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Standard Life issues report on business and human rights in extractive industries

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Standard Life Investments, the global fund manager, has issued a report entitled Business and Human Rights which reviews the implementation in the extractives sector of the key aspects of Professor John Ruggie’s Guiding Principles for Business and Human Rights.

Endorsed by the United Nations Human Rights Council in June 2011, the Guiding Principles have gained extensive support and constitute the first widespread multi stakeholder agreement on benchmarks for corporate conduct on human rights.

The research by Standard Life Investments sought to understand the extent to which the key requirements of the Guiding Principles for Business and Human Rights (GPs) have already been incorporated into company policy and practice by looking at a sample of extractive companies who, as a sector, have had the most experience in complex human rights issues.

Even at the largest extractive companies which have a long history of reporting on social and environmental issues, reporting on human rights issues is often not indicative of actual practice.

The human rights policies of the largest extractive companies demonstrate a high level of alignment with the requirements set out in the GPs.

The biggest gaps between current company practice and the GP standards are on due diligence. None of the companies in the sample published information showing their practices on due diligence are aligned with all five of the requirements set out in the GPs. Taking into account additional information provided by companies in correspondence, only half have incorporated four out of five requirements.

While more than three quarters of companies have incorporated the grievance mechanisms specific in the GPs, only just over one third do so regularly throughout their operations.

Commenting on the findings, Julie McDowell (pictured), Head of Sustainable and Responsible Investment at Standard Life Investments, says: “While the human rights policies of the largest extractive companies demonstrate a high level of alignment with the requirements set out in the GPs, there are clear gaps at most companies on due diligence and grievance mechanisms. Our findings support the conclusion that the GPs are much more than a consolidation of existing best practice. They constitute a new set of standards for corporate conduct that will require significant change to current practice. Because our study focused on the companies likely to have the highest standards, we expect that companies outside the extractive industries will face even bigger challenges in moving to align their procedures with the GPs.”
 

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