T E N T H A N N I V E R S A R Y E D I T I O N

THE CORPORATE RESPONSIBILITY CODE BOOK

THIRD EDITION

THE CORPORATE RESPONSIBILITY CODE BOOK THIRD EDITION

THE CORPORATE
The Corporate Responsibility Code Book has become the go-to guide for companies trying to under-
stand the landscape of corporate responsibility and searching for their own, unique route towards satis-
fying diverse stakeholders. There is no one-size-fits-all approach. A company may face quite different
challenges if it operates in more than one part of the world. And yet stakeholders, especially consumers
and investors, are keen for some degree of comparability with which they can evaluate corporate perfor-

RESPONSIBILITY
mance. There are countervailing forces at work within corporate responsibility: on the one hand is the
need for convergence in order to simplify the large numbers of codes and standards; and, on the other
hand, the need to foster diversity and innovation.
Many of the best codes of conduct and standards are not well known, while some CR instruments that

code book
are well disseminated are not terribly effective. Some comprehensive codes of conduct achieve nothing,
while other quite vague codes of conduct become well embedded into the organisation and foster inno-
vation and change. This landmark book explains the best CR instruments available, and distils their most
valuable elements.
In this fully revised third edition, Deborah Leipziger widens her lens to provide detailed analysis of the
UN Guiding Principles on Business and Human Rights, the Gender Equality Principles and ISO 26000
while updating other key tools such as the Equator Principles, the OECD guidelines and GRI’s new G4
framework.
The codes in this book cover a wide range of issues, including human rights, labour rights, environ-
mental management, corruption and corporate governance. The book also includes how-to (or process)
codes focusing on reporting, stakeholder engagement and assurance.. THIRD EDITION
WHAT THEY SAID ABOUT PREVIOUS EDITIONS
 an invaluable practical guide   brilliantly conceived and clearly written 
Sir Geoffrey Chandler William C. Frederick

 confusion-busting guidance at its best   Occasionally, a book comes along and you know
Jonathon Porritt this is going to used again and again . . . What can
one say about this book? Nothing really: it is
simply a great book of reference and will save us
 This is a mammoth piece of work 
all buckets full of work 
Deborah Smith
Social and Environmental Accounting Journal
 A much-needed guide 
 I cannot begin to imagine the amount of work
Mark Moody-Stuart author Deborah Leipziger invested in order to
bring The Code Book and its revised second
 the key reference guide for executives and edition to life. It is truly a masterpiece in the
boards of directors seeking to become socially landscape of CSR and sustainability reference
responsible . . . Every executive should have it
close to hand 
books.
Elaine Cohen
Leipziger
Alice Tepper Marlin

Cover by LaliAbril.com. Montage produced with the generous

help of the Royal Dutch/Shell Group of Companies in

Deborah Leipziger
providing copies of the Shell ‘Statement of General Business
Principles’, which are available in 51 languages representing
the mother tongue of 99% of all Shell people.

A Greenleaf Publishing Book

www.routledge.com
The Corporate Responsibility Code Book
Revised Third Edition
Deborah Leipziger
 Deborah Leipziger advises companies, governments and UN
agencies on corporate responsibility (CR) and sustainability. She
has advised leading multinational companies on strategic and
supply chain issues, as well as a wide range of CR initiatives,
including the UN's Global Compact, the Global Reporting Initiative,
the UN Environment Programme, the Human Rights Impact
Assessment, and Social Accountability International.
Ms Leipziger is a Senior Fellow in Social Innovation at the Lewis
Institute at Babson, and has taught at the Bard MBA in
Sustainability, at the Simmons School of Management, and at Hult
International Business School.
She is a co-author of Creating Social Value: A Guide for Leaders
and Change Makers (Greenleaf Publishing, 2014) as well as Living
Corporate Citizenship (FT, 2002) and Corporate Citizenship: Successful Strategies of
Responsible Companies (FT, 1998). She is the author of Social Accountability 8000: The
Definitive Guide to the New Social Standard (FT Prentice Hall, 2001). Her books have been
translated into Portuguese, French, Korean and Chinese.
She has served as a member of several boards including the Advisory Committee on
Socially Responsible Investment for Aviva (UK), the Center for Ethics at Manhattanville
College (USA) and the International Board of Ethos (Brazil).
Born in Brazil, Ms Leipziger has a Masters in Public Administration from Columbia
University and a Bachelor of Arts from Manhattanville College in Economics and
International Studies. She can be reached at www.deborahleipziger.com.
First published 2003 by Greenleaf Publishing Limited

Published 2017 by Routledge

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British Library Cataloguing in Publication Data:

A catalogue record for this book is available from the British Library

ISBN: 978-1-907643-94-1 (hbk)

 This edition is dedicated to the pioneers who developed the
social and environmental initiatives profiled in this book. There
are many visionaries quoted here and I dedicate this book to
the vision of the founding father and mothers of these
initiatives.
I also dedicate this edition to my students at the Simmons
School of Management, at Babson, and at Bard, who have read
the Code Book and shared their impressions on the work. You
inspire me.
And, most of all, this book is dedicated to my daughters, my
triple bottom line, Natasha Lara, Jackie Lucia and Allie Nicole.
May the world that you inherit be made far better by the
initiatives profiled in these pages.
Q Taylor & Francis
~ Taylor & Francis Group
http://taylora n dfra ncis.com
 Contents

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
Sir Mark Moody Stuart

A note to readers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiv

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvi
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction to the third edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Executive summary of corporate responsibility initiatives . . . . . . . . . . . . . . . 6
1 Values, principles, norms, codes and standards . . . . . . . . . . . . . . . . . . . . . . 19

Part I: Global initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

2 The OECD Guidelines for Multinational Enterprises . . . . . . . . . . . . . . . . . . 36

THE OECD GUIDELINES FOR MULTINATIONAL ENTERPRISES (text) . . . . . . . . . . . . . 59

3 The UN Global Compact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

THE GLOBAL COMPACT’S TEN PRINCIPLES (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
THE SUSTAINABLE DEVELOPMENT GOALS (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

4 ISO 26000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
INTERNATIONAL STANDARD ISO 26000:
GUIDANCE ON SOCIAL RESPONSIBILITY (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
INTERNATIONAL FINANCE CORPORATION’S PERFORMANCE
STANDARDS ON SOCIAL AND ENVIRONMENTAL SUSTAINABILITY (text) . . . . . . . . . 78
The Corporate Responsibility Code Book

Part II: Human rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

5 The Universal Declaration of Human Rights . . . . . . . . . . . . . . . . . . . . . . . . . 131
THE UNIVERSAL DECLARATION OF HUMAN RIGHTS (text) . . . . . . . . . . . . . . . . . . . . . 135

6 The Guiding Principles on Business and Human Rights . . . . . . . . . . . . . . 141

THE GUIDING PRINCIPLES ON BUSINESS AND HUMAN RIGHTS (selectedtext) . . 147

7 The Voluntary Principles on Security and Human Rights . . . . . . . . . . . . 153

THE VOLUNTARY PRINCIPLES ON SECURITY AND HUMAN RIGHTS (text) . . . . . . . 158

Part III: Labour rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

8 International Labour Organization: Tripartite Declaration of
Principles concerning Multinational Enterprises and Social Policy . . 169
TRIPARTITE DECLARATION OF PRINCIPLES CONCERNING MULTINATIONAL
ENTERPRISES AND SOCIAL POLICY (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

9 Social Accountability 8000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

SOCIAL ACCOUNTABILITY 8000 (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

10 Fair Labor Association: Workplace Code of Conduct . . . . . . . . . . . . . . . . 206

WORKPLACE CODE OF CONDUCT (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
PRINCIPLES OF FAIR LABOR AND RESPONSIBLE SOURCING (text) . . . . . . . . . . . . . 212

11 Ethical Trading Initiative: Base Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216

THE ETI BASE CODE (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
ETI PRINCIPLES OF IMPLEMENTATION (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

12 Other major initiatives in the clothing industry . . . . . . . . . . . . . . . . . . . . . 226

The Fair Wear Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Worldwide Responsible Accredited Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
The Worker Rights Consortium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Sustainable Apparel Coalition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227

Part IV: Health issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229

13 ILO Code of Practice on HIV/AIDS and the World of Work . . . . . . . . . . . 230

AN ILO CODE OF PRACTICE ON HIV/AIDS AND THE WORLD OF WORK (text) . . . . . 233

Part V: From environment to sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255

THE BUSINESS CHARTER FOR SUSTAINABLE DEVELOPMENT (text) . . . . . . . . . . . . 258
ECO-MANAGEMENT AND AUDIT SCHEME (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263

14 The Rio Declaration on Environment and Development . . . . . . . . . . . . . 299

RIO DECLARATION ON ENVIRONMENT AND DEVELOPMENT (text) . . . . . . . . . . . . . . 302

viii
 Contents ix

Part VI: Combating corruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307

15 The OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions . . . . . . . . . . . . . . . . . . . . 311
CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN
INTERNATIONAL BUSINESS TRANSACTIONS (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316

16 The Extractive Industries Transparency Initiative . . . . . . . . . . . . . . . . 330

THE EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE (text) . . . . . . . . . . . . . . . 334

17 The Business Principles for Countering Bribery . . . . . . . . . . . . . . . . . . . 336

THE BUSINESS PRINCIPLES FOR COUNTERING BRIBERY (text) . . . . . . . . . . . . . . . . 340

Part VII: Corporate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347

THE KING CODE ON CORPORATE GOVERNANCE FOR SOUTH AFRICA (text) . . . . . 351

18 The OECD Principles of Corporate Governance . . . . . . . . . . . . . . . . . . . . . 378

OECD PRINCIPLES OF CORPORATE GOVERNANCE (text) . . . . . . . . . . . . . . . . . . . . . . . 381

Part VIII: Company codes of conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417

19 Shell’s General Business Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418

SHELL GENERAL BUSINESS PRINCIPLES (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420

20 Johnson & Johnson’s ‘Credo’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424

OUR CREDO (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427

Part IX: Framework and sectoral agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 429

21 Framework agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430

Case study: Global Agreement between the ICEM and Statoil . . . . . . . . . . . . . . . . . . . . . . . . . . 434
AGREEMENT BETWEEN INDUSTRI ENERGI/INDUSTRIALL GLOBAL UNION
AND STATOIL (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437

22 Sectoral agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441

Sectoral agreements: case studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443
The International Cocoa Initiative: Working towards Responsible
Labour Standards for Cocoa Growing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443
Responsible Care® ..................................................... 445
MSC Fishery Standard: Principles and Criteria for Sustainable Fishing . . . . . . . . . . . . . . 446
Forest Stewardship Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447
RESPONSIBLE CARE® GLOBAL CHARTER (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 448

23 The Equator Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449

THE ‘EQUATOR PRINCIPLES’ (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452

24 The Principles for Responsible Investment . . . . . . . . . . . . . . . . . . . . . . . . . 461

THE PRINCIPLES FOR RESPONSIBLE INVESTMENT (text) . . . . . . . . . . . . . . . . . . . . . . 467

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The Corporate Responsibility Code Book

Part X: Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471

25 The Gender Equality Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472

THE SAN FRANCISCO GENDER EQUALITY PRINCIPLES INITIATIVE (text) . . . . . . . . 477
WOMEN’S EMPOWERMENT PRINCIPLES (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482

Part XI: Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489

26 AccountAbility 1000 Series:

AA1000 AccountAbility Principles Standard 2008 . . . . . . . . . . . . . . . . . . . 490
AA1000 ACCOUNTABILITY PRINCIPLES STANDARD 2008 (selected text) . . . . . . . . . 493

27 AccountAbility 1000 Assurance Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . 501

AA1000 ASSURANCE STANDARD (selected text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505

28 The Global Reporting Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516

G4 SUSTAINABILITY REPORTING GUIDELINES (selected text) . . . . . . . . . . . . . . . . . . 522

29 ISO 14001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539

ISO 14001:1996 (selected text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543

Part XII: Visions for the future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549

30 An emerging consensus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550

ISEAL CREDIBILITY PRINCIPLES (text) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553

x
 Foreword
Mark Moody-Stuart

The world of corporate responsibility has evolved considerably since 2003 when
the first edition of Deborah Leipziger's very helpful Corporate Responsibility Code
Book was published as a guide to the many different codes and standards in the
field. The fact that the book is now in its third edition is testament to its useful-
ness. A comparison of the contents list of the first and third editions shows which
codes have become increasingly adopted and which, in spite of the importance of
some of the original codes in shaping corporate approaches, have been superseded
by more comprehensive codes.
Part of the usefulness of this book, whether for a company considering for the
first time how to set foot on the ladder of corporate sustainability or for a company
that is looking to review and advance its current position, is the grouping of codes
in different ways. There is a classification by sector, so that companies—whether
they are a resource company, a textile company or a beverage company—can
quickly see which codes have been developed with their particular sector in mind.
Similarly, a company can view the codes from the perspective of the method of
their development, which stakeholder groups were involved in the development
of the codes, or to which region of the world the code particularly relates. This is
important for any company. When reporting on sustainability performance,
which is an essential part of any corporate responsibility development, a prime
consideration is the various target audiences for such a report: are they internal or
external and is the report aimed at shareholders or consumers? Or some other
group of stakeholders?
Any company will want to develop its own very specific code of conduct. This
book gives examples of a couple of long-established company codes, those of Shell

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The Corporate Responsibility Code Book

and Johnson & Johnson, first developed some 40 and 70 years ago respectively.
This is a very helpful guide and some of the areas covered in these corporate codes
of conduct are timeless. However, a thoughtful company preparing such a code
today might want to add some reference to their approach to taxation and where
taxes are paid, or some reference to remuneration. The Shell code already addresses
the controversial point as to whether or not a company's prime objective is the
maximisation of shareholder value by bringing in the longer-term concept of pro-
tecting the value of the shareholders' investment.
The Code Book makes it clear that developing a robust approach to corporate
responsibility is not just a question of selecting a single code. Depending on its sec-
tor, a company will need to take into account a number of different codes. An over-
arching commitment to, say, the Ten Principles of the UN Global Compact needs
to be fully supported by sound and open reporting of performance on a number of
issues: for example, following a sector supplement of the Global Reporting Initia-
tive (GRI) and taking into account the GRI materiality framework. A resource com-
pany would want to commit to and support the Extractive Industries Transparency
Initiative, and any company operating in the developing world should certainly be
cognisant of the due diligence required under the UN Guiding Principles for Busi-
ness and Human Rights as well as the need for complaints and remedial mecha-
nisms to be in place, as emphasised by John Ruggie in his work. If security is an
issue, the Voluntary Principles on Security and Human Rights will also be an
essential tool. A company is likely also to need to look at what is required to com-
bat corruption and how to work with supply chains.
The Code Book provides an excellent guide and a number of checklists to the
codes in different sectors. In addition to making sure that they have the areas rele-
vant to their industry covered, there are two additional considerations for any
company.
The first is to consider in which area they might like to form an alliance. Civil
society organisations can often provide skills that are not always available to a
commercial organisation and may also help in building trusting relationships
with different stakeholders.
The second is to explore the mechanisms by which confidence can be estab-
lished with stakeholders that the values that are publicly espoused by an organisa-
tion are truly embedded throughout the organisation. This extends to everyone in
the company being familiar with the main points in the codes and the systems
that the company has chosen. Assurance on this can be created by an extensive
programme of site visits and open discussions at internal town-hall-type meetings
in different parts of the world, with discussion of examples of behaviour embody-
ing the company values. Truly independently conducted and professionally
designed global surveys can also contribute to this assurance process.
I commend the Corporate Responsibility Code Book as an excellent starting point
not only for a corporation setting out on a journey towards corporate responsibil-
ity reporting or wishing to check that it has really covered all the bases, but also for
responsible shareholders seeking to steward their investment and to reassure

xii
 Foreword

themselves that companies in which they are invested have adopted the relevant
codes and have embedded appropriate behaviours and standards throughout their
operations.
Sir Mark Moody-Stuart, former Chairman of Anglo American plc 2002–2009;
former Chairman of the Royal Dutch/Shell Group 1991–2001; current Chairman of
Hermes EOS, Director of Saudi Aramco, and Vice Chairman of the UN Global Compact

xiii
 A note to readers

What’s in a name?
As I wrote this book I was constantly reminded of the phrase ‘things are seldom
what they seem’. Corporate responsibility (CR) codes and standards are seldom
what they seem. The reader should be advised that the terminology of CR tools is
still being developed. The terms ‘code’, ‘standard’ and ‘norm’ are often used
interchangeably and imprecisely. Another example of this imprecision is in the use
of the term ‘voluntary’. Although many company codes on labour issues are
described as ‘voluntary’, they often require companies to conform to existing laws.
Even the use of terms such as ‘sustainable development’ and ‘accountability’
within the title of codes and standards can be imprecise. The International Cham-
ber of Commerce (ICC) Charter on Sustainable Development is far more about
environment than sustainable development writ large. Social Accountability 8000
is more about labour rights than social accountability writ large. The field of
corporate responsibility is still evolving and developing its own lingua franca.

Codes are in the eye of the beholder

Much of what is written about CR tools is public relations and marketing—an
attempt to gain more members and attain critical mass. In this book, I seek to break
through the ‘spin’ to objectively describe principles and codes; but, in reading my
descriptions of the strengths and weaknesses of the initiatives, keep in mind that
for some a code might be too rigorous and yet for others the same code might be
too lenient.
This book seeks to provide clarity in a very broad and complex field, by offering
manageable and useful information. The Corporate Responsibility Code Book is a

xiv
 A note to readers

reference guide for companies, non-governmental organisations (NGOs), trade

unions and students. This book will be useful for companies trying to decide
between several different approaches; for NGOs or civil-society groups trying to
decide which codes to lobby companies to adhere to; and for activists, who can use
this volume to call attention to cases where companies are not living up to the
standards that they have committed themselves to in writing. But, mostly, this is a
useful reference book to check what issues are included in which tools, and which
are absent. Each profile is meant to stand alone so in some cases there may be some
repetition.
It has been a challenge to narrow the field from the thousands of codes and stan-
dards into 37 key tools. There are a great many useful tools that are not included
here but that may be included in a future edition. Another challenge has been to
describe a constantly moving target, as each of the initiatives described herein are
evolving.

Deborah Leipziger

xv
 Acknowledgements

This book is based on interviews with a wide range of experts from various coun-
tries and sectors. I am grateful to the following people for their time and wisdom:

Adrian Henriques Dorothy Mackenzie

Shareen Hertel Andrew Wilson
Geoffrey Chandler Katherine Hagen
Gemma Crijns Reino Fridh
Laura Donovan David Vidal
John Elkington Anita Normark
Jan Jonker Eileen Kaufman
Hilary Sutcliffe Sumi Dhanarajan
Deborah Smith Jane Nelson
Rory Sullivan Mark Wade
Simone de Colle Allen White
Malcolm McIntosh

In the 15 years since I began work on the first edition of the Code Book, hundreds
of people have been involved in editing, informing and sharing ideas.
I am very grateful to my very dedicated student, Olga Karagiannis, from the Sim-
mons School of Management, for working to update the data from the second edi-
tion.
The following people reviewed drafts of the chapters relating to their organisa-
tions and provided updates and corrections:
Jose I. Alcorta, ISO Heeral Coleman, Fair Labor
Sarah A. Altschuller, Foley Hoag and Association
The Voluntary Principles Susan Cote-Freeman, Transparency
Daniela Bonora, Global Reporting International
Initiative Pamela Duffin, OECD
Doug Cahn, The Cahn Group Esme Gibbins, Ethical Trading
Initiative

xvi
 Acknowledgements

Claire Hart, AccountAbility Andrew Korfhage, Fair Labor

Adrian Henriques, Middlesex
University
Debbie Jackson, RCLG
Communications
Bradford Johnson, Responsible
Care, American Chemistry
Council
Georg Kell, The UN Global Compact
Eileen Kohl Kaufman, Social
Accountability International
Association
Isaac Khurgel, Principles for
Responsible Investment
Ann Lehman, San Francisco
Department on the Status of
Women
Shaun Mickus, Johnson & Johnson
John G. Ruggie, Harvard University
Christine Uriarte, OECD

I also want to thank the standard-setters who have allowed Greenleaf Publishing
to reproduce the standards in this volume. Each of the standard-setters was invited
to comment on the introductory remarks that precede its principles, code or stan-
dard. I am grateful to them for their feedback.
I am grateful to the team at Greenleaf for their patience: John Stuart, Claire Jackson,
Dean Bargh and Rebecca Marsh.

xvii
Q Taylor & Francis
~ Taylor & Francis Group
http://taylora n dfra ncis.com
 Introduction

There is no single code or standard, no panacea that will lead to corporate respon-
sibility. Each company is different, with its own challenges, corporate culture,
unique set of stakeholders and management systems. Corporate responsibility is a
journey for which there is no single map but hundreds of guides. Codes and
standards are maps that can be combined in new ways for different journeys. In my
lectures around the world, I am asked the question, ‘What are the best standards
for companies seeking to be socially responsible?’ Over the course of more than a
decade, I have analysed hundreds of codes of conduct and standards to answer that
question. This book is a result of 15 years of inquiry into corporate responsibility.
The Corporate Responsibility Code Book is a guide for companies trying to under-
stand the landscape of corporate responsibility. This book is a valuable tool not
only for companies developing their own code but also for companies with a
strong track record in corporate responsibility, seeking to understand the inter-
relationships among codes and standards in order to create their own vision.
Companies are seeking to integrate codes of conduct and guidelines into their
corporate cultures and management systems. The challenge for corporate respon-
sibility is that each company is different; each sector has different priorities. The
very same company in one region may face different challenges in other parts of
the world. And yet stakeholders, especially consumers and investors, are keen for
some degree of comparability with which they can evaluate corporate perfor-
mance. There are countervailing forces at work within corporate responsibility: on
the one hand is the need for convergence to simplify the large numbers of codes
and standards; and on the other hand there is the need to foster diversity and
innovation.

1
The Corporate Responsibility Code Book

Code paradoxes
It is a paradox that many of the best codes of conduct and standards are not well
known and that some corporate responsibility instruments that are well dissemi-
nated are not terribly effective. The purpose of this book is to disseminate some of
the best corporate responsibility instruments available and to comment on their
role. Another paradox is that it is possible to have comprehensive codes of conduct
that achieve nothing, and quite vague codes of conduct that are well embedded
into the organisation and that foster innovation and change.
Information overload is nowhere more apparent than in the field of corporate
responsibility. There are millions of pages and web pages written on codes and
standards, but most of it is ‘spin’ put out by organisations punting to sell their code or
standard. The reality is that corporate responsibility is an emerging field, a new terrain
for which maps are much needed but often imprecise. Just as the early cartographers
drew imaginary creatures on their maps when they came up against the edge of what
they knew, there is much terra incognita in the field of corporate responsibility. The
weaving together of codes and standards in this volume points out the terra incognita,
the vacuums within corporate responsibility, and also the duplication.

