Control Risks Acquires Social Risks and Launches Social Risk Consulting Practice

WASHINGTON--(BUSINESS WIRE)--Control Risks, the international business risk consultancy, announces today the acquisition of Social Risks LLC, a boutique risk management consulting firm, and the launch of Control Risks’ Social Risk Consulting practice to enhance its global risk analysis portfolio.

In an increasingly integrated and transparent global economy, international corporations need a wider understanding of the political risk environment in which they operate and an appreciation of their social footprint, including their impact on the local community and the environment. Control Risks helps clients recognize social, human rights and environmental risks and opportunities to increase economic and social value for shareholders and stakeholders. Including social risk analysis, mitigation management, and human rights impact assessments in key business decisions enables clients to avoid costly problems, engage in mitigation planning and achieve sustainable profits.

“As signatory of the UN Global Compact, Control Risks understands that business interests need to be aligned with universally agreed principles in the areas of human rights, labor standards, the environment and anti-corruption for corporations to succeed,” says Jim Brooks, President & CEO of Control Risks North America, “and we are proud to enhance our global risk analysis portfolio in North America by establishing a Social Risk Consulting practice led by Michael Shtender-Auerbach, the founder and chief executive of Social Risks LLC.”

Social Risks was founded in 2007 to provide a range of research and advisory services for clients in the private, public and nongovernmental sectors. “The establishment of the Social Risk Consulting practice in North America increases Control Risks’ ability to assist corporations with social risk management,” says Michael Shtender-Auerbach, Vice President & National Practice Leader of Control Risks’ Social Risk Consulting. “With enhanced analytical capabilities, crisis communications solutions, and advisory services, Control Risks is uniquely positioned to translate social risks into opportunities and manage the risk exposures inherent in the complex social, political and environmental settings in which our clients operate.”

Notes to Editors

Control Risks is one of the world’s leading global business risk consultancies. As a trusted adviser to almost three quarters of the Fortune Global 500, we enable our clients to succeed in complex and hostile environments. We provide the information, advice and practical support they need to manage the political, security and integrity risks that come with doing business internationally.


Contacts
Control Risks
Sara Bracceschi, 202-449-3359
sara.bracceschi@control-risks.com

Permalink: http://www.businesswire.com/news/home/20091216005675/en

Blogger Risk: Two Week Hiatus

Hi all,

I am taking a couple of weeks off from blogging. I am currently in Tel Aviv awaiting the birth of our first child and I have a lot on my plate. Check back soon.

Cheers,

Michael

Congressional Risk: Senate Leaders Urge Tech Industry to Join GNI

Senator Dick Durbin has upped the ante on the relationship between our high-tech industry and human rights abroad. In a letter sent last week, Durbin urges 26 ICT companies to join the Global Network Initiative (GNI) and gives them a deadline to respond to a series of questions with regards to the GNI and elaborate on current company policy with regards to the principles set forth by the GNI.

A copy of the letter below:

August 6, 2009

Dear Company CEO,

We appreciate [COMPANY NAME] representatives taking the time to meet with staff from the Human Rights and the Law Subcommittee recently about [COMPANY NAME]’s approach to human rights issues.

As the Chairman and Ranking Member of the Human Rights and the Law Subcommittee, we recognize and appreciate that information and communications technology (ICT) companies like [COMPANY NAME] have enabled billions of people around the world to express themselves more fully and freely. Iranian opposition protesters’ use of the internet is one recent, prominent, and inspiring example.

At the same time, recent events in China make clear that repressive governments around the world continue to restrict their citizens’ ability to exercise their right to freedom of expression. Companies that conduct business in such countries can play a vital role in promoting freedom of expression, but they must not do so at the expense of their users’ privacy. While no ICT company can absolutely guarantee that it will not unwittingly facilitate government repression, every ICT company should take reasonable measures to minimize the risk of such complicity.

One promising avenue for reducing exposure to human rights violations is the Global Network Initiative (GNI), a voluntary code of conduct for ICT companies that requires participating companies to take reasonable measures to protect human rights (for more information, see http://www.globalnetworkinitiative.org). On May 20, 2008, we held a hearing on “Global Internet Freedom: Corporate Responsibility and the Rule of Law,” at which there was extensive discussion about the GNI, which was then being negotiated by, among others, Google, Microsoft, Yahoo!, and leading human rights organizations and socially responsible investment companies.

Following the hearing, we encouraged Microsoft, Google, and Yahoo! to complete the GNI negotiations as soon as possible. On October 28, 2008, the GNI was launched and since that time, the Human Rights and the Law Subcommittee has closely monitored its progress. We believe the GNI has great potential to advance and protect human rights if member companies fully implement the GNI’s principles and the GNI’s membership is expanded. While the GNI principles are universal, we understand that the GNI is intended to be adaptable to the particular circumstances of companies from all sectors of the ICT industry, regardless of size and geographic location. We also note that if ICT companies do not take reasonable steps to effectively protect human rights, like those contemplated by the GNI, it may be necessary for Congress to consider legislation to ensure that companies take such measures.

Accordingly, we strongly encourage [COMPANY NAME] to consider participating in the GNI.

We would appreciate your responses to the following questions by August 27, 2009:

What are your company’s views on the GNI?
Will your company consider joining the GNI? If yes, please describe the process you will follow to consider joining the GNI. If no, why not?
Does your company currently follow any of the GNI principles?
Please describe your company’s policies and practices for advancing and protecting human rights and minimizing the risk that your products and/or services will facilitate human rights abuses.

Sincerely,


Richard J. Durbin

Dolphin Risk: US Senate Must Ratify Law of the Sea

My favorite show on TV is Whale Wars (my niece's as well). The show is a documentary-style reality series that follows Paul Watson, founder of the Sea Shepherd Conservation Society, and his crew aboard the MV Steve Irwin as they attempt to deter Japanese ships hunting minke and fin whales in Antarctica.

Now comes, the eco-mentary, The Cove. The Cove, a mix of Flipper and Bourne Ultimatum, seeks to uncover the truth behind dolphin trafficking in Japan. I haven't seen the film yet - but the trailer is haunting.



