid leave. And in the EU, the European Parliament approved new rules that set minimum rates for gig workers and demand increased transparency. There appears to be general agreement to protect the human rights of gig workers; the hotly debated question this year has been how.

Lastly, a growing body of law continues to combat modern slavery. Modern slavery includes things like forced labor, debt bondage, human trafficking, child slavery, and forced and early marriage. And this year, Australia’s Modern Slavery Act went into effect, which requires larger companies to report on the steps they take to respond to the risk of modern slavery in their operations and supply chains. This, of course, follows similar laws in California and the UK, with the California Transparency in Supply Chain Act and the UK Modern Slavery Act, which have now been around for a few years.

Mitch:

So, obviously a massive amount of activity, much of it nascent. If you were to give one tip for companies who are getting started on human rights best practices and compliance, what would it be, James?

James:

Well, it can certainly be intimidating to start from scratch in relation to a human rights policy and practice, but my number one tip is you’ve got to start somewhere—just talking about human rights isn’t enough. There are two ways you can make that first step: The first is conducting what we call a human rights impact assessment, which is a process aiming at identifying a company’s pertinent human rights risks, and the scale and severity of that impact. If the client doesn’t have internal expertise, they should reach out externally, which many companies do. If they’ve done that, then the next step is that it’s really not enough to identify just the human rights risks themselves—they’ve also got to be monitored, and there needs to be a policy and process for monitoring them. The easiest way to do that is by incorporating a human rights-related due diligence process into existing company compliance processes.

Mitch:

What about corporate practices? Have any companies taken actions that you particularly admire, Betsy?

Betsy:

Yes. In the tech space, we have seen a growth in institutionalizing human rights at companies over the last year. For instance, Salesforce created an office of Ethical and Humane Use of Technology this year to ensure that the company develops and uses its products in a way that upholds basic human rights standards. Both Facebook and Twitter hired human rights directors this year to help guide the companies through difficult decisions relating to freedom of expression and the right to privacy, among others. And Workday and Microsoft are two companies setting the pace for the responsible development of AI. Additionally, James mentioned earlier the UN Guiding Principles on Business and Human Rights, and we have seen a growing number of companies that are committing themselves to the UN Guiding Principles.

Mitch:

Thank you. So, there’s a number of commentators, starting with Ben Heineman almost a decade ago, saying that there’s a rising expectation that corporations would take a stand on important social issues—climate change, diversity and inclusion, immigration, gun control, human rights—that may might not be tied to the company’s core focus. And CEOs are increasingly becoming the mouthpiece for this. How should GCs and companies more broadly be thinking about that responsibility?

James:

It’s certainly a huge trend, and it’s a very positive trend, in my opinion. And the majority of people, consumers and the population, agree. As an example, in relation to climate change, there was a 2018 study by Edelman that found that 64% of consumers globally think, and I quote, “CEOs should take the lead on climate change, rather than wait for the government to interpose it.” And that was a 13‑point jump up from 2017.

Going back to specific human rights issues, this will be the year we saw CEOs take a stand on a number of issues like, for example, labor rights. Before AB5, which Betsy mentioned, was passed in California, the CEOs of both Lyft and Uber voluntarily banded together to suggest their own labor protections for their gig economy drivers. And, for example, in relation to the right to life, Walmart ended handgun ammunition sales and asked consumers not to carry guns into their stores.

In fact, in August 181CEOs redefined the purpose of a corporation to include: 1) delivering value to customers; 2) investing in employees; 3) dealing fairly and ethically with suppliers; and 4) supporting the communities in which the company works, in addition to generating a long-term value for shareholders. So this is part of a much bigger trend, and if companies are going to take the lead on human rights issues, it’s important they get their house in order like I described before.

Mitch:

So you guys have described an enormous amount of activity that’s happened in 2019. As you look ahead in 2020, what do you predict the year will bring?

Betsy:

I predict that the human rights impacts of facial recognition technology will continue to be a growing concern into 2020, particularly when sold to state and other actors that can use the technology to violate privacy and other rights like freedom of expression and assembly.

I also predict that disinformation will be a growing threat to human rights next year. While freedom of expression and opinion must be upheld, in the most extreme circumstances disinformation campaigns have led to violations of personal security in many parts of the world, including Myanmar and India. The impact of disinformation and, in particular, deepfakes is also a big concern in the lead-up to the 2020 presidential elections in the U.S. next year.

This year, we also saw a number of countries dominate the human rights conversation for companies: China, Saudi Arabia and Myanmar, among others. In the coming year, we will likely see China continue to dominate the conversation, both because of its human rights record as well as its leading role in the tech space.

Mitch:

Betsy, earlier we heard James describe his number one tip for companies getting started thinking about best practices and compliance: What’s your sense of what employees at companies who are just beginning to build human rights or ethics infrastructure should focus on?

Betsy:

I completely agree with James in that you have to get started somewhere with conducting a human rights impact assessment. I have five key recommendations:

1. The first would be getting support from the top. Companies that are the most successful in building a human rights or ethics infrastructure have buy-in from the company’s executives. So that’s number one.
2. Number two would be resources, resources, resources. This means ensuring that you have both the human capital as well as the financial capital to integrate human rights throughout the company.
3. The third, which carries on to this, is designating or hiring a person or a team. That’s the human capital. It’s very difficult for someone to do this as just one of their many job functions, so make sure someone or a team of people with the right expertise has the time to do this effectively.
4. The fourth, although I recommend designating a person or team, it’s important to work cross-functionally and within the existing infrastructure of the company. The most successful human rights programs have buy in from other teams within the company and can integrate human rights into existing policies and due diligence and compliance processes.
5. Lastly, learn from others. While building human rights and ethics infrastructures within companies is now really picking up steam, there are some companies who have been doing this for years. Meet the people at these companies and learn from them. While every company is certainly different in terms of the human rights issues they face, there’s no need to reinvent the wheel each time.

Mitch:

Incredibly helpful. James and Betsy, thank you for sharing your thoughts on this podcast. Highly informative. And also, thank you for your leadership in launching the Business and Human Rights practice here. I know it’s an area of emergent law of enormous interest outside of Orrick in an area where we are thought leaders, so thank you for everything you guys have done on behalf of Orrick and our clients. It’s greatly appreciated.