The need for a code book

In my consulting practice I advise companies about codes of conduct and their
implementation. On many occasions I am brought in after a company has already
developed a policy or code and disseminated it. Disseminating a code that is poorly
crafted can lead to confusion and inefficiency, causing a ‘domino effect’ of mis-
understanding and apathy.
My clients ask, ‘What is the difference between Social Accountability 8000®
[SA8000®] and AccountAbility 1000 [AA1000]? Which should I use?’ The answer is
that each code and standard is a product of the organisation that crafted it and that
each of the 37 codes in this book offer valuable lessons in corporate responsibility.
There is no Holy Grail in the field of corporate responsibility, only different
approaches and views of the field. The Corporate Responsibility Code Book distils the
most valuable elements of each corporate responsibility instrument in a balanced
and concise way.
The Corporate Responsibility Code Book will guide companies through a critical
turning point in the field of social responsibility, from rhetoric to action on codes
of conduct. The goal of the book is to help companies select, develop and imple-
ment social and environmental codes of conduct. One of the first steps a company
can take to become more socially responsible is to adopt a code of conduct—but
taking this step without clear implementation strategies leaves companies
exposed. This book will demonstrate how the world’s leading companies are imple-
menting global codes of conduct, including the Global Compact of the United
Nations, the Guidelines for Multinational Enterprises of the Organisation for Eco-
nomic Co-operation and Development (OECD), SA8000® and AA1000. The codes in

2
 Introduction

this book cover a wide range of issues, including human rights, labour rights,
environmental management, corruption and corporate governance. This book
also includes ‘how-to’ (or ‘process’) codes focusing on reporting, stakeholder
engagement and assurance.
Albert Einstein wrote that ‘Not everything that counts can be counted; and not
everything that can be counted counts.’1 This sentence provides a useful com-
mentary on codes of conduct and principles and a useful refrain for readers who
should question the tools presented in this volume. Do these tools allow an organ-
isation to count and consider what is most relevant in its sector, to its stakeholders?
Do the tools count that which does not need to be counted?
The instruments and tools described in this book can be seen as a dialogue between
different actors in society. As the book indicates, there have been several waves of
dialogue, from the 1970s, in which multinational companies were seen as the enemy
to be tamed, to the 1990s where a number of leading companies became far more
engaged in a process of dialogue with stakeholders. The codes and principles
described in this work have served to institutionalise dialogue and to create fora for
discussion among actors who had never been in discussion or between whom there
was hostility. It may well be that these dialogues are the most significant contribution
of these tools, and yet such contributions cannot be ‘counted’.
In this book, I will answer the following questions:
l What distinguishes an outstanding code of conduct from a mediocre code
of conduct?
l How can we implement an existing code of conduct?

l What are the pitfalls to avoid in implementing the code of conduct?

l How can we build on work already taking place in this field?

Dr Samuel Johnson once said ‘A man may be very sincere in good principles
without having good practice’;2 the same is true for companies. At best, codes of
conduct and standards can promote corporate responsibility, but they can also be
used as a ‘fig leaf’, as an automatic response to deflect criticism. It is ironic that
many of the companies involved in corporate scandals, such as Enron and Royal
Ahold, have excellent statements on social policies. If the corporate responsibility
movement is to progress, it must shun hollow statements.
This book is based on interviews with the standard-setters, with the implemen-
ters of standards, with academics, with activists and with other key stakeholders
from around the world. Each of the standards and codes described has been shared
with the promulgators of the instrument to ensure that the information is as up to
date as possible. To those standards-setters whose standards are not profiled in this
book, I apologise. It is possible that further editions of this book will be published
with additional codes and standards. I welcome your thoughts on emerging
standards that might be useful in such a volume.

1 This quote was featured on the integrityworks website: www.integrityworks.com/about/

about.htm, last accessed 20 April 2010.
2 Boswell, J. (1765) Life of Johnson (G.B. Hills edn; rev. L.F. Powell; New Haven, CT: Yale
University Press, 1765 [1995]): 403.

3
References

Executive summary of corporate

responsibility initiatives

Annan, K. (1999) Speech made by the UN Secretary-General,

Kofi Annan, at the World Economic Forum in Davos,
Switzerland, on 31 January 1999 (www.un.org/News/Press/
docs/1999/19990201.sgsm6881.html).

GRI (Global Reporting Initiative ) (2002) Sustainability

Reporting Guidelines (Boston, MA: GRI).

Jochnick, Chris (2013) ‘A Conversation with John Ruggie’,

International Bar Association, October 2013
(www.ibanet.org/Conferences/JohnRuggie2013.aspx).

Robèrt, K.-H. (2002) The Natural Step Story: Seeding a

Quiet Revolution (Gabriola Island, BC, Canada: New Society
Publishers).

Statoil (undated) The Exchange of Information and the

Development of Good Working Practice within Statoil
Worldwide Operations (submission to the Global Compact
Learning Forum; Stavanger, Norway: Statoil).
1 Values, principles, norms, codes and
standards

American College Dictionary (1970) The American College

Dictionary (New York: Random House).

Concise Oxford Dictionary (1995) The Concise Oxford

Dictionary (Oxford, UK: Clarendon Press, 9th edn).

Leipziger, D. (2001) SA8000: The Definitive Guide to the

New Social Standard (London: FT).

Paine, L., R. Deshpande, J. Margolis and K.E. Bettcher

(2005) ‘Up to Code: Does Your Company’s Conduct Meet
World-Class Standards?’, Harvard Business Review, December
2005.

Smith, D. (2002) Demonstrating Corporate Values: Which

Standard for your Company? (London: Institute of Business
Ethics).

World Bank (2003) Terms of Reference: Study of Options for

Strengthening CSR Implementation among Suppliers in Global
Supply Chains (Washington, DC: World Bank Group, 25 March
2003).
2 The OECD Guidelines for Multinational
Enterprises

Dreyfus, C. (2001) ‘Enhancing the Contribution of the OECD

Guidelines for Multinational Enterprises: Lessons to be
Learned’, in OECD Annual Report 2001 (Paris: OECD): 120.

Habbard, A.C. (2001) ‘The Integration of Human Rights in

Corporate Principles: OECD

Guidelines for Multinational Enterprises: Global

Instruments for Corporate Responsi

bility’, in OECD Annual Report 2001 (Paris: OECD): 101.

OECD (Organisation for Economic Co-operation and

Development) (2000) OECD Declaration

on International Investment and Multinational Enterprises

(Paris: OECD, 27 June 2000).

—— (2001) ‘OECD Guidelines for Multinational Enterprises:

Global Instruments for Corpo

rate Responsibility’, in OECD Annual Report 2001 (Paris:

OECD): 17.

—— (2002) OECD Guidelines for Multinational Enterprises:

Global Instruments for Corporate

Responsibility (Paris: OECD).

—— (2013) OECD Guidelines for Multinational Enterprises:

Responsible Business Conduct Matters

(Paris: OECD).

—— Annual reports on the OECD Guidelines for Multinational

Enterprises (Paris: OECD;

http://mneguidelines.oecd.org/annualreportsontheguidelines.html).

Additional resources

Websites

OECD (Organisation for Economic Co-operation and

Development): www.oecd.org.
OECD Guidelines for Multinational Enterprises:
http://mneguidelines.oecd.org.

Note: The Guidelines website provides access to all

information relating to the Guidelines and

their implementation, including a database of specific

instances and access to the work of

National Contact Points. Many National Contact Points have

developed handbooks for

implementation of the Guidelines. These range from simple

to very in-depth guides. The OECD Guidelines for
Multinational Enterprises

PART I: OECD GUIDELINES FOR MULTINATIONAL ENTERPRISES

Recommendations for responsible business conduct in a

global context

Preface

1. The OECD Guidelines for Multinational Enterprises (the

Guidelines) are recommendations addressed by governments to
multinational enterprises. The Guidelines aim to ensure
that the operations of these enterprises are in harmony
with government policies, to strengthen the basis of mutual
confidence between enterprises and the societies in which
they operate, to help improve the foreign investment
climate and to enhance the contribution to sustainable
development made by multinational enterprises. The
Guidelines are part of the OECD Declaration on
International Investment and Multinational Enterprises the
other elements of which relate to national treatment,
conflicting requirements on enterprises, and international
investment incentives and disincentives. The Guidelines
provide voluntary principles and standards for responsible
business conduct consistent with applicable laws and
internationally recognised standards. However, the
countries adhering to the Guidelines make a binding
commitment to implement them in accordance with the
Decision of the OECD Council on the OECD Guidelines for
Multinational Enterprises . Furthermore, matters covered by
the Guidelines may also be the subject of national law and
international commitments.

2. International business has experienced far-reaching

structural change and the Guidelines themselves have
evolved to reflect these changes. With the rise of service
and knowledge-intensive industries and the expansion of the
Internet economy, service and technology enterprises are
playing an increasingly important role in the international
marketplace. Large enterprises still account for a major
share of international investment, and there is a trend
toward large-scale international mergers. At the same time,
foreign investment by small- and

* OECD (2011), OECD Guidelines for Multinational

Enterprises, 2011 Edition, OECD Publishing;
www.oecd.org/corporate/mne. * medium-sized enterprises has
also increased and these enterprises now play a significant
role on the international scene. Multinational enterprises,
like their domestic counterparts, have evolved to encompass
a broader range of business arrangements and organisational
forms. Strategic alliances and closer relations with
suppliers and contractors tend to blur the boundaries of
the enterprise.

3. The rapid evolution in the structure of multinational

enterprises is also reflected in their operations in the
developing world, where foreign direct investment has grown
rapidly. In developing countries, multinational enterprises
have diversified beyond primary production and extractive
industries into manufacturing, assembly, domestic market
development and services. Another key development is the
emergence of multinational enterprises based in developing
countries as major international investors.

4. The activities of multinational enterprises, through

international trade and investment, have strengthened and
deepened the ties that join the countries and regions of
the world. These activities bring substantial benefits to
home and host countries. These benefits accrue when
multinational enterprises supply the products and services
that consumers want to buy at competitive prices and when
they provide fair returns to suppliers of capital. Their
trade and investment activities contribute to the efficient
use of capital, technology and human and natural resources.
They facilitate the transfer of technology among the
regions of the world and the development of technologies
that reflect local conditions. Through both formal training
and on-the-job learning enterprises also promote the
development of human capital and creating employment
opportunities in host countries.

5. The nature, scope and speed of economic changes have

presented new strategic challenges for enterprises and
their stakeholders. Multinational enterprises have the
opportunity to implement best practice policies for
sustainable development that seek to ensure coherence
between economic, environmental and social objectives. The
ability of multinational enterprises to promote sustainable
development is greatly enhanced when trade and investment
are conducted in a context of open, competitive and
appropriately regulated markets.

6. Many multinational enterprises have demonstrated that

respect for high standards of business conduct can enhance
growth. Today’s competitive forces are intense and
multinational enterprises face a variety of legal, social
and regulatory settings. In this context, some enterprises
may be tempted to neglect appropriate principles and
standards of conduct in an attempt to gain undue
competitive advantage. Such practices by the few may call
into question the reputation of the many and may give rise
to public concerns.

7. Many enterprises have responded to these public concerns

by developing internal programmes, guidance and management
systems that underpin their commitment to good corporate
citizenship, good practices and good business and employee
conduct. Some of them have called upon consulting, auditing
and certification services, contributing to the
accumulation of expertise in these areas. Enterprises have
also promoted social dialogue on what constitutes
responsible business conduct and have worked with
stakeholders, including in the context of multi-stakeholder
initiatives, to develop guidance for responsible business
conduct. The Guidelines clarify the shared expectations
for business conduct of the governments adhering to them
and provide a point of reference for enterprises and for
other stakeholders. Thus, the Guidelines both complement
and reinforce private efforts to define and implement
responsible business conduct.

8. Governments are co-operating with each other and with

other actors to strengthen the international legal and
policy framework in which business is conducted. The start
of this process can be dated to the work of the
International Labour Organization in the early twentieth
century. The adoption by the United Nations in 1948 of the
Universal Declaration of Human Rights was another landmark
event. It was followed by the ongoing development of
standards relevant for many areas of responsible business
conduct – a process that continues to this day. The OECD
has contributed in important ways to this process through
the development of standards covering such areas as the
environment, the fight against corruption, consumer
interests, corporate governance and taxation.

9. The common aim of the governments adhering to the

Guidelines is to encourage the positive contributions that
multinational enterprises can make to economic,
environmental and social progress and to minimise the
difficulties to which their various operations may give
rise. In working towards this goal, governments find
themselves in partnership with the many businesses, trade
unions and other nongovernmental organisations that are
working in their own ways toward the same end. Governments
can help by providing effective domestic policy frameworks
that include stable macroeconomic policy, non-
discriminatory treatment of enterprises, appropriate
regulation and prudential supervision, an impartial system
of courts and law enforcement and efficient and honest
public administration. Governments can also help by
maintaining and promoting appropriate standards and
policies in support of sustainable development and by
engaging in ongoing reforms to ensure that public sector
activity is efficient and effective. Governments adhering
to the Guidelines are committed to continuous improvement
of both domestic and international policies with a view to
improving the welfare and living standards of all people.

I. Concepts and Principles

1. The Guidelines are recommendations jointly addressed by

governments to multinational enterprises. They provide
principles and standards of good practice consistent with
applicable laws and internationally recognised standards.
Observance of the Guidelines by enterprises is voluntary
and not legally enforceable . Nevertheless, some matters
covered by the Guidelines may also be regulated by national
law or international commitments.

2. Obeying domestic laws is the first obligation of

enterprises. The Guidelines are not a substitute for nor
should they be considered to override domestic law and
regulation. While the Guidelines extend beyond the law in
many cases, they should not and are not intended to place
an enterprise in situations where it faces conflicting
requirements. However, in countries where domestic laws and
regulations conflict with the principles and standards of
the Guidelines, enterprises should seek ways to honour
such principles and standards to the fullest extent which
does not place them in violation of domestic law.

3. Since the operations of multinational enterprises extend

throughout the world, international co-operation in this
field should extend to all countries. Governments adhering
to the Guidelines encourage the enterprises operating on
their territories to observe the Guidelines wherever they
operate, while taking into account the particular
circumstances of each host country.

4. A precise definition of multinational enterprises is not

required for the purposes of the Guidelines. These
enterprises operate in all sectors of the economy. They
usually comprise companies or other entities established in
more than one country and so linked that they may co-
ordinate their operations in various ways. While one or
more of these entities may be able to exercise a
significant influence over the activities of others, their
degree of autonomy within the enterprise may vary widely
from one multinational enterprise to another. Ownership may
be private, State or mixed. The Guidelines are addressed
to all the entities within the multinational enterprise
(parent companies and/or local entities). According to the
actual distribution of responsibilities among them, the
different entities are expected to co-operate and to assist
one another to facilitate observance of the Guidelines.

5. The Guidelines are not aimed at introducing differences

of treatment between multinational and domestic
enterprises; they reflect good practice for all.
Accordingly, multinational and domestic enterprises are
subject to the same expectations in respect of their
conduct wherever the Guidelines are relevant to both.

6. Governments wish to encourage the widest possible

observance of the Guidelines. While it is acknowledged that
small- and medium-sized enterprises may not have the same
capacities as larger enterprises, governments adhering to
the Guidelines nevertheless encourage them to observe the
Guidelines’ recommendations to the fullest extent possible.

7. Governments adhering to the Guidelines should not use

them for protectionist purposes nor use them in a way that
calls into question the comparative advantage of any
country where multinational enterprises invest.

8. Governments have the right to prescribe the conditions

under which multinational enterprises operate within their
jurisdictions, subject to international law. The entities
of a multinational enterprise located in various countries
are subject to the laws applicable in these countries. When
multinational enterprises are subject to conflicting
requirements by adhering countries or third countries, the
governments concerned are encouraged to co-operate in good
faith with a view to resolving problems that may arise.

9. Governments adhering to the Guidelines set them forth

with the understanding that they will fulfil their
responsibilities to treat enterprises equitably and in
accordance with international law and with their
contractual obligations.

10. The use of appropriate international dispute settlement

mechanisms, including arbitration, is encouraged as a means
of facilitating the resolution of legal problems arising
between enterprises and host country governments.

11. Governments adhering to the Guidelines will implement

them and encourage their use. They will establish National
Contact Points that promote the Guidelines and act as a
forum for discussion of all matters relating to the
Guidelines. The adhering Governments will also participate
in appropriate review and consultation procedures to
address issues concerning interpretation of the Guidelines
in a changing world.

II. General Policies

Enterprises should take fully into account established

policies in the countries in

which they operate, and consider the views of other

stakeholders. In this regard:

A. Enterprises should:

1. Contribute to economic, environmental and social

progress with a view to achieving sustainable development.

2. Respect the internationally recognised human rights of

those affected by their activities.

3. Encourage local capacity building through close

co-operation with the local community, including business
interests, as well as developing the enterprise’s
activities in domestic and foreign markets, consistent with
the need for sound commercial practice.

4. Encourage human capital formation, in particular by

creating employment opportunities and facilitating training
opportunities for employees.

5. Refrain from seeking or accepting exemptions not

contemplated in the statutory or regulatory framework
related to human rights, environmental, health, safety,
labour, taxation, financial incentives, or other issues.

6. Support and uphold good corporate governance principles

and develop and apply good corporate governance practices,
including throughout enterprise groups.

7. Develop and apply effective self-regulatory practices

and management systems that foster a relationship of
confidence and mutual trust between enterprises and the
societies in which they operate.

8. Promote awareness of and compliance by workers employed

by multinational enterprises with respect to company
policies through appropriate dissemination of these
policies, including through training programmes.

9. Refrain from discriminatory or disciplinary action

against workers who make bona fide reports to management
or, as appropriate, to the competent public authorities, on
practices that contravene the law, the Guidelines or the
enterprise’s policies.

10. Carry out risk-based due diligence, for example by

incorporating it into their enterprise risk management
systems, to identify, prevent and mitigate actual and
potential adverse impacts as described in paragraphs 11 and
12, and account for how these impacts are addressed. The
nature and extent of due diligence depend on the
circumstances of a particular situation.

11. Avoid causing or contributing to adverse impacts on

matters covered by the Guidelines, through their own
activities, and address such impacts when they occur.

12. Seek to prevent or mitigate an adverse impact where

they have not contributed to that impact, when the impact
is nevertheless directly linked to their operations,
products or services by a business relationship. This is
not intended to shift responsibility from the entity
causing an adverse impact to the enterprise with which it
has a business relationship.

13. In addition to addressing adverse impacts in relation

to matters covered by the Guidelines, encourage, where
practicable, business partners, including suppliers and
sub-contractors, to apply principles of responsible
business conduct compatible with the Guidelines.

14. Engage with relevant stakeholders in order to provide

meaningful opportunities for their views to be taken into
account in relation to planning and decision making for
projects or other activities that may significantly impact
local communities.

15. Abstain from any improper involvement in local

political activities.

Enterprises are encouraged to:

1. Support, as appropriate to their circumstances,

cooperative efforts in the appropriate fora to promote
Internet Freedom through respect of freedom of expression,
assembly and association online.

2. Engage in or support, where appropriate, private or

multi-stakeholder initiatives and social dialogue on
responsible supply chain management while ensuring that
these initiatives take due account of their social and
economic effects on developing countries and of existing
internationally recognised standards.

III. Disclosure

1. Enterprises should ensure that timely and accurate

information is disclosed on all material matters regarding
their activities, structure, financial situation,
performance, ownership and governance. This information
should be disclosed for the enterprise as a whole, and,
where appropriate, along business lines or geographic
areas. Disclosure policies of enterprises should be
tailored to the nature, size and location of the
enterprise, with due regard taken of costs, business
confidentiality and other competitive concerns.

3. Disclosure policies of enterprises should include, but

not be limited to, material information on: a) the
financial and operating results of the enterprise; b)
enterprise objectives; c) major share ownership and voting
rights, including the structure of a group of enterprises
and intra-group relations, as well as control enhancing
mechanisms; d) remuneration policy for members of the board
and key executives, and information about board members,
including qualifications, the selection process, other
enterprise directorships and whether each board member is
regarded as independent by the board; e) related party
transactions; f) foreseeable risk factors; g) issues
regarding workers and other stakeholders; h) governance
structures and policies, in particular, the content of any
corporate governance code or policy and its implementation
process.

3. Enterprises are encouraged to communicate additional

information that could include: a) value statements or
statements of business conduct intended for public
disclosure including, depending on its relevance for the
enterprise’s activities, information on the enterprise’s
policies relating to matters covered by the Guidelines; a)
policies and other codes of conduct to which the enterprise
subscribes, their date of adoption and the countries and
entities to which such statements apply; a) its performance
in relation to these statements and codes; a) information
on internal audit, risk management and legal compliance
systems; a) information on relationships with workers and
other stakeholders.

4. Enterprises should apply high quality standards for

accounting, and financial as well as non-financial
disclosure, including environmental and social reporting
where they exist. The standards or policies under which
information is compiled and published should be reported.
An annual audit should be conducted by an independent,
competent and qualified auditor in order to provide an
external and objective assurance to the board and
shareholders that the financial statements fairly represent
the financial position and performance of the enterprise in
all material respects.

IV. Human Rights

States have the duty to protect human rights. Enterprises

should, within the frame

work of internationally recognised human rights, the

international human rights

obligations of the countries in which they operate as well

as relevant domestic laws

and regulations:

1. Respect human rights, which means they should avoid

infringing on the human rights of others and should address
adverse human rights impacts with which they are involved.

2. Within the context of their own activities, avoid

causing or contributing to adverse human rights impacts and
address such impacts when they occur.

3. Seek ways to prevent or mitigate adverse human rights

impacts that are directly linked to their business
operations, products or services by a business
relationship, even if they do not contribute to those
impacts.

4. Have a policy commitment to respect human rights.

5. Carry out human rights due diligence as appropriate to

their size, the nature and context of operations and the
severity of the risks of adverse human rights impacts.

6. Provide for or co-operate through legitimate processes

in the remediation of adverse human rights impacts where
they identify that they have caused or contributed to these
impacts.

V. Employment and Industrial Relations

Enterprises should, within the framework of applicable law,

regulations and

prevailing labour relations and employment practices and

applicable international

labour standards:

1. a) Respect the right of workers employed by the

multinational enterprise to establish or join trade unions
and representative organisations of their own choosing. b)
Respect the right of workers employed by the multinational
enterprise to have trade unions and representative
organisations of their own choosing recognised for the
purpose of collective bargaining, and engage in
constructive negotiations, either individually or through
employers’ associations, with such representatives with a
view to reaching agreements on terms and conditions of
employment. c) Contribute to the effective abolition of
child labour, and take immediate and effective measures to
secure the prohibition and elimination of the worst forms
of child labour as a matter of urgency. d) Contribute to
the elimination of all forms of forced or compulsory labour
and take adequate steps to ensure that forced or compulsory
labour does not exist in their operations. e) Be guided
throughout their operations by the principle of equality of
opportunity and treatment in employment and not
discriminate against their workers with respect to
employment or occupation on such grounds as race, colour,
sex, religion, political opinion, national extraction or
social origin, or other status, unless selectivity
concerning worker characteristics furthers established
governmental policies which specifically promote greater
equality of employment opportunity or relates to the
inherent requirements of a job.