These two projects, in my opinion, are just as important as Al Gore's Inconvenient Truth. As I have written before, "The degradation of the world’s oceans, the decline of marine ecosystems, and the collapse of important fish species is well documented. It is important to have a global sustained effort by world governments and other institutions to do something about it."

Urge the president and the Senate to work to ratify the Law of the Sea Convention

Report Risk: ICMM Presents Guide on Mining and Human Rights

The International Council on Mining and Minerals (ICMM) launched the guide, “Human Rights in the Metals and Mining Industry: Overview, Management Approach and Issues.”

Congrats to the team over at ICMM. The guide is a great initial start to a very complex set of issues. ICMM has taken the so-called Ruggie Framework, "Protect, Respect, and Remedy" as its basis to inform ICMM members on how to approach human rights issues.

The main focus areas of the Guide are:

1. Employment issues

2. Security

3. Resettlement
4. Indigenous Peoples
5. Conflict
6. Artisanal & small-scale mining
7. Anti-corruption & transparency

I am very impressed with ICMM and can imagine how difficult it was to come to a consensus on the make-up of the guide. The press release states that the guide is one of a series. I do hope the next publication provides concrete operational guidance based on the Ruggie Framework and a rethink on launching a set of Human Rights Principles that its members can sign.

Mining companies --- it's in your court now.

Mapuche Risk: Lumber Firms and Land Recovery

Hundreds of indigenous Mapuche and Pehuenche appropriated the lands of a logging company and independent business owner in southern Chile, claiming the territories rightfully belong to the indigenous peoples of the region.

On Saturday, at least 50 Mapuches from the community of Temucuicui entered the La Romana estate on two occasions and used stones, slingshots, bolas and gunfire to attack police special forces units standing guard over the property.

Police used tear gas against the attackers.

The incident came two days after the Indians announced a process of “land recovery” and accused the government of not providing solutions to their situation.

Southern Chile in recent years has seen increased violence between Mapuche communities and farmers and lumber firms.

The Mapuches, Chile’s largest indigenous group with slightly more than 600,000 members, demand the constitutional recognition of their tribal identity, rights and culture, as well as ownership of the lands that belonged to their ancestors.

The Unrepresented Nations and Peoples Organization (UNPO)posted this interview with a former Chilean Minister:

The former Chilean Minister Francisco Huenchumilla affirmed that the ongoing violence related to indigenous claims in Araucanía is mainly a symptom of a historical problem, which could not be solved by repression. A broader understanding of the historical roots as well as a dialogue with the involved communities is a much needed step.

Huenchumilla, who is also a former representative and Mayor of Temuco, in his interview on Radio Cooperativa has also asked ‘to which extent it is possible that after 37 episodes where police forces were sent to keep order, the authorities believe sending those forces is still the best solution’.

For achieving social peace, we must pay for it. Including those occupied buildings, they should have been paid a long time ago. ‘People’s awareness concerning land recovery is very powerful. It’s less a matter of ill will or trying to damage the State than it is an ongoing unfairness feeling that can only be solved trough political dialogue and mutual understanding’ – said the first Mapuche descendent who has achieved a ministerial position. Huenchumilla has also questioned why until the present situation the issue keeps being treated under the Internal Security Law. He explains: ‘One must analyze these conflicts as a symptom of a much deeper problem that requires political addressing’. Furthermore, the real dimensions of the conflict remain unknown by the Chilean authorities and its solution starts with ‘revealing the historical truth’, instead of committing the mistake of believing it’s only a matter of public order or poverty.

Huenchumilla has also invited central authorities to come to the region, not only to talk with the local police force, but also to understand and to open a political dialogue with the Mapuche.

Ruggie Risk: Business & Human Rights Resource Centre launches information hub on work of UN Special Representative John Ruggie

PRESS RELEASE

(for immediate release)

Business & Human Rights Resource Centre launches information hub

on work of UN Special Representative John Ruggie

London, 30 July 2009 – Today the non-profit Business & Human Rights Resource Centre launched the world’s only online portal for all materials relating to the work of the United Nations Secretary-General’s Special Representative on business & human rights, Professor John Ruggie.

The portal is at www.business-humanrights.org/SpecialRepPortal and can also be reached via the Resource Centre homepage. This free portal includes all the Special Representative’s reports, papers and speeches; material on his consultations with stakeholders; and diverse commentaries about his work.

Professor Ruggie commented:

“This portal is an indispensable tool that enables real-time exchange of information and dialogue to take place between the mandate and stakeholders all over the world. It constitutes our own version of an ongoing global town-hall meeting, where everyone can be heard and participate in the strengthening of the international human rights regime as it relates to business.”

Christopher Avery, Resource Centre director, said:

“In our work tracking companies globally, we see positive steps by business, but also continuing human rights abuses by companies, sometimes grave abuses. In this context, the UN’s work on business and human rights is critical. This portal aims to make the UN Special Representative’s work easily accessible to a global audience. The more people following Professor Ruggie’s work and contributing their input, the better.”

Key features of the new portal include:

· Introduction to the Special Representative’s work

· “Latest news”

· The Special Representative’s reports to the UN Human Rights Council (in various languages)

· Topic-specific links to the Special Representative’s materials – such as:

o company policies

o conflict zones

o complicity

o export credit agencies

o grievance mechanisms

o impact assessments

o national human rights institutions

· Complete list of documents prepared by the Special Representative

· Submissions to the Special Representative

· Commentaries

This is the second portal on the Centre’s website. The Corporate Legal Accountability Portal, launched last year, demystifies lawsuits from across the world alleging human rights abuses by companies.

The new UN Special Representative portal is made possible by a grant from the Swiss Federal Department of Foreign Affairs.

This portal and the entire Resource Centre website were engineered by Jamkit, specialists in web solutions for the not-for-profit sector. Jamkit is part of the Blue Fountain Systems group of companies.

Extraterritorial Risk: China's New Environmental Law

Wow. China is getting serious about the environment. Not just in China but around the globe.

