London | Wednesday
AMNESTY International has warned multinational companies that they faced major damage to their finances and reputation by becoming entangled in human rights violations abroad.
The Prince of Wales International Business Leaders Forum, a non-profit organisation, joined forces with the human rights watchdog to produce seven mini-reports outlining geographical areas and financial sectors where abuses exist and where multinational companies are at risk of being associated.
”Many companies still have a blind spot when it comes to human rights,” Peter Frankental, manager of Amnesty’s Business Group, told a press conference in London, adding that the report was not intended to find companies innocent or guilty of abuses.
”Business has to decide whether to promise human rights or whether it is part of the problem,” said Robert Davies, chief executive of the Prince of Wales forum.
”It has to develop open, transparent practices or risk significant costs and damage to corporate reputation,” he added.
The reports, conducted between June and mid-September 2001, said ”the extent to which a particular company is exposed to risk depends on where the company operates and the types of activity in which it engages,” including bribery and corruption.
”Companies cannot be neutral in areas of conflict because their presence will contribute to that conflict,” said Frankental.
The report on the extractive sector said oil giants Shell and BP ”suffered reputational damage (in Nigeria and Colombia respectively) because of the alleged impact of their security arrangements on local communities.”
The study’s authors focused their research on six further financial sectors, comprising food and beverages, pharmaceutical and chemical, infrastructure and utilities, heavy manufacturing and defence, and IT hardware and telecommunications.
It covered 35 countries with poor human rights records and where 129 prominent European and North American companies are based.
Countries accused of breaching human rights, along with Nigeria and Colombia, include Pakistan, India, Philippines and Ghana — which are all accused of sanctioning bonded child labour.
Meanwhile, China, Brazil and Indonesia are said to practice forced labour. Multinationals Coca-Cola, Unilever and Nestle have operations in all nine countries.
Operating in risk areas can lead to litigation, extortion, lost production, sabotage, higher security costs and increased insurance premiums, said the reports. – Sapa-AFP