2. a) Provide such facilities to workers’ representatives

as may be necessary to assist in the development of
effective collective agreements. b) Provide information to
workers’ representatives which is needed for meaningful
negotiations on conditions of employment. b) Provide
information to workers and their representatives which
enables them to obtain a true and fair view of the
performance of the entity or, where appropriate, the
enterprise as a whole.

3. Promote consultation and co-operation between employers

and workers and their representatives on matters of mutual
concern.

4. a) Observe standards of employment and industrial

relations not less favourable than those observed by
comparable employers in the host country. b) When
multinational enterprises operate in developing countries,
where comparable employers may not exist, provide the best
possible wages, benefits and conditions of work, within the
framework of government policies. These should be related
to the economic position of the enterprise, but should be
at least adequate to satisfy the basic needs of the workers
and their families. b) Take adequate steps to ensure
occupational health and safety in their operations.

5. In their operations, to the greatest extent practicable,

employ local workers and provide training with a view to
improving skill levels, in co-operation with worker
representatives and, where appropriate, relevant
governmental authorities.

6. In considering changes in their operations which would

have major employment effects, in particular in the case of
the closure of an entity involving collective layoffs or
dismissals, provide reasonable notice of such changes to
representatives of the workers in their employment and
their organisations, and, where appropriate, to the
relevant governmental authorities, and co-operate with the
worker representatives and appropriate governmental
authorities so as to mitigate to the maximum extent
practicable adverse effects. In light of the specific
circumstances of each case, it would be appropriate if
management were able to give such notice prior to the final
decision being taken. Other means may also be employed to
provide meaningful co-operation to mitigate the effects of
such decisions.

7. In the context of bona fide negotiations with workers’

representatives on conditions of employment, or while
workers are exercising a right to organise, not threaten to
transfer the whole or part of an operating unit from the
country concerned nor transfer workers from the
enterprises’ component entities in other countries in order
to influence unfairly those negotiations or to hinder the
exercise of a right to organise.

8. Enable authorised representatives of the workers in

their employment to negotiate on collective bargaining or
labour-management relations issues and allow the parties to
consult on matters of mutual concern with representatives
of management who are authorised to take decisions on these
matters.

VI. Environment

Enterprises should, within the framework of laws,

regulations and administrative

practices in the countries in which they operate, and in

consideration of relevant

international agreements, principles, objectives, and

standards, take due account of

the need to protect the environment, public health and

safety, and generally to

conduct their activities in a manner contributing to the

wider goal of sustainable

development. In particular, enterprises should:

1. Establish and maintain a system of environmental

management appropriate to the enterprise, including: a)
collection and evaluation of adequate and timely
information regarding the environmental, health, and safety
impacts of their activities; b) establishment of measurable
objectives and, where appropriate, targets for improved
environmental performance and resource utilisation,
including periodically reviewing the continuing relevance
of these objectives; where appropriate, targets should be
consistent with relevant national policies and
international environmental commitments; and c) regular
monitoring and verification of progress toward
environmental, health, and safety objectives or targets.
2. Taking into account concerns about cost, business
confidentiality, and the protection of intellectual
property rights: a) provide the public and workers with
adequate, measureable and verifiable (where applicable) and
timely information on the potential environment, health and
safety impacts of the activities of the enterprise, which
could include reporting on progress in improving
environmental performance; and b) engage in adequate and
timely communication and consultation with the communities
directly affected by the environmental, health and safety
policies of the enterprise and by their implementation.

3. Assess, and address in decision-making, the foreseeable

environmental, health, and safety-related impacts
associated with the processes, goods and services of the
enterprise over their full life cycle with a view to
avoiding or, when unavoidable, mitigating them. Where these
proposed activities may have significant environmental,
health, or safety impacts, and where they are subject to a
decision of a competent authority, prepare an appropriate
environmental impact assessment.

4. Consistent with the scientific and technical

understanding of the risks, where there are threats of
serious damage to the environment, taking also into account
human health and safety, not use the lack of full
scientific certainty as a reason for postponing
cost-effective measures to prevent or minimise such damage.

5. Maintain contingency plans for preventing, mitigating,

and controlling serious environmental and health damage
from their operations, including accidents and emergencies;
and mechanisms for immediate reporting to the competent
authorities.

6. Continually seek to improve corporate environmental

performance, at the level of the enterprise and, where
appropriate, of its supply chain, by encouraging such
activities as: a) adoption of technologies and operating
procedures in all parts of the enterprise that reflect
standards concerning environmental performance in the best
performing part of the enterprise; b) development and
provision of products or services that have no undue
environmental impacts; are safe in their intended use;
reduce greenhouse gas emissions; are efficient in their
consumption of energy and natural resources; can be reused,
recycled, or disposed of safely; c) promoting higher levels
of awareness among customers of the environmental
implications of using the products and services of the
enterprise, including, by providing accurate information on
their products (for example, on greenhouse gas emissions,
biodiversity, resource efficiency, or other environmental
issues); and d) exploring and assessing ways of improving
the environmental performance of the enterprise over the
longer term, for instance by developing strategies for
emission reduction, efficient resource utilisation and
recycling, substitution or reduction of use of toxic
substances, or strategies on biodiversity.

7. Provide adequate education and training to workers in

environmental health and safety matters, including the
handling of hazardous materials and the prevention of
environmental accidents, as well as more general
environmental management areas, such as environmental
impact assessment procedures, public relations, and
environmental technologies.

8. Contribute to the development of environmentally

meaningful and economically efficient public policy, for
example, by means of partnerships or initiatives that will
enhance environmental awareness and protection.

VII. Combating Bribery, Bribe Solicitation and Extortion

Enterprises should not, directly or indirectly, offer,

promise, give, or demand a bribe

or other undue advantage to obtain or retain business or

other improper advantage.

Enterprises should also resist the solicitation of bribes

and extortion. In particular,

enterprises should:

1. Not offer, promise or give undue pecuniary or other

advantage to public officials or the employees of business
partners. Likewise, enterprises should not request, agree
to or accept undue pecuniary or other advantage from public
officials or the employees of business partners.
Enterprises should not use third parties such as agents and
other intermediaries, consultants, representatives,
distributors, consortia, contractors and suppliers and
joint venture partners for channelling undue pecuniary or
other advantages to public officials, or to employees of
their business partners or to their relatives or business
associates.

2. Develop and adopt adequate internal controls, ethics and

compliance programmes or measures for preventing and
detecting bribery, developed on the basis of a risk
assessment addressing the individual circumstances of an
enterprise, in particular the bribery risks facing the
enterprise (such as its geographical and industrial sector
of operation). These internal controls, ethics and
compliance programmes or measures should include a system
of financial and accounting procedures, including a system
of internal controls, reasonably designed to ensure the
maintenance of fair and accurate books, records, and
accounts, to ensure that they cannot be used for the
purpose of bribing or hiding bribery. Such individual
circumstances and bribery risks should be regularly
monitored and re-assessed as necessary to ensure the
enterprise’s internal controls, ethics and compliance
programme or measures are adapted and continue to be
effective, and to mitigate the risk of enterprises becoming
complicit in bribery, bribe solicitation and extortion.

3. Prohibit or discourage, in internal company controls,

ethics and compliance programmes or measures, the use of
small facilitation payments, which are generally illegal in
the countries where they are made, and, when such payments
are made, accurately record these in books and financial
records.

4. Ensure, taking into account the particular bribery risks

facing the enterprise, properly documented due diligence
pertaining to the hiring, as well as the appropriate and
regular oversight of agents, and that remuneration of
agents is appropriate and for legitimate services only.
Where relevant, a list of agents engaged in connection with
transactions with public bodies and State-owned enterprises
should be kept and made available to competent authorities,
in accordance with applicable public disclosure
requirements.

5. Enhance the transparency of their activities in the

fight against bribery, bribe solicitation and extortion.
Measures could include making public commitments against
bribery, bribe solicitation and extortion, and disclosing
the management systems and the internal controls, ethics
and compliance programmes or measures adopted by
enterprises in order to honour these commitments.
Enterprises should also foster openness and dialogue with
the public so as to promote its awareness of and co-
operation with the fight against bribery, bribe
solicitation and extortion.

6. Promote employee awareness of and compliance with

company policies and internal controls, ethics and
compliance programmes or measures against bribery, bribe
solicitation and extortion through appropriate
dissemination of such policies, programmes or measures and
through training programmes and disciplinary procedures.

7. Not make illegal contributions to candidates for public

office or to political parties or to other political
organisations. Political contributions should fully comply
with public disclosure requirements and should be reported
to senior management.

VIII. Consumer Interests

When dealing with consumers, enterprises should act in

accordance with fair

business, marketing and advertising practices and should

take all reasonable steps

to ensure the quality and reliability of the goods and

services that they provide. In

particular, they should:

1. Ensure that the goods and services they provide meet all
agreed or legally required standards for consumer health
and safety, including those pertaining to health warnings
and safety information.

2. Provide accurate, verifiable and clear information that

is sufficient to enable consumers to make informed
decisions, including information on the prices and, where
appropriate, content, safe use, environmental attributes,
maintenance, storage and disposal of goods and services.
Where feasible this information should be provided in a
manner that facilitates consumers’ ability to compare
products.

3. Provide consumers with access to fair, easy to use,

timely and effective nonjudicial dispute resolution and
redress mechanisms, without unnecessary cost or burden.

4. Not make representations or omissions, nor engage in any

other practices, that are deceptive, misleading, fraudulent
or unfair.

5. Support efforts to promote consumer education in areas

that relate to their business activities, with the aim of,
inter alia, improving the ability of consumers to: i) make
informed decisions involving complex goods, services and
markets, ii) better understand the economic, environmental
and social impact of their decisions and iii) support
sustainable consumption.

6. Respect consumer privacy and take reasonable measures to

ensure the security of personal data that they collect,
store, process or disseminate.

7. Co-operate fully with public authorities to prevent and

combat deceptive marketing practices (including misleading
advertising and commercial fraud) and to diminish or
prevent serious threats to public health and safety or to
the environment deriving from the consumption, use or
disposal of their goods and services.

8. Take into consideration, in applying the above

principles, i) the needs of vulnerable and disadvantaged
consumers and ii) the specific challenges that e-commerce
may pose for consumers.

IX. Science and Technology

Enterprises should:

1. Endeavour to ensure that their activities are compatible

with the science and technology (S&T) policies and plans of
the countries in which they operate and as appropriate
contribute to the development of local and national
innovative capacity.

2. Adopt, where practicable in the course of their business

activities, practices that permit the transfer and rapid
diffusion of technologies and know-how, with due regard to
the protection of intellectual property rights.

3. When appropriate, perform science and technology

development work in host countries to address local market
needs, as well as employ host country personnel in an S&T
capacity and encourage their training, taking into account
commercial needs.

4. When granting licenses for the use of intellectual

property rights or when otherwise transferring technology,
do so on reasonable terms and conditions and in a manner
that contributes to the long term sustainable development
prospects of the host country.

5. Where relevant to commercial objectives, develop ties

with local universities, public research institutions, and
participate in co-operative research projects with local
industry or industry associations.

X. Competition

Enterprises should:

1. Carry out their activities in a manner consistent with

all applicable competition laws and regulations, taking
into account the competition laws of all jurisdictions in
which the activities may have anti- competitive effects.

2. Refrain from entering into or carrying out

anti-competitive agreements among competitors, including
agreements to: a) fix prices; b) make rigged bids
(collusive tenders); c) establish output restrictions or
quotas; or d) share or divide markets by allocating
customers, suppliers, territories or lines of commerce.

3. Co-operate with investigating competition authorities

by, among other things and subject to applicable law and
appropriate safeguards, providing responses as promptly and
completely as practicable to requests for information, and
considering the use of available instruments, such as
waivers of confidentiality where appropriate, to promote
effective and efficient co-operation among investigating
authorities.

4. Regularly promote employee awareness of the importance

of compliance with all applicable competition laws and
regulations, and, in particular, train senior management of
the enterprise in relation to competition issues.

XI. Taxation

1. It is important that enterprises contribute to the

public finances of host countries by making timely payment
of their tax liabilities. In particular, enterprises should
comply with both the letter and spirit of the tax laws and
regulations of the countries in which they operate.
Complying with the spirit of the law means discerning and
following the intention of the legislature. It does not
require an enterprise to make payment in excess of the
amount legally required pursuant to such an interpretation.
Tax compliance includes such measures as providing to the
relevant authorities timely information that is relevant or
required by law for purposes of the correct determination
of taxes to be assessed in connection with their operations
and conforming transfer pricing practices to the arm’s
length principle.
2. Enterprises should treat tax governance and tax
compliance as important elements of their oversight and
broader risk management systems. In particular, corporate
boards should adopt tax risk management strategies to
ensure that the financial, regulatory and reputational
risks associated with taxation are fully identified and
evaluated.
3 The UN Global Compact

Annan, K. (1999) Speech made by the UN Secretary-General,

Kofi Annan, at the World Economic Forum in Davos,
Switzerland, 31 January 1999 (www.un.org/News/Press/
docs/1999/19990201.sgsm6881.html).

Ethical Performance (2002) News Alert, 8 April 2002,

www.ethicalperformance.com.

Freedman, A.M., and S. Stecklow (2000) ‘Bottled up: As

Unicef battles baby-formula makers, African infants
sicken’, Wall Street Journal, 12 December 2000: A1.

7 Interview with Georg Kell, 1 July 2009.

HRW (Human Rights Watch) (2000) ‘Business and Human Rights:

The Role of the Inter

national Community’, in World Report 2000 (New York: HRW,

www.hrw.org): 1-2.

ILO (International Labour Organization) (1998) Fundamental

Principles on Rights at Work

(Adopted by the International Labour Conference at its 86th

session, Geneva, 18 June

1988; Geneva: ILO).

McIntosh, M., D. Leipziger and G. Coleman (2003) Living

Corporate Citizenship: Strategic

Routes to Socially Responsible Business (London: FT

Pearson).

Roth, K. (2000) Letter from Human Rights Watch to Kofi

Annan, 28 July 2000, www.hrw.org,

accessed 2003.

Ruggie, J.G. (2002) ‘The Theory and Practice of Learning

Networks: Corporate Social

Responsibility and the Global Compact’, Journal of

Corporate Citizenship 5 (Spring 2002):

27-36.

United Nations (2003) ‘Guide to the Global Compact: A

Practical Understanding of the

Vision and Nine Principles’, United Nations,

www.unglobalcompact.org.

Waddock, S. (2002) ‘Learning from Experience: The UN Global

Compact Learning Forum

2002’, available at www.unglobalcompact.org.

Additional resources

Further reading

Lawrence, Joanne T., and Paul W. Beamish (2012) Managing

According to the UN Global

Compact (The Ivey Casebook Series; Thousand Oaks, CA: Sage

Publications).

McIntosh, M., S. Waddock and G. Kell (2004) Learning to

Talk: The Early Years of the UN Global

Compact (Sheffield, UK: Greenleaf Publishing, 2004).

Rasche, A., and Georg Kell (eds.) (2010 ) The United

Nations Global Compact: Achievements,

Trends and Challenges (Cambridge UK: Cambridge University

Press).

Website

UN Global Compact: www.unglobalcompact.org. This website

contains the following publi

cations online:

l The Comprehensive Guide to the Global Compact

l A Guide to the Global Compact: A Practical Understanding

of the Vision and Nine Principles

l The Global Compact Performance Model

l Reports from Learning Fora

The Global Compact’s Ten Principles *

The UN Global Compact's ten principles in the areas of

human rights, labour, the

environment and anti-corruption enjoy universal consensus

and are derived from:

l The Universal Declaration of Human Rights;

l The International Labour Organization’s Declaration on

Fundamental Principles and Rights at Work

l The Rio Declaration on Environment and Development

l The United Nations Convention Against Corruption

The Global Compact asks companies to embrace, support and

enact, within their

sphere of influence, a set of core values in the areas of

human rights, labour stan

dards, the environment, and anti-corruption:

Human Rights

l Principle 1: Businesses should support and respect the

protection of internationally proclaimed human rights; and

l Principle 2: make sure that they are not complicit in

human rights abuses.

Labour

l Principle 3: Businesses should uphold the freedom of

association and the effective recognition of the right to
collective bargaining;

l Principle 4: the elimination of all forms of forced and

compulsory labour;

l Principle 5: the effective abolition of child labour; and

l Principle 6: the elimination of discrimination in respect

of employment and occupation.

Environment

l Principle 7: Businesses should support a precautionary

approach to environmental challenges;

* Reprinted with the kind permission of the United Nations.

l Principle 8: undertake initiatives to promote greater
environmental responsibility; and

l Principle 9: encourage the development and diffusion of

environmentally friendly technologies.

Anti-Corruption

l Principle 10: Businesses should work against corruption

in all its forms, including extortion and bribery.

The Sustainable Development Goals *

Goal 1 No poverty End poverty in all its forms everywhere

Goal 2 Zero hunger End hunger, achieve food security and

improved nutrition and promote sustainable agriculture

Goal 3 Good health and well-being Ensure healthy lives and

promote well-being for all at all ages

Goal 4 Quality education Ensure inclusive and quality

education for all and promote lifelong learning

Goal 5 Gender equality Achieve gender equality and empower

all women and girls

Goal 6 Clean water and sanitation Ensure access to water

and sanitation for all

Goal 7 Affordable and clean energy Ensure access to

affordable, reliable, sustainable and modern energy for all

Goal 8 Decent work and economic growth Promote inclusive

and sustainable economic growth, employment and decent work
for all

Goal 9 Industry, innovation and infrastructure Build

resilient infrastructure, promote sustainable
industrialization and foster innovation

Goal 10 Reduced inequalities Reduce inequality within and

among countries

Goal 11 Sustainable cities and communities Make cities

inclusive, safe, resilient and sustainable

Goal 12 Responsible consumption and production Ensure

sustainable consumption and production patterns
* Reprinted with the kind permission of the United Nations.

Goal 13 Climate action Take urgent action to combat climate

change and its impacts

Goal 14 Life below water Conserve and sustainably use the

oceans, seas and marine resources

Goal 15 Life on land Sustainably manage forests, combat

desertification, halt and reverse land degradation, halt
biodiversity loss

Goal 16 Peace, justice and strong institutions Promote

just, peaceful and inclusive societies

Goal 17 Partnerships for the goals Revitalize the global

partnership for sustainable development
Part II: Human rights

Frankental, P., and F. House (2001) Human Rights: Is it Any

of Your Business? (London: Amnesty International, and
Prince of Wales Business Leaders’ Forum, April 2001).

Novib (1997) Human Rights and Development: Novib’s

Challenges in the Field of Human Rights (The Hague: Novib,
December 1997).

2 The fundamental labour conventions of the International

Labour Organization (ILO) are discussed in Chapter 8, in
Part III on labour rights.
5 The Universal Declaration of Human
Rights

Avery, C. (1997) ‘Business and Human Rights: Five Common

Misconceptions’, http://198.170. 85.29/Misconceptions.htm,
accessed 2010.

Buergenthal, T. (1998) ‘Centerpiece of the Human Rights

Revolution’, in B. van der Heijden and B. Tahzib-Lie
(eds.), Reflections on the Universal Declaration of Human
Rights: A Fiftieth Anniversary Anthology (Dordrecht,
Netherlands: Martinius Nijhoff): 91-94.

Chandler, G. (2001) ‘Companies and Human Rights: Recent

Developments’, 5 April 2001, http://208.
55.16.210/Chandler-UN-Guidelines.htm, accessed 2003.

IBLF (International Business Leaders’ Forum) (2003)

‘Business and Human Rights’, www.iblf. org, accessed 2003.

Van Boven, T. (1998) ‘A Universal Declaration of Human

Responsibilities?’, in B. van der Heijden and B. Tahzib-Lie
(eds.), Reflections on the Universal Declaration of Human
Rights: A Fiftieth Anniversary Anthology (Dordrecht,
Netherlands: Martinius Nijhoff): 73-79.

Additional resources

Websites

Business and Human Rights Resource Centre:

www.business-humanrights.org

Human Rights and Business Project of the Danish Institute

for Human Rights: www.humanrightsbusiness.org

Universal Declaration of Human Rights: www.udhr.org

8 E-mail to author from Margaret Jungk, Danish Centre for

Human Rights, 8 October 2003.

The Universal Declaration

of Human Rights *

PREAMBLE Whereas recognition of the inherent dignity and of

the equal and inalienable rights of all members of the
human family is the foundation of freedom, justice and
peace in the world, Whereas disregard and contempt for
human rights have resulted in barbarous acts which have
outraged the conscience of mankind, and the advent of a
world in which human beings shall enjoy freedom of speech
and belief and freedom from fear and want has been
proclaimed as the highest aspiration of the common people,
Whereas it is essential, if man is not to be compelled to
have recourse, as a last resort, to rebellion against
tyranny and oppression, that human rights should be
protected by the rule of law, Whereas it is essential to
promote the development of friendly relations between
nations, Whereas the peoples of the United Nations have in
the Charter reaffirmed their faith in fundamental human
rights, in the dignity and worth of the human person and in
the equal rights of men and women and have determined to
promote social progress and better standards of life in
larger freedom, Whereas Member States have pledged
themselves to achieve, in co-operation with the United
Nations, the promotion of universal respect for and
observance of human rights and fundamental freedoms,
Whereas a common understanding of these rights and freedoms
is of the greatest importance for the full realization of
this pledge,

Now, Therefore THE GENERAL ASSEMBLY proclaims THIS

UNIVERSAL DECLARATION OF

HUMAN RIGHTS as a common standard of achievement for all

peoples and all nations,

* Reprinted with the kind permission of the United Nations.

to the end that every individual and every organ of

society, keeping this Declaration

constantly in mind, shall strive by teaching and education

to promote respect for these

rights and freedoms and by progressive measures, national

and international, to

secure their universal and effective recognition and

observance, both among the

peoples of Member States themselves and among the peoples

of territories under

their jurisdiction.

Article 1. All human beings are born free and equal in

dignity and rights. They are endowed with reason and
conscience and should act towards one another in a spirit
of brotherhood.

Article 2. Everyone is entitled to all the rights and

freedoms set forth in this Declaration, without distinction
of any kind, such as race, colour, sex, language, religion,
political or other opinion, national or social origin,
property, birth or other status. Furthermore, no
distinction shall be made on the basis of the political,
jurisdictional or international status of the country or
territory to which a person belongs, whether it be
independent, trust, non-self-governing or under any other
limitation of sovereignty.