The government plans to enact legislation making it mandatory for Chinese companies involved in overseas projects to respect the environment and be liable for damage caused.

Under the latest move, China's outbound investors will be asked to review any environmental impact their projects might have before they are started.

The businesses will also have to include environmental protection measures such as sewage and waste treatment facilities for all existing and planned projects.

Chinese companies will be required to abide by international environmental treaties China has signed as well as the green regulations in their host countries.

They will also have to provide compensation for any damage they cause to the ecology from their projects, said Zhi Yingbiao, a program officer from the Global Environmental Institution (GEI), a non-governmental organization and co-designer of the guidelines with the CAEP.

More later... I think this is fascinating.

Munk Risk: Global Network Initiative Monitor

Forget Congress, GNI signatories have new monitor:

We are pleased to announce a new project this summer in the Citizen Lab, called the "Global Network Initiative Monitor" or "GNI Monitor" for short.

The project's mission statement can be downloaded here

The project will combine technical and contextual research methods to measure compliance of both participants and non-participants to the GNI principles, as well as evaluate the GNI process overall.

This project sounds fascinating and it will interesting to see how it is implemented over the years. However, I would caution Citizen Lab and ask them to read the GNI principles and mission statement closely. Signatories have various requirements with regards to human rights assessments - but those come in the next phase. You can't really monitor progress on an initiative that has just begun and doesn't even have an Executive Director. Citizen Lab's first statement should be to urge the GNI members to move toward the assessment stage, but should limit its monitoring until after the assessments and strategies are put in place. My two cents...

Patent Risk: Indigenous Peruvians Protect Sacred Genetic Codes

A fascinating story was just re-posted on the Business & Human Rights Resource Center, Peru's patent win strikes blow against biopiracy.

Peru has successfully defended and prevented foreign firms from patenting products developed using Indigenous traditional knowledge.

Over the past few months, the Peruvian National Commission Against Biopiracy has shown authorities from France, Japan, Korea and the United States that products submitted for patents were developed using the traditional knowledge of Peruvian people.

...The commission monitors 69 Peruvian genetic resources on databases at the world's main patent offices...

On a personal note, while in college, I travelled to Huancabamba in northwestern Peru to study traditional medicine. I think the strategy of the Commission is excellent. The medicinal properties of compounds developed in Peru should remain in the patent of the Peruvian people and international use of these compounds should benefit all and give credit where credit is due.

Water Risk: Robert Glennon on The Daily Show

Check out this great clip of Jon Stewart's interview with Robert Glennon, author of Unquenchable: America’s Water Crisis and What To Do About It.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Robert Glennon
www.thedailyshow.com
Daily Show Full Episodes Political Humor Joke of the Day

Chindonesia: The Rise of Indonesia

First there was BRIC (Brazil, Russia, India, China), than there was Chindia (China, India) and now there is Chindonesia (China, India, Indonesia). The addition of Indonesia is important and interesting. Chindonesia will represent the equivalent of 44% of the US economy in the next 5 years with a GDP surpassing $10 trillion.

Indonesia is a large, diverse developing democracy that is endeavoring with some success to attract increased foreign investment. The country selected its first freely elected president in 2004. Recent laws have eased property restrictions generally, while restricting the share of foreign ownership in key industries, including telecommunications. Foreign direct investment (FDI) in Indonesia jumped 54 percent to $13.95 billion in the first 10 months of 2008 from the same time a year ago. This was more than double the government’s goal, and was driven by the telecommunications sector.

The primary challenge for doing business in Indonesia is a harsh and often arbitrary judicial system; civil or administrative cases may be treated as criminal matters, trade disputes are difficult to resolve, contracts and property rights are inconsistently enforced with a preference for domestic actors, and prisoner mistreatment is well-documented. Key Social Risks include corruption, security, and financial crime.

However, Indonesia’s economy is still set to emerge a “winner” after avoiding the worst of the global financial crisis, according to Joachim von Amsberg, the World Bank’s representative in Jakarta.

But proceed with caution, just yesterday, a police officer was found dead in Papua Province near the copper and gold mining complex called Grasberg run by American conglomerate Freeport.

His death followed the fatal ambushes over the weekend of a security guard and an Australian mining expert both working for Freeport in the same area. Authorities blame Papuan separatists who have been fighting for autonomy for their province for decades. Thousands of Indonesian troops are stationed in Papua, which remains the country’s most impoverished province despite the wealth of its resources.

Burger Risk: Texan Whopper Offends 1 Billion Hindus

Someone needs to explain this one to me... What was the ad agency thinking? And shouldn't Burger King have some advertising standards across its franchises? Its not the first time a company has offended an entire population with its advertisements - although offending 1 Billion Hindus is not something that should be taken lightly.

News from the Telegraph...

The fast food chain quickly withdrew the advertisement from its stores in Spain after Hindus across the world complained at the denigration of their religion.

The advertisement shows a picture of Lakshmi, the Indian goddess of wealth, above one of the burgers, which are forbidden under Hindu religion.

The 'Texican Whopper' is an affront to Hindu sensitivities in its own right – it includes an all-beef patty, a beef chilli-con-carne slice, egg-based Cajun mayonnaise, all forbidden by strict Hindus. Some devotees would even be offended by the inclusion of onions which they believe inflame passions.

But it is the depiction of Lakshmi which has provoked widespread anger with its suggestion that a Hindu deity eats beef.

The goddess and the burger were placed under a slogan claiming 'La merienda es sagrada' – the snack is sacred.

Burger King quickly withdrew the posters and issued an apology after world Hindu leaders condemned the chain for its insensitivity.

"We are apologising because it wasn't our intent to offend anyone," said spokeswoman Denise T Wilson. "Burger King Corporation values and respects all of its guests as well as the communities we serve. This in-store advertisement was running to support only local promotion for three restaurants in Spain and was not intended to offend anyone.

"Out of respect for the Hindu community, the limited-time advertisement has been removed from the restaurants," she added.

