Compelling businesses to safeguard human rights – 23 Sep 2022

Consumers in Pakistan should exercise their purchasing power to nudge businesses to respect human rights & environment

Businesses, big and small, are primarily motivated by the desire to maximise profits for entrepreneurs and for their shareholders. While higher tiers of management are well rewarded for efficiency and the ability to deliver profits, workers who are vital to the production of goods and provision of services don’t get to enjoy the fruit of their labour.

While labour gets paid modest wages generally, labour exploitation is rife in lower rungs of the supply chain, such as in the informal sector where much of the economic activity takes place in poorer countries like Pakistan. The informal sector provides employment and skill building opportunities to millions of Pakistanis. Yet, ensuring worker rights in a sector which is neither documented nor regulated is very elusive.

In fact, protecting labour rights, ensuring occupational health and safety, and preventing gender discrimination remain a challenge even within the formal sector. In addition to providing taxes, the formal sector is meant to be regulated to ensure that workers are treated fairly, and increasingly to alleviate environmental degradation. However, the inspection mechanisms in a country like ours leave much to be desired. Provincial labour departments are unable to ensure compliance with existing laws. Labour inspections are also infrequent and often superficial.

Corruption, inefficiency and the lack of adequate resources within the labour department, and the public sector more generally, is only one side of the problem. The other aspect of this problem, which gets even lesser attention, is the desperation of cash-starved countries to entice local and international manufacturers to invest in the economy, which often occurs by allowing regulatory mechanisms to remain lax instead of making them more vigilant.

In countries where the informal sector comprises a major proportion of the economy, labour rights need to be extended to all workers, not just those in the formal sector. There is an intrinsic connection between the formal and informal sector. In the garment industry, for example, the need to respect workers’ rights should not end at the factory gate. Basic labour and human rights need to be extended to the cotton fields where poor sharecroppers and daily waged agri-workers toil to produce cotton used by factories to make garments. Dyeing and many other processes of garment production are also subcontracted to the informal sector where there is no regulation. The same is true for many other industries which produce goods by the joint efforts of workers in the formal and informal sectors.

International agencies like the WTO, the World Bank, and the UN system need to increase pressure on multinational corporations to ensure labour and environmental standards in their supply chains or else the so-called race to the ‘bottom of the barrel’ will continue amongst poor countries desperate to attract FDI.

With assistance from UNDP, Pakistan has recently formulated an action plan on business and human rights. This plan will have to contend with complex ground realities and evolve over time to prevent human rights violations resulting from varied business activities. Taking adequate remedial measures in cases where such violations are found will be a major challenge as well. Civil society and the media can help operationalise this ambitious action plan by creating awareness about it, and by highlighting instances where violations are found.

The public at large has a vital role to play in holding businesses accountable for respecting the basic rights of their workers, and for paying heed to the environment. Ordinary customers in Pakistan also need to know they can exert vital influence on businesses — by exercising their purchasing power by rewarding or penalising businesses based on their evident treatment of workers or due to their environmental record. This sort of consumer pressure has compelled businesses to become more labour friendly and sustainable in the West, and it is high time that consumers became savvy enough to compel businesses to do the same in countries like our own.

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