Article 3. Everyone has the right to life, liberty and

security of person.

Article 4. No one shall be held in slavery or servitude;

slavery and the slave trade shall be prohibited in all
their forms.

Article 5. No one shall be subjected to torture or to

cruel, inhuman or degrading treatment or punishment.

Article 6. Everyone has the right to recognition everywhere

as a person before the law.

Article 7. All are equal before the law and are entitled
without any discrimination to equal protection of the law.
All are entitled to equal protection against any
discrimination in violation of this Declaration and against
any incitement to such discrimination.

Article 8. Everyone has the right to an effective remedy by

the competent national tribunals for acts violating the
fundamental rights granted him by the constitution or by
law.

Article 9. No one shall be subjected to arbitrary arrest,

detention or exile.

Article 10. Everyone is entitled in full equality to a fair

and public hearing by an independent and impartial
tribunal, in the determination of his rights and
obligations and of any criminal charge against him.

Article 11. (1) Everyone charged with a penal offence has

the right to be presumed innocent until proved guilty
according to law in a public trial at which he has had all
the guarantees necessary for his defence. (2) No one shall
be held guilty of any penal offence on account of any act
or omission which did not constitute a penal offence, under
national or international law, at the time when it was
committed. Nor shall a heavier penalty be imposed than the
one that was applicable at the time the penal offence was
committed.

Article 12. No one shall be subjected to arbitrary

interference with his privacy, family, home or
correspondence, nor to attacks upon his honour and
reputation. Everyone has the right to the protection of the
law against such interference or attacks.

Article 13. (1) Everyone has the right to freedom of

movement and residence within the borders of each state.
(2) Everyone has the right to leave any country, including
his own, and to return to his country.

Article 14. (1) Everyone has the right to seek and to enjoy
in other countries asylum from persecution. (2) This right
may not be invoked in the case of prosecutions genuinely
arising from non-political crimes or from acts contrary to
the purposes and principles of the United Nations.

Article 15. (1) Everyone has the right to a nationality.

(2) No one shall be arbitrarily deprived of his nationality
nor denied the right to change his nationality.

Article 16. (1) Men and women of full age, without any
limitation due to race, nationality or religion, have the
right to marry and to found a family. They are entitled to
equal rights as to marriage, during marriage and at its
dissolution. (2) Marriage shall be entered into only with
the free and full consent of the intending spouses. (3) The
family is the natural and fundamental group unit of society
and is entitled to protection by society and the State.

Article 17. (1) Everyone has the right to own property

alone as well as in association with others. (2) No one
shall be arbitrarily deprived of his property.

Article 18. Everyone has the right to freedom of thought,

conscience and religion; this right includes freedom to
change his religion or belief, and freedom, either alone or
in community with others and in public or private, to
manifest his religion or belief in teaching, practice,
worship and observance.

Article 19. Everyone has the right to freedom of opinion

and expression; this right includes freedom to hold
opinions without interference and to seek, receive and
impart information and ideas through any media and
regardless of frontiers.

Article 20. (1) Everyone has the right to freedom of

peaceful assembly and association. (2) No one may be
compelled to belong to an association.

Article 21. (1) Everyone has the right to take part in the
government of his country, directly or through freely
chosen representatives. (2) Everyone has the right of equal
access to public service in his country. (3) The will of
the people shall be the basis of the authority of
government; this will shall be expressed in periodic and
genuine elections which shall be by universal and equal
suffrage and shall be held by secret vote or by equivalent
free voting procedures.

Article 22. Everyone, as a member of society, has the right

to social security and is entitled to realization, through
national effort and international co-operation and in
accordance with the organization and resources of each
State, of the economic, social and cultural rights
indispensable for his dignity and the free development of
his personality.

Article 23. (1) Everyone has the right to work, to free

choice of employment, to just and favourable conditions of
work and to protection against unemployment. (2) Everyone,
without any discrimination, has the right to equal pay for
equal work. (3) Everyone who works has the right to just
and favourable remuneration ensuring for himself and his
family an existence worthy of human dignity, and
supplemented, if necessary, by other means of social
protection. (4) Everyone has the right to form and to join
trade unions for the protection of his interests.

Article 24. Everyone has the right to rest and leisure,

including reasonable limitation of working hours and
periodic holidays with pay.

Article 25. (1) Everyone has the right to a standard of

living adequate for the health and wellbeing of himself and
of his family, including food, clothing, housing and
medical care and necessary social services, and the right
to security in the event of unemployment, sickness,
disability, widowhood, old age or other lack of livelihood
in circumstances beyond his control. (2) Motherhood and
childhood are entitled to special care and assistance. All
children, whether born in or out of wedlock, shall enjoy
the same social protection.
Article 26. (1) Everyone has the right to education.
Education shall be free, at least in the elementary and
fundamental stages. Elementary education shall be
compulsory. Technical and professional education shall be
made generally available and higher education shall be
equally accessible to all on the basis of merit. (2)
Education shall be directed to the full development of the
human personality and to the strengthening of respect for
human rights and fundamental freedoms. It shall promote
understanding, tolerance and friendship among all nations,
racial or religious groups, and shall further the
activities of the United Nations for the maintenance of
peace. (3) Parents have a prior right to choose the kind of
education that shall be given to their children.

Article 27. (1) Everyone has the right freely to

participate in the cultural life of the community, to enjoy
the arts and to share in scientific advancement and its
benefits. (2) Everyone has the right to the protection of
the moral and material interests resulting from any
scientific, literary or artistic production of which he is
the author.

Article 28. Everyone is entitled to a social and

international order in which the rights and freedoms set
forth in this Declaration can be fully realized.

Article 29. (1) Everyone has duties to the community in

which alone the free and full development of his
personality is possible. (2) In the exercise of his rights
and freedoms, everyone shall be subject only to such
limitations as are determined by law solely for the purpose
of securing due recognition and respect for the rights and
freedoms of others and of meeting the just requirements of
morality, public order and the general welfare in a
democratic society. (3) These rights and freedoms may in no
case be exercised contrary to the purposes and principles
of the United Nations.

Article 30. Nothing in this Declaration may be interpreted

as implying for any State, group or person any right to
engage in any activity or to perform any act aimed at the
destruction of any of the rights and freedoms set forth
herein.
6 The Guiding Principles on Business and
Human Rights

Office of the High Commissioner, United Nations (2011)

‘Guiding Principles on Business and Human Rights:
Implementing the United Nations “Protect, Respect, and
Remedy” Framework’ (New York and Geneva, 2011).

Ruggie, John Gerard (2013) Just Business: Multinational

Corporations and Human Rights (New York: W.W. Norton).

SOMO (Mariette van Huijstee), CEDHA (Victor Ricco), and

Cividep (Laura CeresnaChaturvedi) (2012) ‘How to use the UN
Guiding Principles on Business and Human Rights in Company
Research and Advocacy: A Guide for Civil Society’, November
2012.

The Guiding Principles on

Business and Human Rights *

I. THE STATE DUTY TO PROTECT HUMAN RIGHTS

A. FOUNDATIONAL PRINCIPLES

1. States must protect against human rights abuse within

their territory and/or

jurisdiction by third parties, including business

enterprises. This requires taking

appropriate steps to prevent, investigate, punish and

redress such abuse through

effective policies, legislation, regulations and

adjudication.

2. States should set out clearly the expectation that all

business enterprises

domiciled in their territory and/or jurisdiction respect

human rights throughout their

operations.

B. OPERATIONAL PRINCIPLES

GENERAL STATE REGULATORY AND POLICY FUNCTIONS

3. In meeting their duty to protect, States should: (a)

Enforce laws that are aimed at, or have the effect of,
requiring business enterprises to respect human rights, and
periodically to assess the adequacy of such laws and
address any gaps; (b) Ensure that other laws and policies
governing the creation and ongoing operation of business
enterprises, such as corporate law, do not constrain but
enable business respect for human rights; (c) Provide
effective guidance to business enterprises on how to
respect human rights throughout their operations; (d)
Encourage, and where appropriate require, business
enterprises to communicate how they address their human
rights impacts.

* Reprinted with the kind permission of the United Nations.

Please note that the text reproduced here is a selected
excerpt.

II. THE CORPORATE RESPONSIBILITY TO RESPECT HUMAN RIGHTS

A. FOUNDATIONAL PRINCIPLES

11. Business enterprises should respect human rights. This

means that they should

avoid infringing on the human rights of others and should

address adverse human

rights impacts with which they are involved.

12. The responsibility of business enterprises to respect

human rights refers to inter

nationally recognized human rights—understood, at a

minimum, as those expressed

in the International Bill of Human Rights and the

principles concerning fundamental

rights set out in the International labour Organization’s

Declaration on Fundamental

Principles and Rights at Work.

13. The responsibility to respect human rights requires

that business enterprises: (a) Avoid causing or
contributing to adverse human rights impacts through their
own activities, and address such impacts when they occur;
(b) Seek to prevent or mitigate adverse human rights
impacts that are directly linked to their operations,
products or services by their business relationships, even
if they have not contributed to those impacts.

14. The responsibility of business enterprises to respect

human rights applies to all

enterprises regardless of their size, sector, operational

context, ownership and struc

ture. Nevertheless, the scale and complexity of the means

through which enterprises

meet that responsibility may vary according to these

factors and with the severity of

the enterprise’s adverse human rights impacts.

15. In order to meet their responsibility to respect human

rights, business enter

prises should have in place policies and processes

appropriate to their size and

circumstances, including: (a) A policy commitment to meet

their responsibility to respect human rights; (b) A human
rights due diligence process to identify, prevent, mitigate
and account for how they address their impacts on human
rights; (c) Processes to enable the remediation of any
adverse human rights impacts they cause or to which they
contribute.

B. OPERATIONAL PRINCIPLES

POLICY COMMITMENT

16. As the basis for embedding their responsibility to

respect human rights, business

enterprises should express their commitment to meet this

responsibility through a

statement of policy that: (a) Is approved at the most

senior level of the business enterprise; (b) Is informed by
relevant internal and/or external expertise; (c) Stipulates
the enterprise’s human rights expectations of personnel,
business partners and other parties directly linked to its
operations, products or services; (d) Is publicly available
and communicated internally and externally to all
personnel, business partners and other relevant parties;
(e) Is reflected in operational policies and procedures
necessary to embed it throughout the business enterprise.
HUMAN RIGHTS DUE DILIGENCE

17. In order to identify, prevent, mitigate and account for

how they address their

adverse human rights impacts, business enterprises should

carry out human rights

due diligence. The process should include assessing actual

and potential human

rights impacts, integrating and acting upon the findings,

tracking responses, and

communicating how impacts are addressed. Human rights due

diligence: (a) Should cover adverse human rights impacts
that the business enterprise may cause or contribute to
through its own activities, or which may be directly linked
to its operations, products or services by its business
relationships; (b) Will vary in complexity with the size of
the business enterprise, the risk of severe human rights
impacts, and the nature and context of its operations; (c)
Should be ongoing, recognizing that the human rights risks
may change over time as the business enterprise’s
operations and operating context evolve.

18. In order to gauge human rights risks, business

enterprises should identify and

assess any actual or potential adverse human rights impacts

with which they may be

involved either through their own activities or as a result

of their business relation

ships. This process should: (a) Draw on internal and/or

independent external human rights expertise; (b) Involve
meaningful consultation with potentially affected groups
and other relevant stakeholders, as appropriate to the size
of the business enterprise and the nature and context of
the operation.

19. In order to prevent and mitigate adverse human rights

impacts, business enter

prises should integrate the findings from their impact

assessments across relevant

internal functions and processes, and take appropriate

action. (a) Effective integration requires that: (i)
Responsibility for addressing such impacts is assigned to
the appropriate level and function within the business
enterprise; (ii) Internal decision-making, budget
allocations and oversight processes enable effective
responses to such impacts. (b) Appropriate action will vary
according to: (i) Whether the business enterprise causes or
contributes to an adverse impact, or whether it is involved
solely because the impact is directly linked to its
operations, products or services by a business
relationship; (ii) The extent of its leverage in addressing
the adverse impact.

20. In order to verify whether adverse human rights impacts

are being addressed,

business enterprises should track the effectiveness of

their response. Tracking

should: (a) Be based on appropriate qualitative and

quantitative indicators; (b) Draw on feedback from both
internal and external sources, including affected
stakeholders.

21. In order to account for how they address their human

rights impacts, business

enterprises should be prepared to communicate this

externally, particularly when

concerns are raised by or on behalf of affected

stakeholders. Business enterprises

whose operations or operating contexts pose risks of severe

human rights impacts

should report formally on how they address them. In all

instances, communications

should: (a) Be of a form and frequency that reflect an

enterprise’s human rights impacts and that are accessible
to its intended audiences; (b) Provide information that is
sufficient to evaluate the adequacy of an enterprise’s
response to the particular human rights impact involved;
(c) In turn not pose risks to affected stakeholders,
personnel or to legitimate requirements of commercial
confidentiality.

REMEDIATION
22. Where business enterprises identify that they have
caused or contributed to

adverse impacts, they should provide for or cooperate in

their remediation through

legitimate processes.

ISSUES OF CONTEXT

23. In all contexts, business enterprises should: (a)

Comply with all applicable laws and respect internationally
recognized human rights, wherever they operate; (b) Seek
ways to honour the principles of internationally recognized
human rights when faced with conflicting requirements; (c)
Treat the risk of causing or contributing to gross human
rights abuses as a legal compliance issue wherever they
operate.

24. Where it is necessary to prioritize actions to address

actual and potential adverse

human rights impacts, business enterprises should first

seek to prevent and mitigate

those that are most severe or where delayed response would

make them irreme

diable.

III. ACCESS TO REMEDY

A. FOUNDATIONAL PRINCIPLE

25. As part of their duty to protect against

business-related human rights abuse,

States must take appropriate steps to ensure, through

judicial, administrative,

legislative or other appropriate means, that when such

abuses occur within their

territory and/or jurisdiction those affected have access to

effective remedy.

B. OPERATIONAL PRINCIPLES

STATE-BASED JUDICIAL MECHANISMS

26. States should take appropriate steps to ensure the
effectiveness of domestic

judicial mechanisms when addressing business-related human

rights abuses,

including considering ways to reduce legal, practical and

other relevant barriers that

could lead to a denial of access to remedy.

STATE-BASED NON-JUDICIAL GRIEVANCE MECHANISMS

27. States should provide effective and appropriate

non-judicial grievance mecha

nisms, alongside judicial mechanisms, as part of a

comprehensive State-based

system for the remedy of business-related human rights

abuse.

NON-STATE-BASED GRIEVANCE MECHANISMS

28. States should consider ways to facilitate access to

effective non-State- based

grievance mechanisms dealing with business-related human

rights harms.

29. To make it possible for grievances to be addressed

early and remediated directly,

business enterprises should establish or participate in

effective operational-level

grievance mechanisms for individuals and communities who

may be adversely

impacted.

30. Industry, multi-stakeholder and other collaborative

initiatives that are based on

respect for human rights-related standards should ensure

that effective grievance

mechanisms are available.

EFFECTIVENESS CRITERIA FOR NON-JUDICIAL GRIEVANCE MECHANISMS

31. In order to ensure their effectiveness, non-judicial
grievance mechanisms, both

State-based and non-State-based, should be: (a) Legitimate:

enabling trust from the stakeholder groups for whose use
they are intended, and being accountable for the fair
conduct of grievance processes; (b) Accessible: being known
to all stakeholder groups for whose use they are intended,
and providing adequate assistance for those who may face
particular barriers to access; (c) Predictable: providing a
clear and known procedure with an indicative time frame for
each stage, and clarity on the types of process and outcome
available and means of monitoring implementation; (d)
Equitable: seeking to ensure that aggrieved parties have
reasonable access to sources of information, advice and
expertise necessary to engage in a grievance process on
fair, informed and respectful terms; (e) Transparent:
keeping parties to a grievance informed about its progress,
and providing sufficient information about the mechanism’s
performance to build confidence in its effectiveness and
meet any public interest at stake; (f) Rights-compatible:
ensuring that outcomes and remedies accord with
internationally recognized human rights; (g) A source of
continuous learning: drawing on relevant measures to
identify lessons for improving the mechanism and preventing
future grievances and harms;

Operational-level mechanisms should also be: (h) Based on

engagement and dialogue: consulting the stakeholder groups
for whose use they are intended on their design and
performance, and focusing on dialogue as the means to
address and resolve grievances.
7 The Voluntary Principles on Security
and Human Rights

Freeman, B. (2001) ‘Corporate Responsibility and Human

Rights’, transcript of speech available at
www.lse.ac.uk/collections/globalDimensions/seminars/

—— (2002) ‘Finding Common Ground: The Voluntary Principles

on Security and Human Rights’, text of a draft speech
provided to the author in Oslo.

Ruggie, J.G. (2013) Keynote Remarks at Annual Plenary,

Voluntary Principles on Security and Human Rights, Ministry
of Foreign Affairs, The Hague, Netherlands, 13 March 2013.

Voluntary Principles (2013) ‘Participants in the Voluntary

Principles Initiatives Gather for Discussions on Outreach
and Implementation and Welcome Six New Participants’, press
release, 15 March 2013.

The Voluntary Principles on

Security and Human Rights

The Governments of the United States and the United

Kingdom, companies in the

extractive and energy sectors (“Companies”), and

non-governmental organizations,

all with an interest in human rights and corporate social

responsibility, have engaged

in a dialogue on security and human rights.

The participants recognize the importance of the promotion

and protection of human

rights throughout the world and the constructive role

business and civil society—

including non-governmental organizations, labor/trade

unions, and local commu

nities—can play in advancing these goals. Through this

dialogue, the participants have

developed the following set of voluntary principles to

guide Companies in maintaining
the safety and security of their operations within an
operating framework that ensures

respect for human rights and fundamental freedoms. Mindful

of these goals, the

participants agree to the importance of continuing this

dialogue and keeping under

review these principles to ensure their continuing

relevance and efficacy.

Acknowledging that security is a fundamental need, shared

by individuals, commu

nities, businesses, and governments alike, and

acknowledging the difficult security

issues faced by Companies operating globally, we recognize

that security and respect

for human rights can and should be consistent;

Understanding that governments have the primary

responsibility to promote and

protect human rights and that all parties to a conflict are

obliged to observe applicable

international humanitarian law, we recognize that we share

the common goal of

promoting respect for human rights, particularly those set

forth in the Universal

Declaration of Human Rights, and international humanitarian

law;

Emphasizing the importance of safeguarding the integrity of

company personnel and

property, Companies recognize a commitment to act in a

manner consistent with the

laws of the countries within which they are present, to be

mindful of the highest

applicable international standards, and to promote the

observance of applicable
international law enforcement principles (e.g., the UN Code
of Conduct for Law

Enforcement Officials and the UN Basic Principles on the

Use of Force and Firearms

by Law Enforcement Officials), particularly with regard to

the use of force;

Taking note of the effect that Companies’ activities may

have on local communities, we

recognize the value of engaging with civil society and host

and home governments to

contribute to the welfare of the local community while

mitigating any potential for

conflict where possible;

Understanding that useful, credible information is a vital

component of security and

human rights, we recognize the importance of sharing and

understanding our respec

tive experiences regarding, inter alia, best security

practices and procedures, country

human rights situations, and public and private security,

subject to confidentiality

constraints;

Acknowledging that home governments and multilateral

institutions may, on occasion,

assist host governments with security sector reform,

developing institutional capaci

ties and strengthening the rule of law, we recognize the

important role Companies and

civil society can play in supporting these efforts;

We hereby express our support for the following voluntary

principles regarding

security and human rights in the extractive sector, which

fall into three categories,
risk assessment, relations with public security, and
relations with private security:

RISK ASSESSMENT

The ability to assess accurately risks present in a

Company's operating environment

is critical to the security of personnel, local communities

and assets; the success of

the Company's short and long-term operations; and to the

promotion and protection

of human rights. In some circumstances, this is relatively

simple; in others, it is

important to obtain extensive background information from

different sources;

monitoring and adapting to changing, complex political,

economic, law enforcement,

military and social situations; and maintaining productive

relations with local

communities and government officials.

The quality of complicated risk assessments is largely

dependent on the assembling

of regularly updated, credible information from a broad

range of perspectives—local

and national governments, security firms, other companies,

home governments,

multilateral institutions, and civil society knowledgeable

about local conditions. This

information may be most effective when shared to the

fullest extent possible (bearing

in mind confidentiality considerations) between Companies,

concerned civil society,

and governments.

Bearing in mind these general principles, we recognize that

accurate, effective risk

assessments should consider the following factors:

l Identification of security risks. Security risks can

result from political, economic, civil or social factors.
Moreover, certain personnel and assets may be at greater
risk than others. Identification of security risks allows a
Company to take measures to minimize risk and to assess
whether Company actions may heighten risk.

l Potential for violence. Depending on the environment,

violence can be widespread or limited to particular
regions, and it can develop with little or no warning.
Civil society, home and host government representatives,
and other sources should be consulted to identify risks
presented by the potential for violence. Risk assessments
should examine patterns of violence in areas of Company
operations for educational, predictive, and preventative
purposes.

l Human rights records. Risk assessments should consider

the available human rights records of public security
forces, paramilitaries, local and national law enforcement,
as well as the reputation of private security. Awareness of
past abuses and allegations can help Companies to avoid
recurrences as well as to promote accountability. Also,
identification of the capability of the above entities to
respond to situations of violence in a lawful manner (i.e.,
consistent with applicable international standards) allows
Companies to develop appropriate measures in operating
environments.

l Rule of law. Risk assessments should consider the local

prosecuting authority and judiciary's capacity to hold
accountable those responsible for human rights abuses and
for those responsible for violations of international
humanitarian law in a manner that respects the rights of
the accused.

l Conflict analysis. Identification of and understanding

the root causes and nature of local conflicts, as well as
the level of adherence to human rights and international
humanitarian law standards by key actors, can be
instructive for the development of strategies for managing
relations between the Company, local communities, Company
employees and their unions, and host governments. Risk
assessments should also consider the potential for future
conflicts.
l Equipment transfers. Where Companies provide equipment
(including lethal and non-lethal equipment) to public or
private security, they should consider the risk of such
transfers, any relevant export licensing requirements, and
the feasibility of measures to mitigate foreseeable
negative consequences, including adequate controls to
prevent misappropriation or diversion of equipment which
may lead to human rights abuses. In making risk
assessments, companies should consider any relevant past
incidents involving previous equipment transfers.

INTERACTIONS BETWEEN COMPANIES AND PUBLIC SECURITY

Although governments have the primary role of maintaining

law and order, security

and respect for human rights, Companies have an interest in

ensuring that actions

taken by governments, particularly the actions of public

security providers, are

consistent with the protection and promotion of human

rights. In cases where there

is a need to supplement security provided by host

governments, Companies may be

required or expected to contribute to, or otherwise

reimburse, the costs of protecting

Company facilities and personnel borne by public security.