Earlier this year, Burger King offended Mexican officials with another advertisement for the 'Texican Whopper' which depicted a dwarf dressed as a wrestler draped in the Mexican flag.

Twittercraft: Foreign Policy by Other Means

Much has been made in the last month of Twitter’s unexpected role in Iran’s ongoing political upheaval. The social-networking tool became the de facto method of communication among those protesting Mahmoud Ahmadinejad’s questionable re-election, in the process earning widespread accolade for giving voice to the people.

Twitter’s enabling role in Iran dovetailed quite closely with American foreign policy interests, allowing Washington to maintain a plausible distance as foment was spread across the Islamic Republic. It is not always the case, however, that America’s technology firms operate in sync with our country’s interests abroad.

At times, in fact, our technology companies operate at cross-purposes with Washington, their software and hardware serving not to facilitate democratic aspirations, but to quash them. In Burma and China, where access to information is tightly controlled by the government, two Silicon Valley firms -- respectively, Fortinet and Cisco -- built and have maintained the massive firewalls that hamper the public’s ability to access and disseminate information.

When our nation’s companies play prominent roles in other countries’ business, all sorts of complicated questions arise. Ask the European consortium, Nokia Siemens Network, that built the communications infrastructure in Iran. The consortium has come under heavy criticism for providing the Iranian regime with the ability to monitor telecommunication traffic. Yet it is the very same consortium that has provided those opposed to the regime with a robust network for tweeting, posting and texting.

When faced with such a dilemma, what ought American firms do? To date, our technology companies have gotten little guidance from Washington, which has foot dragged on codifying a set of operating standards. More often than not, the American government has left the industry to regulate itself.

To some degree, technology companies have proven themselves up to the task. This year, Microsoft, Google, Yahoo! and others launched the Global Network Initiative, a voluntary framework for respecting, protecting and advancing human rights in all countries where the companies operate. The alliance is to be applauded for securing public pledges from Internet companies to refrain from censorship and from divulging personal information to any government that is not committed to an international standard of free expression and privacy.

Yet it ought not be forgotten that a driving force for the Global Network Initiative was an incident two years ago in which Yahoo! acted in a far less noble manner. Pressed by Beijing, the Internet giant divulged the identity of a Chinese democracy activist, leading to his detention, alleged torture and sentencing to 10 years of hard labor in prison.

The Global Network Initiative is a major step in the right direction, but far better cooperation and partnership is needed between America’s business leaders and policymakers. In the case of Iran, Twitter, Facebook, YouTube and Google all played an important role and demonstrated both remarkable flexibility and good political judgment – independent of a still-hesitating White House. YouTube relaxed its rules on video broadcasts to allow the global dissemination of the amateur film of the bloody death of Neda Agha Soltan, while Google pulled forward the launch of its Farsi-language search engine and translation tool. For better and for worse, America’s technology companies have a demonstrated record of driving crucial foreign policy outcomes, and Washington must make its concerns known when it believes a foreign cause is just.

A model for cooperation can be found in the events of recent weeks in Iran, with Twitter again playing a central role. During the first few days after the election, communication among, to and from protestors was exponentially higher than normal. Twitter was scheduled to perform maintenance on its system, but at the request of the State Department, the company postponed the routine work in order to avoid interruptions in service.

The innocuous request from the State Department and Twitter’s granting of it are the kind of cooperation between government and business that ought to be extended to other areas of foreign policy. That is not to imply, of course, that American technology companies should blindly pursue the interests of Washington, nor Washington the technology companies’. But when those interests overlap, as they did recently in Iran, greater cooperation is both good politics and good for business. Twitter, Google, and YouTube do not come with a “Made in the U.S.A.” label, but the Iranian people may not notice the difference.

This piece was originally published on Huffington Post.

Peru Risk: Perenco Drilling for Trouble...

The press release below says it all. As I blogged last week, "Amazon Risk: Peru's Jungle is Not for Sale," --- protests against the opening of the Peruvian Amazon for drilling, logging, etc - was met with violence and the resignation of the Prime Minister. Now comes word from Survival International - that Perenco has been given the go ahead to drill on land believed to be inhabited by indigenous people. Perenco links on its website to an "Anthropological interdisciplinary study" for the Peru project. The study was done by a Peruvian-based consultancy - Daimi Peru. I am still digging through it to figure out the methodology. I do hope that Perenco incorporates human rights and social risk indicators when assessing the risk its project in Peru will generate. A study is just a study - without a monitoring and a mitigation strategy in place - Perenco will never ensure its social license to operate and the project will be plagued with protest and delay. It looks like Perenco is digging for trouble...

Peru's government has given the green light to an Anglo-French company to drill for oil in the Amazon, just thirteen days after more than 30 people died in protests against the exploitation of the rainforest.

The project, located on land inhabited by two tribes of uncontacted Indians, is believed to be Peru’s biggest oil discovery in thirty years. The company, Perenco, a major gas supplier to the UK, has in the past denied any uncontacted Indians live there.

Until recently, Perenco had been blocked from entering the area by local indigenous protesters. With help from Peru’s armed forces, the company managed to break through the blockade on at least one occasion.

High-ranking figures in Peru’s government hope that Perenco’s project will transform the Peruvian economy. While protests against the company were taking place, Perenco’s chairman, Francois Perrodo, an Oxford University polo blue and scion of one of the wealthiest families in France, met Peru’s President Garcia in Lima and pledged to invest $2bn in the project.

The government’s green light comes just days after protests elsewhere in northern Peru were violently broken up by police, leading to the deaths of both police officers and indigenous protesters. The exact numbers are still unknown. Survival has issued an eyewitness account of the violence.

Perenco intends to build new platforms and wells involving airlifting in, amongst other things, 42,000 sacks of cement. It admits that ‘contamination of soil’, ‘contamination of water’ and the flight of game and birds are possible consequences of its work. All these are essential to the survival of the uncontacted Indians who live there. More seriously, the Indians face the very real threat of contagion from diseases to which they have no immunity.

Survival’s Director, Stephen Corry, said today, ‘Anyone who hoped that the dreadful violence of the past few weeks might have made Peru’s government act with a bit more sensitivity towards the indigenous people of the Amazon will be really dismayed at this news. The timing couldn’t be worse – the government is trying to present a more friendly image in public, but as far as the oil companies are concerned, it looks like business as usual.’

Syriana Risk: Honduran Coup Celebrated by Business

Is there a Syriana-style coup taking place in Honduras? While, the US government, the EU, and the UN have all condemned the ouster of Honduran President Manuel Zelaya – multinational and local business leaders have a different take.

Foglia Sandoval, former president of the American Chamber of Commerce in Honduras was quoted as saying, “I don’t know of anyone who isn’t celebrating.

The business community despised Zelaya. In December he raised the minimum wage by 60%, although the unions were asking for 20-30% increase.

Security was a major concern as narco-traffickers were seemingly given free reign. Pablo Largacha, a Costa Rica-based director of public affairs and communications for Coca-Cola's Latin Center Business Unit, told Latin Business Chronicle - “The main challenge has to do with security, and the negative effects that this issue has both in our consumers and on the ability to attract foreign investment."

Zelaya also moved to cut off the oligarchic ruling class. He broke up the monopoly of the multinational oil companies supplying fuel, and granted preferential status to Venezuelan based Petrocaribe. He then went after the pharmaceutical multinationals by importing cheap generic versions of the most commonly used drugs from Venezuela and Cuba.

Honduras, for most of the 20th century was a classic “banana republic”, dominated by United Fruit, which controlled the overwhelming majority of the country’s land. There were periodic US military interventions to remove governments which attempted to curtail the power of United Fruit.

Whether orchestrated by outside actors, business or otherwise, the coup in Honduras is illegal. It sets a bad precedent. The US is right to denounce it. If the international business community wants access to Honduras’ wealth, location, etc – they are going to have to convince the Honduran people first.

Chevron, Trade, and the Democrats

As I reported last October, Chevron has been actively lobbying Washington policymakers to rescind preferred trade status for Ecuador if the case pending in their court against Chevron moves forward.

Now comes word that a letter was sent to U.S. Trade Ambassador Ron Kirk, signed by Senators Ron Wyden (D-OR), Robert P. Casey, Jr. (D-PA), Dick Durbin (D-IL), and Patrick Leahy (D-VT), stating: “We write to express our concern with Chevron Corporation’s efforts to petition your office concerning a pending lawsuit it is facing in the Ecuadorian legal system. It is our understanding that Chevron is seeking the threatened withdrawal of the [trade benefits] for Ecuador if this lawsuit moves forward.”

The Senators write: “Corporate responsibility at home and abroad is critical, particularly when it concerns human health and the environment. We request that you allow the legal proceedings in Ecuador to take their course without any undue intervention from the U.S. government.”

Chevron is charged in the class-action lawsuit with dumping more than 18 billion gallons of toxic waste into Amazon waterways when it operated a large oil concession in Ecuador’s Amazon from 1964 to 1990. Chevron had requested that the case, originally filed in 1993 in U.S. federal court, be transferred to Ecuador where a trial began in 2003 and is expected to end later this year.

The court will decide whether to accept a $27.3 billion damages assessment prepared by a team of independent experts, who reviewed most of the evidence in the case and submitted a 4,000-page report last April.

This case, no matter how it is decided, will be historic. More later....

Daryl Hannah Risk: Mountaintop Mining Protests

More than thirty people were arrested on Tuesday, including NASA climate scientist James Hansen and actress Daryl Hannah, protesting mountaintop removal in West Virginia. The protesters were charged with obstructing officers and impeding traffic after they sat down in the middle of the road outside of the facility run by Massey Energy. It was the latest protest in a growing civil disobedience campaign against mountaintop removal.



Read about Mountaintop Removal and its effects on the environment, jobs, etc.

Lama Risk: Mining in Tibet

Tibetans in exile staged a die-in protest at the main Square in Dharamsala, the headquarters of the Tibetan Government in exile. The protest is a part of a global campaign against Hunter Dickinson's subsidiary Continental Minerals, which holds its shareholders' meeting today, to immediately cease all mining operations in Xietongmen - central Tibet.

According to the website StopMiningTibet.com,

In 1999, the Chinese government launched the "Western Development Strategy", politically motivated plan designed to further consolidate control over Tibet through economic rather than military means. Claiming that the plan will bring "development" and "prosperity" as well as "national unity" to the region, million dollar investments have been made in large scale transportation and communication infrastructure, most notably the construction of the China-Tibet railway and major extractive projects like mine operations and oil pipelines.

The Western Development Strategy is threatening the survival of Tibetan identity and cultural in more subtle but equally destructive ways as overt force. The relocation of millions of ethnically Chinese settlers into Tibet and the exploitation of Tibet's mineral resources to feed China's industrial provinces along the Eastern seaboard are two central components of the plan. The Chinese government has been promoting Tibet to foreign owned mining companies who have the technical expertise and capitol to invest in Tibet's isolated and difficult mining environment. Teaming up with experienced foreign firms is also a way for the Chinese state owned companies to raise their competitiveness in the world markets.

Large scale development in Tibet has rarely benefited Tibetans and mining in this context will likely flood the area with Chinese workers, further marginalizing Tibetans economically, culturally and politically while hastening the plundering of Tibetans natural wealth. Increased investment in resource extraction projects in Tibet places increased pressure on Tibet's fragile eco-system and further assimilates its people and culture.

Canadian companies have no business profiting from China's colonization of Tibet

The Tibetan Government in Exile has calle upon mining companies and investors to abide by the following:

• That projects have consulted local Tibetan people.
• That projects have fully investigated social, environmental and cultural impacts.
• That projects will benefit Tibetans.
• That the working language of any project is Tibetan.
• That projects do not deplete natural resources with little or no benefit to the Tibetan people.
• That projects do not facilitate the migration and settlement of non-Tibetans into Tibet.
• That projects do not transfer ownership of Tibetan land and resources to non-Tibetans.
• That projects do not facilitate large-scale, capital-intensive and commercial projects.