While public security is

expected to act in a manner consistent with local and

national laws as well as with

human rights standards and international humanitarian law,

within this context

abuses may nevertheless occur.

In an effort to reduce the risk of such abuses and to

promote respect for human rights

generally, we have identified the following voluntary

principles to guide relationships

between Companies and public security regarding security

provided to Companies:
Security Arrangements

l Companies should consult regularly with host governments

and local communities about the impact of their security
arrangements on those communities.

l Companies should communicate their policies regarding

ethical conduct and human rights to public security
providers, and express their desire that security be
provided in a manner consistent with those policies by
personnel with adequate and effective training.

l Companies should encourage host governments to permit

making security arrangements transparent and accessible to
the public, subject to any overriding safety and security
concerns.

Deployment and Conduct

l The primary role of public security should be to maintain

the rule of law, including safeguarding human rights and
deterring acts that threaten Company personnel and
facilities. The type and number of public security forces
deployed should be competent, appropriate and proportional
to the threat.

l Equipment imports and exports should comply with all

applicable law and regulations. Companies that provide
equipment to public security should take all appropriate
and lawful measures to mitigate any foreseeable negative
consequences, including human rights abuses and violations
of international humanitarian law.

l Companies should use their influence to promote the

following principles with public security: (a) individuals
credibly implicated in human rights abuses should not
provide security services for Companies; (b) force should
be used only when strictly necessary and to an extent
proportional to the threat; and (c) the rights of
individuals should not be violated while exercising the
right to exercise freedom of association and peaceful
assembly, the right to engage in collective bargaining, or
other related rights of Company employees as recognized by
the Universal Declaration of Human Rights and the ILO
Declaration on Fundamental Principles and Rights at Work.

l In cases where physical force is used by public security,

such incidents should be reported to the appropriate
authorities and to the Company. Where force is used,
medical aid should be provided to injured persons,
including to offenders.

Consultation and Advice

l Companies should hold structured meetings with public

security on a regular basis to discuss security, human
rights and related work-place safety issues. Companies
should also consult regularly with other Companies, host
and home governments, and civil society to discuss security
and human rights. Where Companies operating in the same
region have common concerns, they should consider
collectively raising those concerns with the host and home
governments.

l In their consultations with host governments, Companies

should take all appropriate measures to promote observance
of applicable international law enforcement principles,
particularly those reflected in the UN Code of Conduct for
Law Enforcement Officials and the UN Basic Principles on
the Use of Force and Firearms.

l Companies should support efforts by governments, civil

society and multilateral institutions to provide human
rights training and education for public security as well
as their efforts to strengthen state institutions to ensure
accountability and respect for human rights.

Responses to Human Rights Abuses

l Companies should record and report any credible

allegations of human rights abuses by public security in
their areas of operation to appropriate host government
authorities. Where appropriate, Companies should urge
investigation and that action be taken to prevent any
recurrence.

l Companies should actively monitor the status of

investigations and press for their proper resolution.

l Companies should, to the extent reasonable, monitor the

use of equipment provided by the Company and to investigate
properly situations in which such equipment is used in an
inappropriate manner.

l Every effort should be made to ensure that information

used as the basis for allegations of human rights abuses is
credible and based on reliable evidence. The security and
safety of sources should be protected. Additional or more
accurate information that may alter previous allegations
should be made available as appropriate to concerned
parties.

INTERACTIONS BETWEEN COMPANIES AND PRIVATE SECURITY

Where host governments are unable or unwilling to provide

adequate security to

protect a Company's personnel or assets, it may be

necessary to engage private

security providers as a complement to public security. In

this context, private security

may have to coordinate with state forces, (law enforcement,

in particular) to carry

weapons and to consider the defensive local use of force.

Given the risks associated

with such activities, we recognize the following voluntary

principles to guide private

security conduct:

l Private security should observe the policies of the

contracting Company regarding ethical conduct and human
rights; the law and professional standards of the country
in which they operate; emerging best practices developed by
industry, civil society, and governments; and promote the
observance of international humanitarian law.

l Private security should maintain high levels of technical

and professional proficiency, particularly with regard to
the local use of force and firearms.

l Private security should act in a lawful manner. They

should exercise restraint and caution in a manner
consistent with applicable international guidelines
regarding the local use of force, including the UN
Principles on the Use of Force and Firearms by Law
Enforcement Officials and the UN Code of Conduct for Law
Enforcement Officials, as well as with emerging best
practices developed by Companies, civil society, and
governments.

l Private security should have policies regarding

appropriate conduct and the local use of force (e.g., rules
of engagement). Practice under these policies should be
capable of being monitored by Companies or, where
appropriate, by independent third parties. Such monitoring
should encompass detailed investigations into allegations
of abusive or unlawful acts; the availability of
disciplinary measures sufficient to prevent and deter; and
procedures for reporting allegations to relevant local law
enforcement authorities when appropriate.

l All allegations of human rights abuses by private

security should be recorded. Credible allegations should be
properly investigated. In those cases where allegations
against private security providers are forwarded to the
relevant law enforcement authorities, Companies should
actively monitor the status of investigations and press for
their proper resolution.

l Consistent with their function, private security should

provide only preventative and defensive services and should
not engage in activities exclusively the responsibility of
state military or law enforcement authorities. Companies
should designate services, technology and equipment capable
of offensive and defensive purposes as being for defensive
use only.

l Private security should (a) not employ individuals

credibly implicated in human rights abuses to provide
security services; (b) use force only when strictly
necessary and to an extent proportional to the threat; and
(c) not violate the rights of individuals while exercising
the right to exercise freedom of association and peaceful
assembly, to engage in collective bargaining, or other
related rights of Company employees as recognized by the
Universal Declaration of Human Rights and the ILO
Declaration on Fundamental Principles and Rights at Work.

l In cases where physical force is used, private security

should properly investigate and report the incident to the
Company. Private security should refer the matter to local
authorities and/or take disciplinary action where
appropriate. Where force is used, medical aid should be
provided to injured persons, including to offenders.

l Private security should maintain the confidentiality of

information obtained as a result of its position as
security provider, except where to do so would jeopardize
the principles contained herein.

To minimize the risk that private security exceed their

authority as providers of

security, and to promote respect for human rights

generally, we have developed the

following additional voluntary principles and guidelines:

l Where appropriate, Companies should include the

principles outlined above as contractual provisions in
agreements with private security providers and ensure that
private security personnel are adequately trained to
respect the rights of employees and the local community. To
the extent practicable, agreements between Companies and
private security should require investigation of unlawful
or abusive behavior and appropriate disciplinary action.
Agreements should also permit termination of the
relationship by Companies where there is credible evidence
of unlawful or abusive behavior by private security
personnel.

l Companies should consult and monitor private security

providers to ensure they fulfil their obligation to provide
security in a manner consistent with the principles
outlined above. Where appropriate, Companies should seek to
employ private security providers that are representative
of the local population.

l Companies should review the background of private

security they intend to employ, particularly with regard to
the use of excessive force. Such reviews should include an
assessment of previous services provided to the host
government and whether these services raise concern about
the private security firm's dual role as a private security
provider and government contractor.

l Companies should consult with other Companies, home

country officials, host country officials, and civil
society regarding experiences with private security. Where
appropriate and lawful, Companies should facilitate the
exchange of information about unlawful activity and abuses
committed by private security providers.
8 International Labour Organization:
Tripartite Declaration of Principles
concerning Multinational Enterprises and
Social Policy

Gallin, D. (1997) ‘The Tripartite Declaration on

Multinational Enterprises’, a comment in answer to a
request for interpretation on the 20th anniversary of the
Global Labour Institute,
www.global-labour.org/tripartite_declaration_ilo.htm,
accessed 2003.

ILO (International Labour Organization) (2001) Tripartite

Declaration of Principles concerning Multinational
Enterprises and Social Policy (Geneva: ILO).

Vernon, R. (1977) Storm over the Multinationals: The Real

Issues (Cambridge, MA: Harvard University Press, June
1977).

Tripartite Declaration of

Principles concerning Multinational

Enterprises and Social Policy *

including

l List of international labour Conventions and

Recommendations referred to in the Tripartite Declaration
of Principles concerning Multinational Enterprises and
Social Policy, and

l Addendum to the Tripartite Declaration of Principles

concerning Multinational Enterprises and Social Policy

(Declaration adopted by the Governing Body of the

International Labour Office at its

204th Session (Geneva, November 1977)).

The Governing Body of the International Labour Office:

Recalling that the International Labour Organization for

many years has been involved

with certain social issues related to the activities of

multinational enterprises;

Noting in particular that various Industrial Committees,

Regional Conferences, and

the International Labour Conference since the mid-1960s

have requested appropriate

action by the Governing Body in the field of multinational

enterprises and social policy;

Having been informed of the activities of other

international bodies, in particular the

UN Commission on Transnational Corporations and the

Organization for Economic

Cooperation and Development (OECD);

Considering that the ILO, with its unique tripartite

structure, its competence, and its

long-standing experience in the social field, has an

essential role to play in evolving

principles for the guidance of governments, workers’ and

employers’ organizations,

and multinational enterprises themselves;

Recalling that it convened a Tripartite Meeting of Experts

on the Relationship between

Multinational Enterprises and Social Policy in 1972, which

recommended an ILO

programme of research and study, and a Tripartite Advisory

Meeting on the Relation

ship of Multinational Enterprises and Social Policy in 1976

for the purpose of reviewing

the ILO programme of research and suggesting appropriate

ILO action in the social

and labour field;

* Copyright © 2002 International Labour Organization.

Reproduced with permission.

Bearing in mind the deliberations of the World Employment

Conference;
Having thereafter decided to establish a tripartite group
to prepare a Draft Tripartite

Declaration of Principles covering all of the areas of ILO

concern which relate to the

social aspects of the activities of multinational

enterprises, including employment

creation in the developing countries, all the while bearing

in mind the recommen

dations made by the Tripartite Advisory Meeting held in

1976;

Having also decided to reconvene the Tripartite Advisory

Meeting to consider the Draft

Declaration of Principles as prepared by the tripartite

group;

Having considered the Report and the Draft Declaration of

Principles submitted to it

by the reconvened Tripartite Advisory Meeting;

Hereby approves the following Declaration which may be

cited as the Tripartite

Declaration of Principles concerning Multinational

Enterprises and Social Policy,

adopted by the Governing Body of the International Labour

Office, and invites govern

ments of States Members of the ILO, the employers’ and

workers’ organizations

concerned and the multinational enterprises operating in

their territories to observe

the principles embodied therein.

1. Multinational enterprises play an important part in the

economies of most coun

tries and in international economic relations. This is of

increasing interest to govern

ments as well as to employers and workers and their

respective organizations.

Through international direct investment and other means

such enterprises can bring

substantial benefits to home and host countries by

contributing to the more efficient

utilization of capital, technology and labour. Within the

framework of development

policies established by governments, they can also make an

important contribution to

the promotion of economic and social welfare; to the

improvement of living standards

and the satisfaction of basic needs; to the creation of

employment opportunities, both

directly and indirectly; and to the enjoyment of basic

human rights, including freedom

of association, throughout the world. On the other hand,

the advances made by multi

national enterprises in organizing their operations beyond

the national framework

may lead to abuse of concentrations of economic power and

to conflicts with national

policy objectives and with the interest of the workers. In

addition, the complexity of

multinational enterprises and the difficulty of clearly

perceiving their diverse struc

tures, operations and policies sometimes give rise to

concern either in the home or

in the host countries, or in both.

2. The aim of this Tripartite Declaration of Principles is

to encourage the positive

contribution which multinational enterprises can make to

economic and social pro

gress and to minimize and resolve the difficulties to which

their various operations

may give rise, taking into account the United Nations

resolutions advocating the

Establishment of a New International Economic Order.

3. This aim will be furthered by appropriate laws and

policies, measures and actions

adopted by the governments and by cooperation among the

governments and the

employers' and workers' organizations of all countries.

4. The principles set out in this Declaration are commended

to the governments, the

employers’ and workers’ organizations of home and host

countries and to the multi

national enterprises themselves.

5. These principles are intended to guide the governments,

the employers' and

workers’ organizations and the multinational enterprises in

taking such measures

and actions and adopting such social policies, including

those based on the principles

laid down in the Constitution and the relevant Conventions

and Recommendations of

the ILO, as would further social progress.

6. To serve its purpose this Declaration does not require a

precise legal definition of

multinational enterprises; this paragraph is designed to

facilitate the understanding

of the Declaration and not to provide such a definition.

Multinational enterprises

include enterprises, whether they are of public, mixed or

private ownership, which

own or control production, distribution, services or other

facilities outside the country

in which they are based. The degree of autonomy of entities

within multinational

enterprises in relation to each other varies widely from

one such enterprise to

another, depending on the nature of the links between such

entities and their fields

of activity and having regard to the great diversity in the

form of ownership, in the size,

in the nature and location of the operations of the

enterprises concerned. Unless

otherwise specified, the term “multinational enterprise” is

used in this Declaration to

designate the various entities (parent companies or local

entities or both or the

organization as a whole) according to the distribution of

responsibilities among them,

in the expectation that they will cooperate and provide

assistance to one another as

necessary to facilitate observance of the principles laid

down in the Declaration.

7. This Declaration sets out principles in the fields of

employment, training, condi

tions of work and life and industrial relations which

governments, employers' and

workers' organizations and multinational enterprises are

recommended to observe

on a voluntary basis; its provisions shall not limit or

otherwise affect obligations

arising out of ratification of any ILO Convention.

General policies

8. All the parties concerned by this Declaration should

respect the sovereign rights
of States, obey the national laws and regulations, give due
consideration to local

practices and respect relevant international standards.

They should respect the Uni

versal Declaration of Human Rights and the corresponding

International Covenants

adopted by the General Assembly of the United Nations as

well as the Constitution of

the International Labour Organization and its principles

according to which freedom

of expression and association are essential to sustained

progress. They should also

honour commitments which they have freely entered into, in

conformity with the

national law and accepted international obligations.

9. Governments which have not yet ratified Conventions Nos.

87, 98, 111 and 122 are

urged to do so and in any event to apply, to the greatest

extent possible, through their

national policies, the principles embodied therein and in

Recommendations Nos. 111,

119 and 122 1 . Without prejudice to the obligation of

governments to ensure compliance

with Conventions they have ratified, in countries in which

the Conventions and Recom

mendations cited in this paragraph are not complied with,

all parties should refer to

them for guidance in their social policy.

10. Multinational enterprises should take fully into

account established general

policy objectives of the countries in which they operate.

Their activities should be in
harmony with the development priorities and social aims and
structure of the country

in which they operate. To this effect, consultations should

be held between multi

national enterprises, the government and, wherever

appropriate, the national

employers’ and workers’ organizations concerned.

11. The principles laid down in this Declaration do not aim

at introducing or main

taining inequalities of treatment between multinational and

national enterprises.

They reflect good practice for all. Multinational and

national enterprises, wherever the

principles of this Declaration are relevant to both, should

be subject to the same

expectations in respect of their conduct in general and

their social practices in

particular.

12. Governments of home countries should promote good

social practice in accor

dance with this Declaration of Principles, having regard to

the social and labour law,

regulations and practices in host countries as well as to

relevant international

standards. Both host and home country governments should be

prepared to have

consultations with each other, whenever the need arises, on

the initiative of either.

Employment promotion

13. With a view to stimulating economic growth and

development, raising living

standards, meeting manpower requirements and overcoming

unemployment and
underemployment, governments should declare and pursue, as
a major goal, an

active policy designed to promote full, productive and

freely chosen employment 2 .

14. This is particularly important in the case of host

country governments in develop

ing areas of the world where the problems of unemployment

and underemployment

are at their most serious. In this connection, the general

conclusions adopted by the

Tripartite World Conference on Employment, Income

Distribution and Social Progress

and the International Division of Labour (Geneva, June

1976) should be kept in mind 3 .

15. Paragraphs 13 and 14 above establish the framework

within which due attention

should be paid, in both home and host countries, to the

employment impact of multi

national enterprises.

16. Multinational enterprises, particularly when operating

in developing countries,

should endeavour to increase employment opportunities and

standards, taking into

account the employment policies and objectives of the

governments, as well as

security of employment and the long-term development of the

enterprise.

17. Before starting operations, multinational enterprises

should, wherever appropri

ate, consult the competent authorities and the national

employers’ and workers’

organizations in order to keep their manpower plans, as far

as practicable, in harmony
with national social development policies. Such
consultation, as in the case of national

enterprises, should continue between the multinational

enterprises and all parties

concerned, including the workers' organizations.

18. Multinational enterprises should give priority to the

employment, occupational

development, promotion and advancement of nationals of the

host country at all levels

in cooperation, as appropriate, with representatives of the

workers employed by them

or of the organizations of these workers and governmental

authorities.

19. Multinational enterprises, when investing in developing

countries, should have

regard to the importance of using technologies which

generate employment, both

directly and indirectly. To the extent permitted by the

nature of the process and the

conditions prevailing in the economic sector concerned,

they should adapt technolo

gies to the needs and characteristics of the host

countries. They should also, where

possible, take part in the development of appropriate

technology in host countries.

20. To promote employment in developing countries, in the

context of an expanding

world economy, multinational enterprises, wherever

practicable, should give consid

eration to the conclusion of contracts with national

enterprises for the manufacture

of parts and equipment, to the use of local raw materials

and to the progressive
promotion of the local processing of raw materials. Such
arrangements should not be

used by multinational enterprises to avoid the

responsibilities embodied in the prin

ciples of this Declaration.

Equality of opportunity and treatment

21. All governments should pursue policies designed to

promote equality of oppor

tunity and treatment in employment, with a view to

eliminating any discrimination

based on race, colour, sex, religion, political opinion,

national extraction or social

origin 4 .

22. Multinational enterprises should be guided by this

general principle throughout

their operations without prejudice to the measures

envisaged in paragraph 18 or to

government policies designed to correct historical patterns

of discrimination and

thereby to extend equality of opportunity and treatment in

employment. Multinational

enterprises should accordingly make qualifications, skill

and experience the basis for

the recruitment, placement, training and advancement of

their staff at all levels.

23. Governments should never require or encourage

multinational enterprises to

discriminate on any of the grounds mentioned in paragraph

21, and continuing guid

ance from governments, where appropriate, on the avoidance

of such discrimination

in employment is encouraged.
Security of employment

24. Governments should carefully study the impact of

multinational enterprises on

employment in different industrial sectors. Governments, as

well as multinational

enterprises themselves, in all countries should take

suitable measures to deal with

the employment and labour market impacts of the operations

of multinational enter

prises.

25. Multinational enterprises equally with national

enterprises, through active man

power planning, should endeavour to provide stable

employment for their employees

and should observe freely negotiated obligations concerning

employment stability and

social security. In view of the flexibility which

multinational enterprises may have, they

should strive to assume a leading role in promoting

security of employment, particu

larly in countries where the discontinuation of operations

is likely to accentuate long

term unemployment.

26. In considering changes in operations (including those

resulting from mergers,

take-overs or transfers of production) which would have

major employment effects,

multinational enterprises should provide reasonable notice

of such changes to the

appropriate government authorities and representatives of

the workers in their

employment and their organizations so that the implications

may be examined jointly

in order to mitigate adverse effects to the greatest

possible extent. This is particularly

important in the case of the closure of an entity involving

collective lay-offs or

dismissals.

27. Arbitrary dismissal procedures should be avoided 5 .

28. Governments, in cooperation with multinational as well

as national enterprises,

should provide some form of income protection for workers

whose employment has

been terminated 6 .

Training

29. Governments, in cooperation with all the parties

concerned, should develop

national policies for vocational training and guidance,

closely linked with employ

ment 7 . This is the framework within which multinational

enterprises should pursue

their training policies.

30. In their operations, multinational enterprises should

ensure that relevant training

is provided for all levels of their employees in the host

country, as appropriate, to meet

the needs of the enterprise as well as the development

policies of the country. Such

training should, to the extent possible, develop generally

useful skills and promote

career opportunities. This responsibility should be carried

out, where appropriate, in

cooperation with the authorities of the country, employers’

and workers’ organizations
and the competent local, national or international
institutions.

31. Multinational enterprises operating in developing

countries should participate,

along with national enterprises, in programmes, including

special funds, encouraged

by host governments and supported by employers’ and

workers’ organizations. These

programmes should have the aim of encouraging skill

formation and development as

well as providing vocational guidance, and should be

jointly administered by the

parties which support them. Wherever practicable,

multinational enterprises should

make the services of skilled resource personnel available

to help in training pro

grammes organized by governments as part of a contribution

to national develop

ment.

32. Multinational enterprises, with the cooperation of

governments and to the extent

consistent with the efficient operation of the enterprise,

should afford opportunities

within the enterprise as a whole to broaden the experience

of local management in

suitable fields such as industrial relations.

Conditions of work and life

Wages, benefits and conditions of work

33. Wages, benefits and conditions of work offered by

multinational enterprises

should be not less favourable to the workers than those

offered by comparable
employers in the country concerned.

34. When multinational enterprises operate in developing

countries, where compar

able employers may not exist, they should provide the best
possible wages, benefits

and conditions of work, within the framework of government

policies 8 . These should

be related to the economic position of the enterprise, but

should be at least adequate

to satisfy basic needs of the workers and their families.

Where they provide workers

with basic amenities such as housing, medical care or food,

these amenities should

be of a good standard 9 .

35. Governments, especially in developing countries, should

endeavour to adopt suit

able measures to ensure that lower income groups and less

developed areas benefit

as much as possible from the activities of multinational

enterprises.

Safety and health

36. Governments should ensure that both multinational and

national enterprises

provide adequate safety and health standards for their

employees. Those govern

ments which have not yet ratified the ILO Conventions on

Guarding of Machinery (No.

119), Ionizing Radiation (No. 115), Benzene (No. 136) and

Occupational Cancer (No. 139)

are urged nevertheless to apply to the greatest extent

possible the principles

embodied in these Conventions and in their related

Recommendations (Nos. 118, 114,

144 and 147). The Codes of Practice and Guides in the

current list of ILO publications

on Occupational Safety and Health should also be taken into

account 10 .

37. Multinational enterprises should maintain the highest

standards of safety and

health, in conformity with national requirements, bearing

in mind their relevant expe

rience within the enterprise as a whole, including any

knowledge of special hazards.

They should also make available to the representatives of

the workers in the enter

prise, and upon request, to the competent authorities and

the workers’ and employ

ers’ organizations in all countries in which they operate,

information on the safety and

health standards relevant to their local operations, which

they observe in other

countries. In particular, they should make known to those

concerned any special haz

ards and related protective measures associated with new

products and processes.