Certainly for Western mining companies to proceed in Tibet many of the demands above should be met and would ensure a license to operate not only with the Chinese government but the Tibetan community in exile.

China Risk: New Book by Michael Santoro on Corporate Responsibility in China

I just read a great review of Michael Santoro's new book, China 2020: How Western Business Can - and Should - Influence Social and Political Change in the Coming Decade.

Here is the review, below is the description, click here to purchase.

Chinese society is plagued by many problems that have a direct impact on its current and future business and political environment-worker rights, product safety, Internet freedom, and the rule of law. Drawing on knowledge gained through personal interviews, documentary sources, and almost two decades of visits to China, Michael A. Santoro offers a clear-eyed view of the various internal forces-such as regionalism, corruption, and growing inequality-that will determine the direction and pace of economic, social, and political change. Of special interest is Santoro's assessment of the role of multinational corporations in fostering or undermining social and political progress. Santoro offers a fresh and innovative way of thinking about two questions that have preoccupied Western observers for decades. What will be the effect of economic reform and prosperity on political reform? How can companies operate with moral integrity and ethics in China? In China 2020, Santoro unifies these hitherto separate questions and demonstrates that moral integrity (or lack of it) by Western business will have a profound impact on whether economic privatization and growth usher in greater democracy and respect for human rights.
China 2020 also offers a novel vision of China's future economic and political development. Santoro rejects the conventional view that China will muddle through the next decade with incremental social and political changes. Instead he argues that China will follow one or two widely divergent potential outcomes. It might continue to progress steadily toward greater prosperity, democracy, and respect for human rights, but it is also highly likely that China will instead fall backward economically and into an ever more authoritarian regime. The next decade will be one of the most important in the history of China, and, owing to China's global impact, the history of the modern world.

China 2020 describes various tectonic social and political battles going on within China. The outcomes of these struggles will depend on a number of powerful indigenous forces as well as the decisions and actions of individual Chinese citizens. Santoro strongly believes that Western businesses can-and should-influence these developments.

'White Magic' Risk: Rio Tinto Turns Head on BigLaw

Over the past 2-3 years, American (White Shoe) and British (Magic Circle) law firms have had to cut costs, re-engineer billing equations, and conduct layoffs or furloughs of senior and incoming counselors.

Now comes the news that is sending shivers through the White-Magic Board Rooms from New York to London. Anglo-Australian mining company Rio Tinto has hired a team of lawyers in India to try to reduce its annual £60 million legal bill by 20%.

According to the Times of London, Rio Tinto is believed to be the “first big company to recruit a team of fully qualified lawyers to perform substantive legal work that otherwise would have been done by lawyers in London.”

The Indian firm:

CPA Global is a private Jersey company with a $1 billion turnover. It specialises in trademarks and patents and acts for clients such as Microsoft. It has spent more than $50 million on legal facilities in Delhi and expects to recruit 500 lawyers there in nine months. In two years, it aims for 3,000 lawyers in Manila, New Zealand and South Africa.

Obviously there are lots of things to be concerned about, but I find it a tad ironic that the very firms that have been encouraging outsourcing or off-shoring are becoming the victims of their own advice.

Amazon Risk Update: Peruvian PM to Step Down

Prime Minister Yehude Simon is sending a bill to Congress revoking the land laws that led to deadly clashes between police and indigenous protesters in the Amazon.

Peru's Prime Minister Yehude Simon, who has led the talks, has said he will step down once the dispute is settled.

"I will leave as soon as everything has calmed down, which should be in the coming weeks," Mr Simon told Peruvian radio on Tuesday after meeting indigenous leaders.

He said the government would send a bill to Congress on Wednesday asking for a repeal of the laws which would have allowed mining, oil and gas exploration and other economic development in the Amazon rainforest.

Indigenous people say they want to be consulted on development. The government had to know how to listen, Mr Simon said, insisting that the reversal of policy would not put at risk Peru's free trade agreement with the US.

This is not the end of the story. Peruvian President Alan Garcia has said that developing parts of the Amazon are part of his investment programme to tackle widespread poverty. The president intends to continue his policies of foreign investment based on free trade.

Again, listen up, MNC's --- do proper human rights due diligence before proceeding. The next big protests wont be toward the Peruvian Congress, but against corporate actors that develop in the Amazon without community license to operate.

Risk Mitigated: China Backs Down on Censorware Demand

There are many reasons the Chinese government backed down on its plans for mandatory installation of censorware on all PC's sold in China. They include - Chinese public outcry, international condemnation, NGO and foreign government protest, and corporate refusal. All of the above!

This is a real victory for the business and human rights community. The recently launched Global Network Initiative, which I wrote about last week, gave the ICT community the ability to collectively reject what was clearly a violation of international human rights standards.

This sets a great precedent for other industries to follow. From extractives to pharmaceuticals - the success of the GNI's public protest should encourage all industries to engage in multi-stakeholder initiatives, agree on a core set of principles, commit to human rights impact assessments, and actively speak out with one collective voice to ensure a company's corporate footprint does not include the denial of basic human rights.

Image Credit: The image in this post comes from a series featuring the Green Dam Girl, a crusader who carries a rabbit (the software's mascot), to stamp out content. This one is Green Dam Girl pulling the underwear off of XP Girl. More images here.

ICT Risk: Global Network Initiative Issues Statement

Just two days after my Huffington Post piece, "Hardware Risk: China Targets PC Manufacturers," urging the industry to reach out to the Global Network Initiative (GNI) for guidance. The GNI put out this exceptionally crafted statement:

The Global Network Initiative is actively monitoring developments regarding the Chinese government’s directive that requires computer manufacturers to install the Green Dam/Youth Escort content control software on personal computers produced or sold in China. This directive is ostensibly intended to protect children from sexually explicit content, but in fact raises significant challenges for companies in the technology sector that also have a responsibility to respect human rights. The Global Network Initiative (GNI) offers a multi-stakeholder forum that provides operational guidance and a credible system for companies to develop effective strategies in response to these challenges.