They, like comparable domestic enterprises, should be

expected to play a leading role

in the examination of causes of industrial safety and

health hazards and in the

application of resulting improvements within the enterprise

as a whole.

38. Multinational enterprises should cooperate in the work

of international organiza

tions concerned with the preparation and adoption of

international safety and health
standards.

39. In accordance with national practice, multinational

enterprises should cooperate

fully with the competent safety and health authorities, the

representatives of the

workers and their organizations, and established safety and

health organizations.

Where appropriate, matters relating to safety and health

should be incorporated in

agreements with the representatives of the workers and

their organizations.

Industrial relations

40. Multinational enterprises should observe standards of

industrial relations not

less favourable than those observed by comparable employers

in the country con

cerned.

Freedom of association and the right to organize

41. Workers employed by multinational enterprises as well

as those employed by

national enterprises should, without distinction

whatsoever, have the right to estab

lish and, subject only to the rules of the organization

concerned, to join organizations

of their own choosing without previous authorisation 11 .

They should also enjoy ade

quate protection against acts of anti-union discrimination

in respect of their employ

ment 12 .

42. Organizations representing multinational enterprises or

the workers in their

employment should enjoy adequate protection against any

acts of interference by

each other or each other's agents or members in their

establishment, functioning or

administration 13 .

43. Where appropriate, in the local circumstances,

multinational enterprises should

support representative employers' organizations.

44. Governments, where they do not already do so, are urged

to apply the principles

of Convention No. 87, Article 5, in view of the importance,

in relation to multinational

enterprises, of permitting organizations representing such

enterprises or the workers

in their employment to affiliate with international

organizations of employers and

workers of their own choosing.

45. Where governments of host countries offer special

incentives to attract foreign

investment, these incentives should not include any

limitation of the workers' free

dom of association or the right to organize and bargain

collectively.

46. Representatives of the workers in multinational

enterprises should not be hin

dered from meeting for consultation and exchange of views

among themselves,

provided that the functioning of the operations of the

enterprise and the normal

procedures which govern relationships with representatives

of the workers and their

organizations are not thereby prejudiced.

47. Governments should not restrict the entry of

representatives of employers' and

workers' organizations who come from other countries at the

invitation of the local or

national organizations concerned for the purpose of

consultation on matters of

mutual concern, solely on the grounds that they seek entry

in that capacity.

Collective bargaining

48. Workers employed by multinational enterprises should

have the right, in accor

dance with national law and practice, to have

representative organizations of their own

choosing recognized for the purpose of collective

bargaining.

49. Measures appropriate to national conditions should be

taken, where necessary,

to encourage and promote the full development and

utilization of machinery for

voluntary negotiation between employers or employers’

organizations and workers’

organizations, with a view to the regulation of terms and

conditions of employment by

means of collective agreements 14 .

50. Multinational enterprises, as well as national

enterprises, should provide work

ers’ representatives with such facilities as may be

necessary to assist in the develop

ment of effective collective agreements 15 .

51. Multinational enterprises should enable duly authorized

representatives of the

workers in their employment in each of the countries in

which they operate to conduct
negotiations with representatives of management who are
authorized to take deci

sions on the matters under negotiation.

52. Multinational enterprises, in the context of bona fide

negotiations with the work

ers’ representatives on conditions of employment, or while

workers are exercising the

right to organize, should not threaten to utilize a

capacity to transfer the whole or part

of an operating unit from the country concerned in order to

influence unfairly those

negotiations or to hinder the exercise of the right to

organize; nor should they transfer

workers from affiliates in foreign countries with a view to

undermining bona fide

negotiations with the workers’ representatives or the

workers’ exercise of their right

to organize.

53. Collective agreements should include provisions for the

settlement of disputes

arising over their interpretation and application and for

ensuring mutually respected

rights and responsibilities.

54. Multinational enterprises should provide workers'

representatives with informa

tion required for meaningful negotiations with the entity

involved and, where this

accords with local law and practices, should also provide

information to enable them

to obtain a true and fair view of the performance of the

entity or, where appropriate,

of the enterprise as a whole 16 .

55. Governments should supply to the representatives of
workers' organizations on

request, where law and practice so permit, information on

the industries in which the

enterprise operates, which would help in laying down

objective criteria in the collec

tive bargaining process. In this context, multinational as

well as national enterprises

should respond constructively to requests by governments

for relevant information on

their operations.

Consultation

56. In multinational as well as in national enterprises,

systems devised by mutual

agreement between employers and workers and their

representatives should provide,

in accordance with national law and practice, for regular

consultation on matters of

mutual concern. Such consultation should not be a

substitute for collective bargain

ing 17 .

Examination of grievances

57. Multinational as well as national enterprises should

respect the right of the

workers whom they employ to have all their grievances

processed in a manner consis

tent with the following provision: any worker who, acting

individually or jointly with

other workers, considers that he has grounds for a

grievance should have the right to

submit such grievance without suffering any prejudice

whatsoever as a result, and to
have such grievance examined pursuant to an appropriate
procedure 18 . This is partic

ularly important whenever the multinational enterprises

operate in countries which

do not abide by the principles of ILO Conventions

pertaining to freedom of association,

to the right to organize and bargain collectively and to

forced labour 19 .

Settlement of industrial disputes

58. Multinational as well as national enterprises jointly

with the representatives and

organizations of the workers whom they employ should seek

to establish voluntary

conciliation machinery, appropriate to national conditions,

which may include provi

sions for voluntary arbitration, to assist in the

prevention and settlement of industrial

disputes between employers and workers. The voluntary

conciliation machinery

should include equal representation of employers and

workers 20 .

List of international labour Conventions and

Recommendations referred

to in the Tripartite Declaration of Principles concerning

Multinational

Enterprises and Social Policy

(adopted by the Governing Body of the International Labour

Office at its 204th Session

(Geneva, November 1977)) 21

Conventions

l Convention (No. 29) concerning Forced or Compulsory

Labour, 1930.
l Convention (No. 87) concerning Freedom of Association and
Protection of the Right to Organize, 1948.

l Convention (No. 98) concerning the Application of the

Principles of the Right to Organize and to Bargain
Collectively, 1949.

l Convention (No. 100) concerning Equal Remuneration for

Men and Women Workers for Work of Equal Value, 1951.

l Convention (No. 105) concerning the Abolition of Forced

Labour, 1957.

l Convention (No. 110) concerning Conditions of Employment

of Plantation Workers, 1958.

l Convention (No. 111) concerning Discrimination in Respect

of Employment and Occupation, 1958.

l Convention (No. 115) concerning the Protection of Workers

against Ionizing Radiations, 1960.

l Convention (No. 119) concerning the Guarding of

Machinery, 1963.

l Convention (No. 122) concerning Employment Policy, 1964.

l Convention (No. 130) concerning Medical Care and Sickness

Benefits, 1969.

l Convention (No. 135) concerning Protection and Facilities

to be Afforded to Workers’ Representatives in the
Undertaking, 1971.

l Convention (No. 136) concerning Protection against

Hazards of Poisoning arising from Benzene, 1971.

l Convention (No. 139) concerning Prevention and Control of

Occupational Hazards caused by Carcinogenic Substances and
Agents, 1974.

l Convention (No. 142) concerning Vocational Guidance and

Vocational Training in the Development of Human Resources,
1975.

Recommendations

l Recommendation (No. 35) concerning Indirect Compulsion to

Labour, 1930.
l Recommendation (No. 69) concerning Medical Care, 1944.

l Recommendation (No. 90) concerning Equal Remuneration for

Men and Women Workers for Work of Equal Value, 1951.

l Recommendation (No. 92) concerning Voluntary Conciliation

and Arbitration, 1951.

l Recommendation (No. 94) concerning Consultation and

Cooperation between Employers and Workers at the Level of
the Undertaking, 1952.

l Recommendation (No. 110) concerning Conditions of

Employment of Plantation Workers, 1958.

l Recommendation (No. 111) concerning Discrimination in

Respect of Employment and Occupation, 1958.

l Recommendation (No. 114) concerning the Protection of

Workers against Ionizing Radiations, 1960.

l Recommendation (No. 115) concerning Workers' Housing,

1961.

l Recommendation (No. 116) concerning Reduction of Hours of

Work, 1962.

l Recommendation (No. 118) concerning the Guarding of

Machinery, 1963.

l Recommendation (No. 119) concerning Termination of

Employment at the Initiative of the Employer, 1963.

l Recommendation (No. 122) concerning Employment Policy,

1964.

l Recommendation (No. 129) concerning Communications

between Management and Workers within the Undertaking,
1967.

l Recommendation (No. 130) concerning the Examination of

Grievances within the Undertaking with a View to their
Settlement, 1967.

l Recommendation (No. 134) concerning Medical Care and

Sickness Benefits, 1969.

l Recommendation (No. 144) concerning Protection against

Hazards of Poisoning arising from Benzene, 1971.
l Recommendation (No. 147) concerning Prevention and
Control of Occupational Hazards caused by Carcinogenic
Substances and Agents, 1974.

l Recommendation (No. 150) concerning Vocational Guidance

and Vocational Training in the Development of Human
Resources, 1975.

Addendum to the Tripartite Declaration of Principles

concerning

Multinational Enterprises and Social Policy

(adopted by the Governing Body of the International Labour

Office at its 238th Session

(Geneva, November 1987) and 264th Session (November 1995))

Principles concerning Multinational Enterprises and Social

Policy

A number of international labour Conventions and

Recommendations containing pro

visions relevant to the Declaration are referred to in

footnotes in the Declaration as

well as in an annex. These footnotes do not affect the

meaning of the provisions of the

instruments adopted by the International Labour

Organization in the corresponding

subject areas, which have helped shape the provisions of

the Declaration.

Since the adoption of the Declaration by the Governing Body

on 16 November 1977, new

Conventions and Recommendations have been adopted by the

International Labour

Conference. This makes it necessary to include a new list

of Conventions and Recom

mendations adopted since 1977 (including those adopted in

June 1977), containing

provisions relevant to the Declaration, and this list is

set out below. Like the footnotes
the meaning of the provisions of the Declaration.

In keeping with the voluntary nature of the Declaration all

of its provisions, whether

derived from ILO Conventions and Recommendations or other

sources, are recom

mendatory, except of course for provisions in Conventions

which are binding on the

member States which have ratified them.

List of Conventions and Recommendations adopted since 1977

(inclusive) which

contain provisions relevant to the Declaration

Number and title of Convention and Recommendation Relevant

paragraphs Conventions

No. 148 concerning the Protection of Workers against

Occupational 36

Hazards in the Working Environment Due to Air Pollution,

Noise and

Vibration, 1977

No. 154 concerning the Promotion of Collective Bargaining,

1981 9, 49

No. 155 concerning Occupational Safety and Health and the

Working 36

Environment, 1981

No. 156 concerning Equal Opportunities and Equal Treatment

for Men 21

and Women Workers: Workers with Family Responsibilities,

1981

No. 158 concerning Termination of Employment at the

Initiative of the 9, 26, 27, 28

Employer, 1982

No. 161 concerning Occupational Health Services, 1985 36

No. 162 concerning Safety in the Use of Asbestos, 1986 36

No. 167 concerning Safety and Health in Construction, 1988

36

No. 168 concerning Employment Promotion and Protection

against 13

Unemployment, 1988

No. 170 concerning Safety in the Use of Chemicals at Work,

1990 36

No. 173 concerning the Protection of Workers' Claims in the

Event of 28

the Insolvency of their Employer, 1992

No. 174 concerning the Prevention of Major Industrial

Accidents, 1993 36

No. 176 concerning Safety and Health in Mines, 1995 36

Recommendations

No. 156 concerning the Protection of Workers against

Occupational 36

Hazards in the Working Environment Due to Air Pollution,

Noise and

Vibration, 1977

No. 163 concerning the Promotion of Collective Bargaining,

1981 51, 54, 55

No. 164 concerning Occupational Safety and Health and the

Working 36

Environment, 1981

No. 165 concerning Equal Opportunities and Equal Treatment

for Men 21

and Women Workers: Workers With Family Responsibilities,

1981

No. 166 concerning Termination of Employment at the

Initiative of the 9, 26, 27, 28
Employer

No. 169 concerning Employment Policy, 1984 9, 13

No. 171 concerning Occupational Health Services, 1985 36

No. 172 concerning Safety in the Use of Asbestos, 1986 36

Notes:

1 Convention (No. 87) concerning Freedom of Association and

Protection of the Right to Organize; Convention (No. 98)
concerning the Application of the Principles of the Right
to Organize and to Bargain Collectively; Convention (No.
111) concerning Discrimination in Respect of Employment and
Occupation; Convention (No. 122) concerning Employment
Policy; Recommendation (No. 111) concerning Discrimination
in Respect of Employment and Occupation; Recommendation
(No. 119) concerning Termination of Employment at the
Initiative of the Employer; Recommendation (No. 122)
concerning Employment Policy.

2 Convention (No. 122) and Recommendation (No. 122)

concerning Employment Policy.

3 ILO, World Employment Conference, Geneva, 4-17 June 1976.

4 Convention (No. 111) and Recommendation (No. 111)

concerning Discrimination in Respect of Employment and
Occupation; Convention (No. 100) and Recommendation (No.
90) concerning Equal Remuneration for Men and Women Workers
for Work of Equal Value.

5 Recommendation (No. 119) concerning Termination of

Employment at the Initiative of the Employer.

6 Recommendation (No. 119) concerning Termination of

Employment at the Initiative of the Employer.

7 Convention (No. 142) and Recommendation (No. 150)

concerning Vocational Guidance and Vocational Training in
the Development of Human Resources.

8 Recommendation (No. 116) concerning Reduction of Hours of

Work.

9 Convention (No. 110) and Recommendation (No. 110)

concerning Conditions of Employment of Plantation Workers;
Recommendation (No. 115) concerning Workers' Housing;
Recommendation (No. 69) concerning Medical Care; Convention
(No. 130) and Recommendation (No. 134) concerning Medical
Care and Sickness.

10 The ILO Conventions and Recommendations referred to are

listed in “Publications on Occupational Safety and Health”,
ILO, Geneva, 1976, pp. 1-3. An up-to-date list of Codes of
Practice and Guides can be found in the latest edition.

11 Convention No. 87, Article 2.

Number and title of Convention and Recommendation Relevant

paragraphs Recommendations

No. 175 concerning Safety and Health in Construction, 1988

36

No. 176 concerning Employment Promotion and Protection

against 13

Unemployment, 1988

No. 177 concerning Safety in the Use of Chemicals at Work,

1990 36

No. 180 concerning the Protection of Workers' Claims in the

event of 28

the Insolvency of their Employer, 1992

No. 181 concerning the Prevention of Major Industrial

Accidents, 1993 36

No. 183 concerning Safety and Health in Mines, 1995 36

12 Convention No. 98, Article 1(1).

13 Convention No. 98, Article 2(1).

14 Convention No. 98, Article 4.

15 Convention (No. 135) concerning Protection and

Facilities to be Afforded to Workers'

Representatives in the Undertaking.

16 Recommendation (No. 129) concerning Communications

between Management and Workers

within Undertakings.
17 Recommendation (No. 94) concerning Consultation and
Cooperation between Employers and

Workers of the Level of Undertaking; Recommendation (No.

129) concerning Communications

within the Undertaking.

18 Recommendation (No. 130) concerning the Examination of

Grievances within the Undertaking

with a view to their Settlement.

19 Convention (No. 29) concerning Forced or Compulsory

Labour; Convention (No. 105) concerning

the Abolition of Forced Labour; Recommendation (No. 35)

concerning Indirect Compulsion to

Labour.

20 Recommendation (No. 92) concerning Voluntary

Conciliation and Arbitration.

21 It was proposed that the Office make available, on

request, offprints of the international labour

Conventions and Recommendations referred to in the

Tripartite Declaration. ILO: Report of the

Reconvened Tripartite Advisory Meeting on the Relationship

of Multinational Enterprises and

Social Policy, Geneva, 4-7 April 1977, GB.204/4/2, 204th

Session, Geneva, 15-18 November 1977,

p. 2.
9 Social Accountability 8000

Leipziger, D. (2001) SA8000: The Definitive Guide to the

New Social Standard (London: FT

Prentice Hall).

—— (ed.) (2009) SA8000: The First Decade: Implementation,

Influence, and Impact (Sheffield,

UK: Greenleaf Publishing).

——, and E. Kaufman (2003) ‘SA8000: Human Rights in the

Workplace’, in R. Sullivan (ed.),

Business and Human Rights: Dilemmas and Solutions

(Sheffield, UK: Greenleaf Publishing):

197-206.

SAI (Social Accountability International) (2001) ‘Setting

Standards for a Just World’ (bro

chure; New York: SAI).

—— (2008) ‘SA8000: 2008 Drafters’ Notes’ (Prepared in

consultation with the Standard

Revision Committee of the SAI Board;

www.sa-intl.org/_data/n_0001/resources/live/

SA8000.2008DraftersNotes.pdf).

Wick, I. (2003) Workers’ Tool or PR Ploy? A Guide to Codes

of International Labour Practice (

Bonn/Siegburg: Friedrich Ebert Foundation and Südwind

Institut für Ökonomie und

Ökumene, 3rd rev. edn, www.fes.de).

Additional resource

Further reading

Smith, D. (2002) Demonstrating Corporate Values: Which

Standard for your Company? (London:

IBE).
Social Accountability International and CIPE (2009) ‘From
Words to Action: A Business Case

for Implementing Workplace Standards-Experiences from Key

Emerging Markets’.

Social Accountability International and UN Global Compact

(2010) ‘From Principles to

Practice: The Role of SA8000 in Implementing the UN Global

Compact’.

9 Craig Moss, Caroline Lewis and Jane Hwang, ‘UN Women and
SAI: Gender Equity Seal Certification System and
Implementation Strategy’, April 2012, p. 5.

Social Accountability 8000 (SA8000:2014) *

ABOUT THE STANDARD

This is the fourth issue of SA8000, a voluntary standard

for auditable third-party

verification, setting out the requirements to be met by

organisations, including the

establishment or improvement of workers’ rights, workplace

conditions and an

effective management system. However, certification is only

available per specific

worksite.

The foundational elements of this Standard are based on the

UN Declaration of

Human Rights, conventions of the ILO, international human

rights norms and national

labour laws. The normative SA8000 certification audit

reference documents are the

SA8000: 2014 Standard and the SA8000 Performance Indicator

Annex. Additionally, the

SA8000 Guidance Document facilitates compliance with the

Standard.

The SA8000 Performance Indicator Annex, a normative

document, sets out the

minimum performance expectations of an SA8000 certified

organisation. The Per

formance Indicator Annex is found online at the SAI

website (www.sa-intl.org/

index.cfm?fuseaction=Page.ViewPage&pageId=937).

The SA8000 Guidance Document provides interpretations of

SA8000 and how to

implement its requirements; provides examples of methods

for verifying compliance;

and serves as a handbook for auditors and for organisations

seeking SA8000

certification. The Guidance Document is found online at the

SAI website (www.sa

intl.org/index.cfm?fuseaction=Page.ViewPage&pageId=937).

Although SA8000 is universally applicable, and

certification is in principle available in

any state or industry, there are exceptions to SA8000

certification. The SAI Advisory

Board considers that there are some sectors where meeting

all Standard require

ments poses special difficulty due to industry norms and

technical needs. The list of

these current exceptions is found online at the SAI website

(www.sa-intl.org/

index.cfm?fuseaction=Page.ViewPage&pageId=937).

SA8000 is revised periodically as conditions change. Its

revisions also incorporate

corrections and improvements received from interested

parties. It is hoped that the

* Reprinted with the permission of Social Accountability

International. © SAI 2008. SA8000® is a registered
trademark of Social Accountability International.
Supersedes previous versions: 2001, 2004 and 2008

Standard, its Performance Indicator Annex and its Guidance

Document will continue to

improve, with the help of a wide variety of participants.

SAI welcomes your

suggestions as well.

I. INTRODUCTION

1. INTENT AND SCOPE

Intent: The intent of SA8000 is to provide an auditable,

voluntary standard, based on

the UN Declaration of Human Rights, ILO and other

international human rights and

labour norms and national labour laws, to empower and

protect all personnel within

an organisation’s control and influence who provide

products or services for that

organisation, including personnel employed by the

organisation itself and by its

suppliers, sub-contractors, sub-suppliers and home workers.

It is intended that an

organisation shall comply with this Standard through an

appropriate and effective

Management System.

Scope: It is universally applicable to every type of

organisation, regardless of e.g., its

size, geographic location or industry sector.

2. MANAGEMENT SYSTEM

Throughout your review of the next eight elements of

SA8000, the requirements of this

element – Management System – are central to their correct

implementation,
monitoring and enforcement. The Management System is the
operational map that

allows the organisation to achieve full and sustained

compliance with SA8000 while

continually improving, which is also known as Social

Performance.

When implementing the Management System element, it is a

required priority that

joint worker and management involvement be established,

incorporated and

maintained throughout the compliance process with all the

Standard’s elements. This

is particularly critical to identify and correct

non-conformances and to assure

continuing conformance.

II. NORMATIVE ELEMENTS AND THEIR INTERPRETATION

The organisation shall comply with local, national and all

other applicable laws, pre

vailing industry standards, other requirements to which the

organisation subscribes

and this Standard. When such laws, standards or other

requirements to which the

organisation subscribes and this Standard address the same

issue, the provision most

favourable to workers shall apply.

The organisation shall also respect the principles of the

following international

instruments:

III. DEFINITIONS

(organised either alphabetically or by logical flow)

1 Shall: In this Standard the term “shall” indicates a

requirement. Note: Italics have
been added for emphasis.

2 May: In this Standard the term “may” indicates a

permission. Note: Italics have

been added for emphasis.

3 Child: Any person under 15 years of age, unless the

minimum age for work or

mandatory schooling is higher by local law, in which case

the stipulated higher age

applies in that locality.

4 Child labour: Any work performed by a child younger than

the age(s) specified in

the above definition of a child, except as provided for by

ILO Recommendation 146.

ILO Convention 1 (Hours of Work –

Industry) and Recommendation 116

(Reduction of Hours of Work)

ILO Conventions 29 (Forced Labour) and

105 (Abolition of Forced Labour)

ILO Convention 87 (Freedom of

Association)

ILO Convention 98 (Right to Organise and

Collective Bargaining)

ILO Conventions 100 (Equal

Remuneration) and 111 (Discrimination –

Employment and Occupation)

ILO Convention 102 (Social Security

Minimum Standards)
ILO Convention 131 (Minimum Wage

Fixing)

ILO Convention 135 (Workers’

Representatives)

ILO Convention 138 and

Recommendation 146 (Minimum Age)

ILO Convention 155 and

Recommendation 164 (Occupational

Safety and Health) ILO Convention 159 (Vocational

Rehabilitation and Employment Disabled Persons) ILO
Convention 169 (Indigenous and Tribal Peoples) ILO
Convention 177 (Home Work) ILO Convention 181 (Private
Employment Agencies) ILO Convention 182 (Worst Forms of
Child Labour) ILO Convention 183 (Maternity Protection)
ILO Code of Practice on HIV/AIDS and the World of Work
Universal Declaration of Human Rights The International
Covenant on Economic, Social and Cultural Rights The
International Covenant on Civil and Political Rights The
United Nations Convention on the Rights of the Child The
United Nations Convention on the Elimination of All Forms
of Discrimination Against Women The United Nations
Convention on the Elimination of All Forms of Racial
Discrimination UN Guiding Principles on Business and Human
Rights

5 Collective bargaining agreement: A contract specifying

the terms and conditions

for work, negotiated between an organisation (e.g.

employer) or group of employers

and one or more worker organisation(s).