Protection of children from exploitation and exposure to inappropriate material online is a legitimate public policy goal, which many countries around the world pursue. This goal can be achieved in ways consistent with international norms protecting the rights to freedom of expression and privacy. For example, public education regarding the availability of a wide variety of user-controlled filtering tools that allow parents and guardians to manage unwanted content in a way that is most appropriate for children under their care. Various companies – including the three company members of GNI – as well as other organizations offer a wide range of such software tools. However, the government mandate to pre-load the Green Dam/Youth Escort software on all PCs produced and sold in China clearly raises human rights concerns that the information and communications technology (ICT) sector must address.

The GNI Principles are grounded in international human rights standards for freedom of expression and privacy. Under these standards, the right to freedom of expression should not be restricted by governments except in narrowly defined circumstances, consistent with international human rights norms and the rule of law. Importantly, such restrictions should be necessary and proportionate for the relevant purpose.

Much about how the Green Dam/Youth Escort software functions in practice is yet to be determined and several GNI members are undertaking such an analysis. However, a number of facts about the software have been established that raise human rights concerns.

The concurrent and cumulative issues that implicate human rights and undermine user choice include the requirement for mandatory installation; the difficulty of uninstalling the software; and filtering that goes beyond sexually explicit or other content inappropriate for children. Results from independent tests of the software reported on Global Voices Online and elsewhere indicate that political content was indeed part of the website library of filtered content. An approach for protecting children online that requires the mandatory installation of a particular software package that is difficult to uninstall and filters far more than sexually explicit content is not consistent with the practices of other countries that have encouraged parental control tools and is far out of proportion to the goal of child protection.

Public opposition (including a legal challenge) to this software mandate within China is growing. The Chinese press and diverse parts of Chinese civil society have expressed concerns about privacy, security, transparency, consumer choice, and whether the cost of this effort is justifiable. In fact, the government recently clarified that use of the software by citizens is not mandatory in its official media statements. We hope that the domestic reaction within China will encourage the Chinese government to reconsider this mandate more fundamentally.

Nevertheless, there are many questions unanswered. Are any companies working with the software vendor to try and put the software in the market? If the government clarifies its directive so that the software is shipped on a disk but not pre-installed, what should companies do to avoid complicity in censorship of political, religious, and cultural information online? How can governments appropriately protect children from exploitation and exposure to inappropriate material? What steps should companies take to address such requests or directives? Hardware and software design companies will need to have adequate due diligence measures in place to ensure that they are prepared to address these questions in a way that respects fundamental human rights.

The GNI can help to address those dilemmas since it is a unique organization with the capacity to provide operational guidance on human rights issues in a collaborative setting. In particular, the GNI offers credible, operational guidance for companies, built on extensive experience, guided by a broad set of perspectives, and rooted in international human rights principles. The GNI also offers both technology sector companies and academics, investors, and non-governmental organizations an opportunity for frank discussion, collaboration on matters of public policy and corporate responsibility, and the sharing of expertise. Among the GNI principles and operational guidelines that are relevant to manufacturing and software companies:

Participating companies will respect and protect the freedom of expression of their users by seeking to avoid or minimize the impact of government restrictions on freedom of expression.
Participating companies will employ human rights impact assessments to identify circumstances when freedom of expression and privacy may be jeopardized or advanced, and develop appropriate risk mitigation strategies, e.g., when designing and introducing new technologies, products, and services.

GNI participants will engage proactively with governments to reach a shared understanding of how government restrictions can be applied in a manner consistent with human rights norms. Companies will seek modification from authorized officials when government restrictions appear overbroad, not required by domestic law or inconsistent with international human rights standards.

Participating companies will give clear, prominent, and timely notice to users when access to content has been limited due to government restrictions.

GNI participants acknowledge and support appropriate initiatives that seek to identify, prevent, and limit access to illegal online activity such as child exploitation. Such initiatives raise potential concerns regarding freedom of expression and should therefore be narrowly tailored and subject to the rule of law.

Amazon Risk: "Peru's Jungle Isn't For Sale"

The Battleground has moved from the Amazon to the streets of Lima to protest the government's plan to allow foreign oil companies to explore and extract oil from the Peruvian Amazon.

At least 20,000 students, labor union members and indigenous Peruvians from the country's Andean highlands descended into Lima for mass protest, where riot police fended off several hundred students, some of whom threw rocks and Molotov cocktails.

Marchers chanted, "The jungle isn't for sale," during the protests, which were organized in response to a bloody confrontation at an Indian roadblock June 5 in the northern state of Amazonas. It was Peru's worst political violence in more than a decade, with 23 police officers killed, many with spears. Indian leaders reported that at least 30 civilians died.

President Alan Garcia ordered the opening of indigenous land in the Amazon to oil and natural gas, as well as logging and biofuel crops. Due to the protest, Garcia has suspended two legislative decrees for fifteen days to seek agreement.

Obviously fifteen days is not long enough to negotiate with the Indigenous community. Indigenous peoples have rights, as spelled out in the UN Declaration on the Rights of Indigenous Peoples- of which Peru supported in the General Assembly.

And there is no time like the present for foreign and domestic companies that hope to reap the benefits of the Amazon resources to conduct human rights impact assessments prior to engagement to ensure a license to operate and respect for human rights.

Check out the Al Jazeera report below. (note: AJ has really become the business and human rights TV station!)

Hardware Risk: China Targets PC Manufacturers

The Chinese censorship authorities have a new target – PC manufacturers. By the end of June ’09, China wants all personal computer manufacturers, including US-based Dell, HP, and Apple, to install censorship software prior to sale in China. The software called ‘Green Dam,’ developed by the Chinese military, is ostensibly purposed for the filtering of pornography. However, many believe the software may act like spyware to allow the authorities to not only filter pornography, but to filter and track computer activity online or offline that is considered a threat to the State.