6 Corrective action: Action to eliminate the cause(s) and

root cause(s) of a detected

non-conformance. Note: Corrective action is taken to

prevent recurrence.

7 Preventive action: Action to eliminate the cause(s) and

root cause(s) of a potential
non-conformance. Note: Preventive action is taken to
prevent occurrence.

8 Forced or compulsory labour: All work or service that a

person has not offered

to do voluntarily and is made to do under the threat of

punishment or retaliation or

that is demanded as a means of repayment of debt.

9 Home worker: A person who is contracted by the

organisation or by its supplier,

sub-supplier or subcontractor, but does not work on their

premises.

10 Human trafficking: The recruitment, transfer, harbouring

or receipt of persons,

by means of the use of threat, force, deception or other

forms of coercion, for the

purpose of exploitation.

11 Interested parties: An individual or group concerned

with or affected by the social

performance and/or activities of the organisation.

12 Living Wage: The remuneration received for a standard

work week by a worker in

a particular place sufficient to afford a decent standard

of living for the worker and

her or his family. Elements of a decent standard of living

include food, water, housing,

education, health care, transport, clothing, and other

essential needs including

provision for unexpected events.

13 Non-conformance: Non-compliance with a requirement.

14 Organisation: The entirety of any business or

non-business entity responsible for

implementing the requirements of this Standard, including

all personnel employed by

the organisation. Note: For example, organisations include:

companies, corporations,

farms, plantations, cooperatives, NGOs and government

institutions.

15 Personnel: All individuals employed or contracted by an

organisation, including

but not limited to directors, executives, managers,

supervisors, workers and contract

workers such as security guards, canteen workers, dormitory

workers and cleaning

workers.

16 Worker: All non-management personnel.

17 Private employment agency: Any entity, independent of

the public authorities,

which provides one or more of the following labour market

services:

l Matching offers of and applications for employment,

without the agency becoming a party to the employment
relationship(s) which may occur;

l Employing workers with a view to making them available to

a third party entity, which assigns their tasks and
supervises the execution of these tasks.

18 Remediation of child labourers: All support and actions

necessary to ensure the

safety, health, education and development of children who

have been subjected to

child labour, as defined above, and whose work has been

terminated.

19 Risk assessment: A process to identify the health,

safety and labour policies and

practices of an organisation and to prioritise associated

risks.
20 SA8000 worker representative(s): One or more worker
representative(s) freely

elected by workers to facilitate communication with the

management representa

tive(s) and senior management on matters related to SA8000.

In unionised facilities

the worker representative(s) shall be from the recognised

trade union(s), if they

choose to serve. In cases where the union(s) does not

appoint a representative or the

organisation is not unionised, workers may freely elect

the worker representative(s)

for that purpose.

21 Social performance: An organisation’s achievement of

full and sustained compli

ance with SA8000 while continually improving.

22 Stakeholder engagement: The participation of interested

parties, including but

not limited to the organisation, trade unions, workers,

worker organisations,

suppliers, contractors, buyers, consumers, investors, NGOs,

media and local and

national government officials.

23 Supplier/subcontractor: Any entity or individual(s) in

the supply chain that

directly provides the organisation with goods or services

integral to, utilised in or for

the production of the organisation’s goods or services.

24 Sub-supplier: Any entity or individual(s) in the supply

chain that provides the

supplier with goods and/or services integral to, utilised

in or for the production of the
supplier’s or the organisation’s goods or services.

25 Worker organisation: An autonomous voluntary association

of workers organised

for the purpose of furthering and defending the rights and

interests of workers.

26 Young worker: Any worker under the age of 18 but over

the age of a child, as

defined above.

IV. SOCIAL ACCOUNTABILITY REQUIREMENTS

1. CHILD LABOUR

Criteria:

1.1 The organisation shall not engage in or support the use

of child labour as defined

above.

1.2 The organisation shall establish, document, maintain

and effectively communi

cate to personnel and other interested parties, written

policies and procedures for

remediation of child labourers, and shall provide adequate

financial and other support

to enable such children to attend and remain in school

until no longer a child as

defined above.

1.3 The organization may employ young workers, but where

such young workers are

subject to compulsory education laws, they shall work only

outside of school hours.

Under no circumstances shall any young worker’s school,

work and transportation

time exceed a combined total of 10 hours per day, and in no

case shall young workers
work more than 8 hours a day. Young workers may not work
during night hours.

1.4 The organisation shall not expose children or young

workers to any situations – in

or outside of the workplace – that are hazardous or unsafe

to their physical and

mental health and development.

2. FORCED OR COMPULSORY LABOUR

Criteria:

2.1 The organisation shall not engage in or support the use

of forced or compulsory

labour, including prison labour, as defined in Convention

29, shall not retain original

identification papers and shall not require personnel to

pay ‘deposits’ to the organisa

tion upon commencing employment.

2.2 Neither the organisation nor any entity supplying

labour to the organisation shall

withhold any part of any personnel’s salary, benefits,

property or documents in order

to force such personnel to continue working for the

organisation.

2.3 The organisation shall ensure that no employment fees

or costs are borne in

whole or in part by workers.

2.4 Personnel shall have the right to leave the workplace

premises after completing

the standard workday and be free to terminate their

employment provided that they

give reasonable notice to their organisation.

2.5 Neither the organisation nor any entity supplying

labour to the organisation shall
engage in or support human trafficking.

3. HEALTH AND SAFETY

Criteria:

3.1 The organisation shall provide a safe and healthy

workplace environment and

shall take effective steps to prevent potential health and

safety incidents and occu

pational injury or illness arising out of, associated with

or occurring in the course of

work. It shall minimise or eliminate, so far as is

reasonably practicable, the causes of

all hazards in the workplace environment, based upon the

prevailing safety and health

knowledge of the industry sector and of any specific

hazards.

3.2 The organisation shall assess all the workplace risks

to new, expectant and

nursing mothers including those arising out of their work

activity, to ensure that all

reasonable steps are taken to remove or reduce any risks to

their health and safety.

3.3 Where hazards remain after effective minimisation or

elimination of the causes of

all hazards in the workplace environment, the organisation

shall provide personnel

with appropriate personal protective equipment as needed at

its own expense. In the

event of a work-related injury the organisation shall

provide first aid and assist the

worker in obtaining follow-up medical treatment.

3.4 The organisation shall appoint a senior management

representative to be respon
sible for ensuring a safe and healthy workplace environment
for all personnel and for

implementing this Standard’s Health and Safety requirements.

3.5 A Health and Safety Committee, comprised of a

well-balanced group of manage

ment representatives and workers, shall be established and

maintained. Unless

otherwise specified by law, at least one worker member(s)

on the Committee shall be

by recognised trade union(s) representative(s), if they

choose to serve. In cases where

the union(s) does not appoint a representative or the

organisation is not unionised,

workers shall appoint a representative(s) as they deem

appropriate. Its decisions shall

be effectively communicated to all personnel. The Committee

shall be trained and

retrained periodically in order to be competently committed

to continually improving

the health and safety conditions in the workplace. It

shall conduct formal, periodic

occupational health and safety risk assessments to identify

and then address current

and potential health and safety hazards. Records of these

assessments and corrective

and preventive actions taken shall be kept.

3.6 The organisation shall provide to personnel, on a

regular basis, effective health

and safety training, including on-site training and, where

needed, job-specific train

ing. Such training shall also be repeated for new and

reassigned personnel, where
incidents have occurred, and when changes in technology
and/or the introduction of

new machinery present new risks to the health and safety of

personnel.

3.7 The organisation shall establish documented procedures

to detect, prevent,

minimise, eliminate or otherwise respond to potential risks

to the health and safety

of personnel. The organisation shall maintain written

records of all health and safety

incidents that occur in the workplace and in all residences

and property provided by

the organisation, whether it owns, leases or contracts the

residences or property from

a service provider.

3.8 The organisation shall provide, for use by all

personnel, free access to: clean toilet

facilities, potable water, suitable spaces for meal breaks,

and, where applicable,

sanitary facilities for food storage.

3.9 The organisation shall ensure that any dormitory

facilities provided for personnel

are clean, safe and meet their basic needs, whether it

owns, leases or contracts the

dormitories from a service provider.

3.10 All personnel shall have the right to remove

themselves from imminent serious

danger without seeking permission from the organisation.

4. FREEDOM OF ASSOCIATION & RIGHT TO COLLECTIVE BARGAINING

Criteria:

4.1 All personnel shall have the right to form, join and
organise trade union(s) of their
choice and to bargain collectively on their behalf with the
organisation. The organ

isation shall respect this right and shall effectively

inform personnel that they are free

to join a worker organisation of their choosing without any

negative consequences or

retaliation from the organisation. The organisation shall

not interfere in any way with

the establishment, functioning or administration of

workers’ organisation(s) or collec

tive bargaining.

4.2 In situations where the right to freedom of association

and collective bargaining

are restricted under law, the organisation shall allow

workers to freely elect their own

representatives.

4.3 The organisation shall ensure that union members,

representatives of workers

and any personnel engaged in organising workers are not

subjected to discrimination,

harassment, intimidation or retaliation for being union

members, representative(s) of

workers or engaged in organising workers, and that such

representatives have access

to their members in the workplace.

5. DISCRIMINATION

Criteria:

5.1 The organisation shall not engage in or support

discrimination in hiring, remuner

ation, access to training, promotion, termination or

retirement based on race, national
or territorial or social origin, caste, birth, religion,
disability, gender, sexual orienta

tion, family responsibilities, marital status, union

membership, political opinions, age

or any other condition that could give rise to

discrimination.

5.2 The organisation shall not interfere with the exercise

of personnel’s rights to

observe tenets or practices or to meet needs relating to

race, national or social origin,

religion, disability, gender, sexual orientation, family

responsibilities, union member

ship, political opinions or any other condition that could

give rise to discrimination.

5.3 The organisation shall not allow any behaviour that is

threatening, abusive,

exploitative or sexually coercive, including gestures,

language and physical contact, in

the workplace and in all residences and property provided

by the organisation,

whether it owns, leases or contracts the residences or

property from a service pro

vider.

5.4 The organisation shall not subject personnel to

pregnancy or virginity tests under

any circumstances.

6. DISCIPLINARY PRACTICES

Criterion:

6.1 The organisation shall treat all personnel with dignity

and respect. The organisa

tion shall not engage in or tolerate the use of corporal

punishment, mental or physical
coercion or verbal abuse of personnel. No harsh or inhumane
treatment is allowed.

7. WORKING HOURS

Criteria:

7.1 The organisation shall comply with applicable laws,

collective bargaining agree

ments (where applicable) and industry standards on working

hours, breaks and public

holidays. The normal work week, not including overtime,

shall be defined by law but

shall not exceed 48 hours.

7.2 Personnel shall be provided with at least one day off

following every six consecu

tive days of working. Exceptions to this rule apply only

where both of the following

conditions exist: a) National law allows work time

exceeding this limit; and b) A freely negotiated collective
bargaining agreement is in force that allows work time
averaging, including adequate rest periods.

7.3 All overtime work shall be voluntary, except as

provided in 7.4 below, shall not

exceed 12 hours per week and shall not be requested on a

regular basis.

7.4 In cases where overtime work is needed in order to meet

short-term business

demand and the organisation is party to a freely negotiated

collective bargaining

agreement representing a significant portion of its

workforce, the organisation may

require such overtime work in accordance with such

agreement. Any such agreement

must comply with the other requirements of this Working

Hours element.
8. REMUNERATION

Criteria:

8.1 The organisation shall respect the right of personnel

to a living wage and ensure

that wages for a normal work week, not including overtime,

shall always meet at least

legal or industry minimum standards, or collective

bargaining agreements (where

applicable). Wages shall be sufficient to meet the basic

needs of personnel and to

provide some discretionary income.

8.2 The organisation shall not make deductions from wages

for disciplinary purposes.

Exception to this rule applies only when both of the

following conditions exist: a) Deductions from wages for
disciplinary purposes are permitted by national law; and b)
A freely negotiated collective bargaining agreement is in
force that permits this practice.

8.3 The organisation shall ensure that personnel’s wages

and benefits composition

are detailed clearly and regularly to them in writing for

each pay period. The organ

isation shall lawfully render all wages and benefits due

in a manner convenient to

workers, but in no circumstances in delayed or restricted

forms, such as vouchers,

coupons or promissory notes.

8.4 All overtime shall be reimbursed at a premium rate as

defined by national law or

established by a collective bargaining agreement. In

countries where a premium rate

for overtime is not regulated by law or there is no

collective bargaining agreement,
personnel shall be compensated for overtime at the
organisation’s premium rate or

at a premium rate equal to prevailing industry standards,

whichever is higher.

8.5 The organisation shall not use labour-only contracting

arrangements, consecu

tive short-term contracts and/or false apprenticeship or

other schemes to avoid

meeting its obligations to personnel under applicable laws

and regulations pertaining

to labour and social security.

9. MANAGEMENT SYSTEM

Criteria:

9.1 Policies, Procedures and Records

9.1.1 Senior management shall write a policy statement to

inform personnel, in all

appropriate languages, that it has chosen to comply with

SA8000.

9.1.2 This policy statement shall include the

organisation’s commitment to

conform to all requirements of the SA8000 Standard and to

respect the international

instruments as listed in the previous section on Normative

Elements and Their Inter

pretation. The statement shall also commit the

organisation to comply with: national

laws, other applicable laws and other requirements to which

the organisation sub

scribes.

9.1.3 This policy statement and the SA8000 Standard shall

be prominently and

conspicuously displayed, in appropriate and comprehensible

form, in the workplace

and in residences and property provided by the

organisation, whether it owns, leases

or contracts the residences or property from a service

provider.

9.1.4 The organisation shall develop policies and

procedures to implement the

SA8000 Standard.

9.1.5 These policies and procedures shall be effectively

communicated and made

accessible to personnel in all appropriate languages. These

communications shall

also be clearly shared with customers, suppliers,

sub-contractors and sub-suppliers.

9.1.6 The organisation shall maintain appropriate records

to demonstrate confor

mance to and implementation of the SA8000 standard,

including the Management

System requirements contained in this element. Associated

records shall be kept and

written or oral summaries given to the SA8000 worker

representative(s).

9.1.7 The organisation shall regularly conduct a management

review of its policy

statement, policies, procedures implementing this Standard

and performance results,

in order to continually improve.

9.1.8 The organisation shall make its policy statement

publicly available in an

effective form and manner to interested parties, upon

request.

9.2 Social Performance Team

9.2.1 A Social Performance Team (SPT) shall be established
to implement all ele

ments of SA8000. The Team shall include a balanced

representation of: a) SA8000 worker representative(s); and
b) management.

Compliance accountability for the Standard shall solely

rest with Senior Management.

9.2.2 In unionised facilities, worker representation on the

SPT shall be by recog

nised trade union(s) representative(s), if they choose to

serve. In cases where the

union(s) does not appoint a representative or the

organisation is not unionised,

workers may freely elect one or more SA8000 worker

representative(s) from among

themselves for this purpose. In no circumstances shall the

SA8000 worker represen

tative(s) be seen as a substitute for trade union

representation.

9.3 Identification and Assessment of Risks

9.3.1 The SPT shall conduct periodic written risk

assessments to identify and

prioritise the areas of actual or potential non-conformance

to this Standard. It shall

also recommend actions to Senior Management that address

these risks. Actions to

address these risks shall be prioritised according to

their severity or where a delay in

responding would make it impossible to address.

9.3.2 The SPT shall conduct these assessments based on

their recommended data

and data collection techniques and in meaningful

consultation with interested parties.
9.4 Monitoring

9.4.1 The SPT shall effectively monitor workplace

activities for: a) compliance with this Standard; b)
implementation of actions to effectively address the risks
identified by the SPT; and c) for the effectiveness of
systems implemented to meet the organisation’s policies and
the requirements of this Standard.

It shall have the authority to collect information from or

include interested parties

(stakeholders) in its monitoring activities. It shall also

liaise with other departments

to study, define, analyse and/or address any possible

non-conformance(s) to the

SA8000 Standard.

9.4.2 The SPT shall also facilitate routine internal audits

and produce reports for

senior management on the performance and benefits of

actions taken to meet the

SA8000 Standard, including a record of corrective and

preventive actions identified.

9.4.3 The SPT shall also hold periodic meetings to review

progress and identify

potential actions to strengthen implementation of the

Standard.

9.5 Internal Involvement and Communication

9.5.1 The organisation shall demonstrate that personnel

effectively understand

the requirements of SA8000, and shall regularly

communicate the requirements of

SA8000 through routine communications.

9.6 Complaint Management and Resolution

9.6.1 The organisation shall establish a written grievance

procedure that is
confidential, unbiased, non-retaliatory and accessible and
available to personnel and

interested parties to make comments, recommendations,

reports or complaints

concerning the workplace and/or non-conformances to the

SA8000 Standard.

9.6.2 The organisation shall have procedures for

investigating, following up on and

communicating the outcome of complaints concerning the

workplace and/or non

conformances to this Standard or of its implementing

policies and procedures. These

results shall be freely available to all personnel and,

upon request, to interested

parties.

9.6.3 The organisation shall not discipline, dismiss or

otherwise discriminate

against any personnel or interested party for providing

information on SA8000

compliance or for making other workplace complaints.

9.7 External Verification and Stakeholder Engagement

9.7.1 In the case of announced and unannounced audits for

the purpose of certi

fying its compliance with the requirements of this

Standard, the organisation shall

fully cooperate with external auditors to determine the

severity and frequency of any

problems that arise in meeting the SA8000 Standard.

9.7.2 The organisation shall participate in stakeholder

engagement in order to

attain sustainable compliance with the SA8000 Standard.

9.8 Corrective and Preventive Actions

9.8.1 The organisation shall formulate policies and
procedures for the prompt

implementation of corrective and preventive actions and

shall provide adequate

resources for them. The SPT shall ensure that these

actions are effectively imple

mented.

9.8.2 The SPT shall maintain records, including timelines,

that list, at minimum,

non-conformances related to SA8000, their root causes, the

corrective and preventive

actions taken and implementation results.

9.9 Training and Capacity Building

9.9.1 The organisation shall implement a training plan for

all personnel to effec

tively implement the SA8000 Standard as informed by the

results of risk assessments.

The organisation shall periodically measure the

effectiveness of training and record

their nature and frequency.

9.10 Management of Suppliers and Contractors

9.10.1 The organisation shall conduct due diligence on its

suppliers/subcontrac

tors, private employment agencies and sub-suppliers’

compliance with the SA8000

Standard. The same due diligence approach shall be applied

when selecting new

suppliers/subcontractors, private employment agencies and

sub-suppliers. The

minimum activities for the organisation to fulfil this

requirement shall be recorded
and shall include: a) effectively communicating the
requirements of this Standard to senior leadership of
suppliers/subcontractors, private employment agencies and
sub-suppliers; b) assessing significant risks of
non-conformance by suppliers/subcontractors, private
employment agencies and sub-suppliers. [Note: an
explanation of ‘significant risk’ is found in the guidance
document]; c) making reasonable efforts to ensure that
these significant risks are adequately addressed by
suppliers/subcontractors, private employment agencies and
sub-suppliers and by the organisation where and when
appropriate, and prioritised according to the
organisation’s ability and resources to influence these
entities; [Note: an explanation of ‘reasonable effort’ is
found in the guidance document]; and d) establishing
monitoring activities and tracking performance of
suppliers/subcontractors, private employment agencies and
sub-suppliers to ensure that these significant risks are
effectively addressed.

9.10.2 Where the organisation receives, handles or promotes

goods and/or services

from suppliers /subcontractors or sub-suppliers who are

classified as home workers,

the organisation shall take effective actions to ensure

that such home workers are

afforded a level of protection substantially equivalent to

that afforded to the organisa

tion’s other workers under the requirements of this

Standard.
11 Ethical Trading Initiative: Base Code

Cowe, R. (2001) ‘Hard Labour to Put Code into Practice’,

Financial Times, 12 June 2001: 12.

ETI (Ethical Trading Initiative) (1998) ‘Base Code’,

www.ethicaltrade.org/eti-base-code.

ETI (Ethical Trading Initiative) (2013) ‘ETI Briefing

Promoting Worker–Management Dialogue: Lessons from ETI’s
Decent Work Project’, 19 September 2013;
www.ethicaltrade.org/
resources/key-eti-resources/decent-work-briefing.

Short, C. (1998) Speech by the Right Honourable Clare

Short, MP, First Annual Conference of the Ethical Trading
Initiative, 2 December 1998,
www.dfid.gov.uk/News/Speeches/files/ sp2dec.html.

Additional resources

Further reading

ETI (Ethical Trading Initiative) (2013) ‘Freedom of

Association in Company Supply Chains’, June 2013;

Wick, I. (2003) Workers’ Tool or PR Ploy? A Guide to Codes

of International Labour Practice ( Bonn/Siegburg: Friedrich
Ebert Foundation and Südwind Institut für Ökonomie und
Ökumene, 3rd rev. edn, www.fes.de).

Website

Ethical Trading Initiative: www.ethicaltrade.org

The ETI Base Code *

1. Employment is freely chosen

1.1 There is no forced, bonded or involuntary prison labour.

1.2 Workers are not required to lodge “deposits” or their

identity papers with their

employer and are free to leave their employer after

reasonable notice.

2. Freedom of association and the right to collective

bargaining are respected
2.1 Workers, without distinction, have the right to join or
form trade unions of their

own choosing and to bargain collectively.

2.2 The employer adopts an open attitude towards the

activities of trade unions and

their organisational activities.

2.3 Workers representatives are not discriminated against

and have access to carry

out their representative functions in the workplace.

2.4 Where the right to freedom of association and

collective bargaining is restricted

under law, the employer facilitates, and does not hinder,

the development of parallel

means for independent and free association and bargaining.

3. Working conditions are safe and hygienic

3.1 A safe and hygienic working environment shall be

provided, bearing in mind the

prevailing knowledge of the industry and of any specific

hazards. Adequate steps shall

be taken to prevent accidents and injury to health arising

out of, associated with, or

occurring in the course of work, by minimising, so far as

is reasonably practicable, the

causes of hazards inherent in the working environment.