Yesterday, a number of US-based trade associations put out this brief statement:

“The Information Technology Industry Council, the Software & Information Industry Association, the Telecommunications Industry Association and TechAmerica urge the Chinese government to reconsider implementing its new mandatory filtering software requirement and would welcome the opportunity for a meaningful dialogue. We believe there should be an open and healthy dialogue on how parental control software can be offered in the market in ways that ensure privacy, system reliability, freedom of expression, the free flow of information, security and user choice.”

While the sentiment is right, it falls short of an appropriate response. The PC industry is in for a big wake-up call.

PC industry leaders should learn from their counterparts at Google, Microsoft, and Yahoo!, who last year launched the Global Network Initiative (GNI). The GNI is a multi-stakeholder initiative made up of ICT industry leaders, NGO’s and social value investors that supports a voluntary framework to respect, protect, and advance human rights in all the countries in which they operate. This alliance was the culmination of efforts to secure public commitments from Internet companies against censoring and divulging personal information to Chinese authorities, or to others who have not committed to an international standard of free expression and privacy.

In fact, the GNI should encourage the participation of the PC Industry at their table where the exisiting framework is very well suited to the problem. One can only imagine that the demand for loading censorship software on PC’s in China is just a first step. What happens when the Chinese request all PC’s include internal hardware mechanisms for the tracking and monitoring of its users?

Along with the GNI Principles, the Industry should look to the work of John Ruggie, the UN Special Representative on business and human rights. Last year, the team launched a three-part "framework" for corporate responsibility, which includes the state's duty to protect human rights, the duty of business to respect human rights, and the need for effective access to remedies for human rights abuses. The work of John Ruggie has single-handedly increased international recognition that business must respect human rights.

A proactive approach is the only play here. With 40 million PC’s sold in China last year, the importance of how the Industry responds is paramount. Thanks to Yahoo! and Google, lessons have already been learned; the response from NGO’s, government, and social investors is a foregone conclusion. Whether they join the GNI or not, PC makers must use all the tools at their disposal; these options include cooperation with the State Department, Commerce Department and Congress in order to ensure license to operate in China while respecting freedom of expression and privacy for all its users.

This post originally appeared on Huffington Post.

Occupation Risk: Veolia Pulls Out of Jerusalem Project

It's official. French company Veolia is pulling out of a controversial light rail project that links West Jerusalem and occupied East Jerusalem.

Haaretz reports:

Veolia has had to contend not only with the delays and difficulties in building the light rail project itself, but with political pressure at home as well. Two months ago a French court heard a lawsuit by a pro-Palestinian group, demanding that the light rail project be halted.

The organization based itself on an article in French law that allows the court to void business agreements, signed by French companies, that violate international law.

The political pressure on Veolia has been mounting in another direction. According to various reports abroad, the French firm had been losing major projects in Europe because of its involvement in the Jerusalem job. Observers claim that's the real reason Veolia opted out.

Just last week the the campaign to squash the project called upon Saudi Arabia to cancel a Veolia contract.

This is a great strategy. Going after projects beyond the Green Line sends a message that international support for Israel stops there. What Israel does beyond it is illegal and illegitimate. Multi-national companies should avoid all operations emanating from Israel that require work in the occupied territories. Let me be clear, as I wrote for the Huffington Post a few months back,

Divestment or boycott campaigns against Israel are prejudicial and counterproductive. They de-legitimize Israel as a whole and only fuel the Israeli perception that the world is against the Jewish state. Products, services, and universities in Israel are not illegal or illegitimate; to think so and act accordingly means to undermine the project of creating peaceful coexistence and engagement in the Middle East

However, going after business operating in the occupied territories is fair game.

I am writing a longer piece about this subject - stay tuned.

ATCA Risk: Will Shell Settle?

In New York, U.S. District Judge Kimba M. Wood has postponed the case against Shell giving to speculation that Shell might settle before the trial begins.

No foreign corporation has ever been found liable in a U.S. courtroom under the Alien Tort Claims Act of 1789.

Earth Risk: "Home," The Greatest Green Event Ever

Today is World Environment Day and what is being billed as "the greatest green event ever," is being highlighted with "Home" - a high-budget documentary to save the planet - from Yann Arthus-Bertrand.
From New York's Central Park to the Champs de Mars by Paris' Eiffel Tower, the French photographer known for the "Earth From The Air" books and "Seen From The Air" on TV, is releasing the green-awareness movie "Home" in over 100 countries simultaneously.

Shot from the air in a chopper, the environmental documentary will be available across the globe June 5, mostly free of charge, in open-air spaces as well as theatres, TV, DVD, and the Internet at http://www.blogger.com/www.youtube.com/homeproject.

"The idea is to explain what's happening to the planet by beginning at the beginning, by the miracle of life on earth," the photographer-director told AFP.

French movie mogul Luc Besson is distributing the 10-million-euro movie, a huge sum for a documentary funded by the luxury consortium PPR headed by Francois Henri Pinault.

"The massive and free distribution of the film will enable anyone, anywhere, to see it, whatever their income," Pinault said.

I sure will be watching!

This Week in Business and Human Rights

Much has happened this week in the Business and Human Rights community. As always, a big shout-out to the Business and Human Rights Resource Center, for ensuring we are kept up-to-date on the latest news, trends, etc.

1. High Commissioner for Human Rights Navi Pillay, hails a policy framework that underscores the corporate responsibility to respect human rights as “an important milestone.” The Human Rights Council on 2 June considered further practical recommendations on how to make companies human rights friendly.

2. Opening Statement to UK Parliament Joint Committee on Human Rights Professor John G. Ruggie, Special Representative of the UN Secretary-General for Business and Human Rights London, 3 June 2009.

3. Scott Jerbi writes in Human Rights Quarterly, "Business and Human Rights at the UN:
What Might Happen Next?"

Debates concerning corporate social and environmental responsibilities at the intergovernmental level have a long and complex history within the United Nations. The latest chapter in that history is the 2005 creation of an expert mandate on business and human rights. The mandate is emerging as the focal point for shaping thinking and potential future action in this field. This article examines recent developments on the subject of business and human rights and reflects on possible future actions that could be taken in this area over the coming years.

and...

4. The Danish Institute For Human Rights launches new model to help companies manage human rights risks.