3.2 Workers shall receive regular and recorded health and

safety training, and such

training shall be repeated for new or reassigned workers.

3.3 Access to clean toilet facilities and to potable water,

and, if appropriate, sanitary

facilities for food storage shall be provided.

3.4 Accommodation, where provided, shall be clean, safe,

and meet the basic needs

of the workers.

* Reproduced with the permission of the Ethical Trading

Initiative.

3.5 The company observing the code shall assign

responsibility for health and safety

to a senior management representative.

4. Child labour shall not be used

4.1 There shall be no new recruitment of child labour.

4.2 Companies shall develop or participate in and

contribute to policies and pro

grammes which provide for the transition of any child found

to be performing child

labour to enable her or him to attend and remain in quality

education until no longer

a child; “child” and “child labour” being defined in the

appendices.

4.3 Children and young persons under 18 shall not be

employed at night or in

hazardous conditions.

4.4 These policies and procedures shall conform to the

provisions of the relevant ILO

standards.

5. Living wages are paid

5.1 Wages and benefits paid for a standard working week

meet, at a minimum,

national legal standards or industry benchmark standards,

whichever is higher. In any

event wages should always be enough to meet basic needs and

to provide some

discretionary income.
5.2 All workers shall be provided with written and
understandable Information about

their employment conditions in respect to wages before they

enter employment and

about the particulars of their wages for the pay period

concerned each time that they

are paid.

5.3 Deductions from wages as a disciplinary measure shall

not be permitted nor shall

any deductions from wages not provided for by national law

be permitted without the

expressed permission of the worker concerned. All

disciplinary measures should be

recorded.

6. Working hours are not excessive

6.1 Working hours comply with national laws and benchmark

industry standards,

whichever affords greater protection.

6.2 In any event, workers shall not on a regular basis be

required to work in excess

of 48 hours per week and shall be provided with at least

one day off for every 7 day

period on average. Overtime shall be voluntary, shall not

exceed 12 hours per week,

shall not be demanded on a regular basis and shall always

be compensated at a

premium rate.

7. No discrimination is practised

7.1 There is no discrimination in hiring, compensation,

access to training, promotion,

termination or retirement based on race, caste, national

origin, religion, age, disabil

ity, gender, marital status, sexual orientation, union

membership or political affilia

tion.

8. Regular employment is provided

8.1 To every extent possible work performed must be on the

basis of recognised

employment relationship established through national law

and practice.

8.2 Obligations to employees under labour or social

security laws and regulations

arising from the regular employment relationship shall not

be avoided through the

use of labour-only contracting, sub- contracting, or

home-working arrangements, or

through apprenticeship schemes where there is no real

intent to impart skills or

provide regular employment, nor shall any such obligations

be avoided through the

excessive use of fixed-term contracts of employment.

9. No harsh or inhumane treatment is allowed

9.1 Physical abuse or discipline, the threat of physical

abuse, sexual or other

harassment and verbal abuse or other forms of intimidation

shall be prohibited.

The provisions of this code constitute minimum and not

maximum standards, and this code

should not be used to prevent companies from exceeding

these standards. Companies applying

this code are expected to comply with national and other

applicable law and, where the

provisions of law and this Base Code address the same

subject, to apply that provision which

affords the greater protection.

Note: We have made every effort to ensure that the

translations of the ETI Base Code and

Principles of Implementation are as complete and accurate

as possible. However, please note

that in both cases it is the English language documents

which should be treated as the official

versions.

ETI Principles of Implementation

Final Text 19 February 2009

PREAMBLE

The purpose of the ETI is to promote improved conditions

for workers through the

implementation of codes of labour practice based on

national law and international

labour standards. By becoming a member of ETI, a company

commits itself to adopt

and implement the ETI Base Code and to undertake activities

intended to promote

respect for workers’ rights and to achieve real

improvements in working conditions

within their supply chain.

Member companies should give special attention to the

rights of workers most vul

nerable to abusive labour practices, notably women,

homeworkers, agency workers,

temporary workers, migrant workers and smallholders.

These Principles set out the approaches to ethical trade

expected of ETI members. It

is recognised that members will apply these principles in

different ways according to

their circumstances, but all members are expected to work

towards their full imple

mentation and to report on how they are applying the

Principles each year. Expecta

tions of achievement will be based on a performance

framework agreed by members.

THE PRINCIPLES

1. Commitment to ethical trading

1.1 Ethical trading, including the adoption of the Base

Code and these Principles, is

recognised at the highest level as a company objective and

the implementation of this

policy is assigned to a senior manager.

1.2 Commitment to ethical trading is communicated publicly,

throughout the com

pany, to its suppliers and to the people who work in its

supply chain. * Reproduced with the permission of the
Ethical Trading Initiative.

1.3 The company makes available sufficient resources to

ensure that its commit

ments are fulfilled and that there is continuous

improvement in the application of

these principles.

1.4 The company requires its suppliers to comply with the

Base Code and also

requires them to engage with their own suppliers to comply

with the Base Code

throughout the supply chain.

1.5 The company has a strategy for implementing the Base

Code and these Prin

ciples, based on time-bound measurable actions.

1.6 The company plays an active role in ETI caucuses and
activities and applies good

practice learning wherever possible.

1.7 In undertaking ethical trade activities, the company

works collaboratively with

other ETI members and with other parties including

suppliers affected by its activities.

2. Integrating ethical trade into company culture and

business practices

2.1 The company selects suppliers with good labour

practices that are likely to

observe the provisions of the Base Code.

2.2 The company recognises the contribution that stable

business relationships can

make to the observance of good labour practices and

endeavours to establish long

term relationships with its suppliers.

2.3 The company ensures that the terms of agreements with

its suppliers such as

prices, lead times and quantities are consistent with the

ability of the supplier to

observe the provisions of the Base Code.

2.4 Buying staff and other personnel whose decisions may

affect working conditions

and labour practices in the supply chain are made aware of

the potential impact of

such decisions. They are provided with training and

guidelines that enable them to

carry out company ethical trading policy and their

performance is assessed and

managed accordingly
3. Capacity-building for suppliers and others

3.1 The company provides information, guidance, training

and support for its sup

pliers to observe the Base Code and to comply with any

other policies on ethical trade

required by the company of its suppliers.

3.2 The company seeks the views of its suppliers over their
ability to meet the Base

Code given existing buying practices, and assists them to

meet their concerns.

3.3 The company ensures that all workers covered by the

code, and their represen

tatives, are aware of the provisions of the Base Code and

of the commitments to

ethical trade that it has made through its ETI membership.

3.4 The company supports and encourages the development of

effective management

systems among its suppliers and mature systems of

industrial relations that require

full respect for freedom of association and collective

bargaining.

4. Identifying problems in the supply chain

4.1 The company undertakes activities to be aware of the

working conditions and

labour practices in its supply chain in order to understand

the nature and location of

risks to ethical trade, uses this information and shares it

with other members.

4.2 The company gathers and analyses verifiable information

about its suppliers’

performance on complying with the Base Code and uses this

information to inform its
sourcing decisions.

4.3 The company ensures that mechanisms exist to enable

workers in its supply chain

to report confidentially and without detriment any failure

to observe the Base Code

and to deal with such complaints.

5. Improvement actions

5.1 The company works with its suppliers to rectify any

problems identified and

implement improvements that are consistent with the

provisions of the Base Code.

5.2 The company negotiates time-bound plans for

improvements with suppliers and

makes sure that the improvements are actually made.

5.3 The company provides support and advice to help

suppliers make agreed improvements.

5.4 The Company recognises the fundamental importance of

independent and demo

cratic organisations of workers’ own choosing – commonly

known as trade unions –

in achieving sustainable improvements and encourages an

open and positive attitude

towards trade unions and collective bargaining because they

are the essential

elements of all mature systems of industrial relations.

5.5 The company terminates supplier relationships where

serious breaches of the

Code persist only after reasonable attempts have been made

to work with the supplier

to implement improvements, and where there is no reasonable

prospect of securing

improvements. Such terminations should be carried out in a

responsible way.

5.6 The company works with suppliers, other ETI members and
other parties affected

by its activities to address the root causes of

non-compliances through the design and

implementation of activities which identify and test good

practice and effective solutions.

6. Transparency

6.1 The company reports fairly and accurately on its

ethical trade activities.

6.2 The company complies with ETI reporting requirement.

6.3 The company reports publicly, and in more detail as its

experience grows, on its

commitments to ETI, its ethical trade activities and

impacts.

6.4 The company encourages its suppliers to be transparent

about their ethical trade

performance.

6.5 The company responds rapidly, fully and openly to any

complaints about code

violations in its supply chain.

Part V: From environment to sustainability

Elkington, J. (1997) Cannibals with Forks: The Triple

Bottom Line of 21st Century Business (Oxford, UK: Capstone
Publishing).

Gladwin, T. (1997) ‘Sustainable Development: Is It

Industry’s Business?’, Business and the Environment,
February 1997.

WCED (World Commission on Environment and Development)

(1987) Our Common Future (Brundtland Report; Oxford, UK:
Oxford University Press).
Part VI: Combating corruption

CCBIBT (Council on Combating Bribery in International

Business Transactions) (1997) ‘Annex’, in Revised
Recommendation of the Council on Combating Bribery in
International Business Transactions (Paris: CCBIBT, adopted
on 23 May 1997).

Economist (2002) ‘The Worm That Never Dies’, The Economist,

2–8 March 2002: 11.

FCPA (Foreign Corrupt Practices Act) (1977) Current through

Pub. L 105-366 (November 10, 1998) (Washington, DC: US
Government Printing Office).

9 For the text of the Convention, see

www.unodc.org/pdf/corruption/publications_
unodc_convention-e.pdf (accessed May 2010).

ICC (International Chamber of Commerce) (2000) Fighting

Bribery: A Corporate Practices

Manual (Paris: ICC).

IMF (International Monetary Fund) (2001) OECD Convention on

Combating Bribery of Foreign

Public Officials in International Business Transactions

(Policy Development and Review;

Washington, DC: IMF, 18 September 2001).

Low, L. (1998) ‘Transnational Corruption: New Rules for Old

Temptations, New Players to

Combat a Perennial Evil’, in Proceedings of the 92nd Annual

Meeting: The Challenge of Non

state Actors (Washington, DC: American Society of

International Law, 1–4 April 1998).

OECD (Organisation for Economic Co-operation and

Development) (2002) No Longer Business

as Usual: Fighting Bribery and Corruption (Paris: OECD,

October 2002).
Part VII: Corporate governance

Cadbury, A. (1987) ‘Ethical Managers Make Their Own Rules’,

Harvard Business Review (September/October 1987).

Cheffins, B. (2000) ‘Current Trends in Corporate

Governance: Going from London to Milan via Toronto’, Duke
Journal of Comparative and International Law 10.

Committee on the Financial Aspects of Corporate Governance

(1992) Report with Code of Best Practice (‘The Cadbury
Report’; London: Gee Publishing). 5 See
www.fsa.gov.uk/pubs/ukla/lr_comcode3.pdf.

Economist (2003) ‘Europe’s Enron: Ahold’s Shocking

Accounting’, The Economist, 1 March 2003.

Elkington, J. (1997) Cannibals with Forks: The Triple

Bottom Line of 21st Century Business (Oxford, UK: Capstone
Publishing).

IBLF (International Business Leaders’ Forum) (undated)

‘Business Standards and Corporate Governance Framing the
Issue’, www.iblf.org, accessed 2003.

Institute of Directors in Southern Africa (1994) The King

Report on Corporate Governance for South Africa
(Johannesburg: Institute of Directors in Southern Africa).

McIntosh, M., D. Leipziger, K. Jones and G. Coleman (1998)

Corporate Citizenship: Successful Strategies of Responsible
Companies (London: FT Pitman).

OECD (Organisation for Economic Co-operation and

Development) (1999) Principles of Corporate Governance
(Paris: OECD).

Sullivan, R. (2002) ‘One Step Forward or Two Steps Back for

Effective Self-regulation?’, Journal of Corporate
Citizenship 8 (Winter 2002): 91-104.
21 Framework agreements

Graham, I., and A. Bibby (2000) ‘Global Labour Agreements:

A Framework for Rights’, The

World of Work 45 (December 2002,

www.ilo.org/wcmsp5/groups/public/---dgreports/--

dcomm/documents/publication/dwcms_080610.pdf).

IFBWW (International Federation of Building and Wood

Workers) (2003) IFBWW Strategy on

Multinational Corporations (MNC): A Co-ordinated Approach

to Framework Agreements and

Company Codes of Conduct, Corporate Campaigns and European

Works Councils (Carouge,

Switzerland: IFBWW).

Statoil (undated) The Exchange of Information and the

Development of Good Working Practice

within Statoil Worldwide Operations (submission to the

Global Compact Learning Forum;

Stavanger, Norway: Statoil).

Westgaard, G. (2001) ‘Charting the Way Forward’,

presentation at the meeting of the Global

Compact Learning Forum, Denham, UK, 29–30 October 2001.

Wick, I. (2003) Workers’ Tool or PR Ploy? A Guide to Codes

of International Labour Practice (

Bonn/Siegburg: Friedrich Ebert Foundation and Südwind

Institut für Ökonomie und

Ökumene, 3rd rev. edn, www.fes.de).

Wilke, Peter, André Sobczak and Isabelle Schömann, ‘Code of

Conduct and International

Framework Agreements: New Forms of Governance at Company

Level. Case Study: Ikea’,

February 2008,
www.eurofound.europa.eu/publications/htmlfiles/ef07927.htm,
accessed

May 2010.

8 Personal communication with the author.

Agreement between lndustri Energi/

lndustriALL Global Union and Statoil:

“The exchange of information and the development of good

working practice within Statoil world wide operations”

1 PREAMBLE

The parties to this agreement are Statoil, herein referred

to as Statoil, Industri Energi,

the Norwegian Union Partner herein referred to as Industri

Energi and lndustriALL

Global Union, herein referred to as lndustriALL.

Hereinafter, all parties to this Agree

ment shall be referred to as Parties.

The purpose of the agreement is to create an open channel

of information between

the Parties about industrial relations issues in order to

continuously improve and

develop good work practices in Statoil’s worldwide

operations.

This agreement covers all activities where Statoil has

direct control, the realisation of

which shall be in accordance with the national law and

practice of the host country

within which Statoil is located. Where Statoil does not

have overall control, it will

exercise its best efforts in order to secure compliance

with the standards set out in

this agreement. Statoil will encourage compliance with the

standards towards its
subcontractors and licensees

Based on the Parties’ common recognition of fundamental

human rights and Statoil’s

own values, the purpose is to monitor the practical

application of the agreed princi

ples and to discuss any improvements in the working

practices or any other positive

contribution the Parties may have.

2 HUMAN RIGHTS, INDUSTRIAL RELATIONS AND HSE ISSUES

Statoil and Industri Energi/lndustriALL affirm their

support for fundamental human

rights in the community and in the place of work.

Furthermore, the Parties recognise

the importance of protecting safety, health and well being

at work and share the con

cern about the impact of exploitation that production, use

and disposal may have upon

* Reprinted with the permission of IndustriALL Global Union

www.industriALL-union.org.

the natural and human environment. This agreement is

intended to ensure the best

possible standards of protection for those employed in our

business.

The respect of human rights includes:

l The right of every employee to be represented by a union

of his or her own choice and the basic trade union rights
as defined by ILO Convention 87 and 98 covering freedom of
association and the right to organise, as well as the right
to engage in collective bargaining. Statoil therefore
agrees not to oppose efforts to unionise its employees.

l A commitment not to employ forced or bonded labour as

proscribed in the ILO Conventions 29 and 105 or otherwise.

l A commitment to employ no child labour as proscribed by

ILO Convention 138.

l A commitment to exercise equality of opportunity and

treatment in recruitment, employment, training and career
development, including equal remuneration for men and women
for work of equal value, and the prevention of
discrimination*, in respect of employment and occupation as
required by the ILO Conventions 100 and 111 respectively.

l A commitment to pay fair wages and benefits according to

good industry standards in the country concerned.

l A commitment to provide a safe and healthy work

environment, deploying common “best practice” standards.

3 ENVIRONMENTAL ISSUES

Statoil and Industri Energi/IndustriALL will cooperate to

ensure that Statoil activities

are carried out with the fullest possible regard for the
environment in particular this

will include:

l Supporting a precautionary approach to environmental

challenges .

l Undertaking initiatives to promote greater environmental

responsibility .

l Encouraging the development and diffusion of

environmentally friendly technologies .

4 IMPLEMENTATION

4.1 Annual Meeting

Statoil and Industri Energi/IndustriALL will meet annually

to review practice in the

area of the agreed principles and follow up this Agreement.

The purpose shall be to

* Discrimination is defined as any distinction, exclusion,

or preference made on the basis of

race, colour, sex, religion, political opinion, national

extraction or social origin, which has the
effect of nulling or impairing equality of opportunity or
treatment.

discuss the issues covered by this agreement with a view to

jointly agreeing actions

that will further develop good working practices. In

addition to the general industrial

issues and HSE-matters, the following topics may be

addressed:

l General corporate policy on employment, occupational

health, safety and environmental issues affecting within
the company and, as appropriate, between the company and
its related companies including suppliers and
subcontractors.

l The economic and financial position of the company and

the development of its business and related activities.

l Training matters.

l Issues affecting the exercise of trade union rights.

l Any other issues mutually agreed upon.

Participants at these annual meetings will normally be 4-5

senior officials from

Industri Energi/IndustriALL and relevant managers from

Statoil.

4.2 Local Industrial Relations practice

The agreement between the Parties shall be applied

consistently throughout Statoil

operations but is not intended to replace or interfere with

local industrial relations

practice related to information, problem solving and

negotiations. The Parties to the

agreement respect the principle that industrial relations

issues are best resolved as

close as possible to the place of work.

4.3 Training Programmes

Industri Energi/IndustriALL and Statoil will cooperate in
developing joint training

arrangements covering those issues – and their

implementation – dealt with in this

agreement. This will include appropriate training in

health, safety and environmental

best practice for union delegates from countries where

Statoil is the operator. It will

also include Management training programmes within Statoil.

The cost of Industri

Energi/IndustriALL involvement in Statoil training

programmes may be covered by

Statoil, subject to agreement.

4.4 Union delegates

Statoil will refrain from dismissing or otherwise

discriminating against union dele

gates, identified as such by the Parties, or employees

providing information relevant

to the observance and implementation of this Agreement. All

union delegates must

agree to respect the commercial confidentiality of

information disclosed in the exer

cise of their duties.

Statoil will assist union delegates in the performance of

their functions by making

available relevant information and other agreed facilities.

When it is necessary to take

time off from work to perform these functions this will be

agreed upon locally and

may be given as paid time off within the framework of local

agreements.

Statoil may also facilitate the opportunity for union

representatives from Statoil oper

ations to meet as necessary to discuss the application and

future development of this

agreement.

4.5 Information

Industri Energi/lndustriALL will distribute copies of this

agreement to all its member

unions that organise employees in Statoil companies around

the world and will

broadly publicise the existence of the agreement and

explain its implications to its

unions in the Company.

Statoil will in the same manner distribute copies of this

agreement to all Statoil

offices and will inform local management of the existence

and contents of this Agree

ment.

Any external information about this agreement shall be

mutually agreed by the Par

ties.

4.6 Administration

The President of Industri Energi on behalf of lndustriALL

or person authorised by him

and the Vice President Employee Relations in Statoil are

responsible for the adminis

tration of this agreement.

4.7 Infringements of the agreement

The Parties agree that neither the Parties nor third

parties may derive or enforce any

legal rights from this agreement.

5 DURATION AND EVALUATION

The duration of this agreement is two years, until 11th

December 2014, after which this

agreement will be evaluated and may be prolonged for a new

period. Genève, Dec 11th 2012 Leif Sande Siv Oftedal Jyrki
Raina Industri Energi Statoil lndustriALL Global Union
22 Sectoral agreements

ASI (Anti-Slavery International) (2001) ‘Trafficked

Children were on Benin “Slave Ship” ’, 1 May 2001,
www.antislavery.org, accessed 2003.

Candy USA (2001) ‘Global Chocolate Industry Plan to Combat

Abusive Child Labour’, 1 October 2001, www.candyusa.org,
accessed 2003.

Ethical Corporation Institute (2009) The Guide to Industry

Initiatives in CSR, www.

Leipziger, D. (2003) Sustainable Futures (London: Morley

Fund Management, Winter 2003).

Raghavan, S., and S. Chatterjee (2001) ‘A Slave Labour

Force of Youths’, Philadelphia Inquirer, June 2001.

World Cocoa Foundation (2008a) ‘Ghana Certification. Report

Highlights Important Issues; Will Guide Future Efforts.
Based on Survey Covering 60% of Ghana’s Cocoa Production’;

—— (2008b) ‘Côte d'Ivoire Certification. Results Will Help

Children, Adults, Farming Communities. Survey Covers More
than 50% of Country’s Cocoa Production’; www.

Additional resources

Websites

Forest Stewardship Council: www.fsc.org

Marine Stewardship Council: www.msc.org

Responsible Care®:
www.icca-chem.org/en/Home/ICCA-initiatives/Responsible-care

10 www.fsc.org/pc.html

Responsible Care ® Global Charter

of the International Council of Chemical Associations *

Responsible Care is the global chemical industry's unifying

commitment to the safe

management of chemicals throughout their life cycle, while

promoting their role in
improving quality of life and contributing to sustainable
development.

As a signatory to the Responsible Care Global Charter my

company will actively

strengthen the Responsible Care initiative worldwide and is

committed to:

l A Corporate Leadership Culture that proactively supports

safe chemicals management through the global Responsible
Care initiative

l Safeguarding People and the Environment by continuously

improving our environmental, health and safety performance;
the security of our facilities, processes and technologies;
and by driving continuous improvement in chemical product
safety and stewardship throughout the supply chain

l Strengthening Chemicals Management Systems by

participating in the development and implementation of
lifecycle-oriented, sound-science and risk-based chemical
safety legislation and best practices

l Influencing Business Partners to promote the safe

management of chemicals within their own operations

l Engaging Stakeholders, understanding and responding to

their concerns and expectations for safer operations and
products and communicating openly on our performance and
products

l Contributing to Sustainability through improved

performance, expanded economic opportunities and the
development of innovative technologies and other solutions
to societal challenges

* Copyright © ICCA
27 AccountAbility 1000 Assurance Standard

AccountAbility (2002) ‘Closing the Assurance Gap: The

AA1000 Series Quality Assurance Framework’ (London:
AccountAbility, April 2002).

—— (2008) AA1000 Assurance Standard (London:

AccountAbility; www.accountability.org/
standards/aa1000as/index.html.

Economist (2003) ‘Europe’s Enron: Ahold’s Shocking

Accounting’, The Economist, 1 March 2003.

Fox, L. (2002) Enron: The Rise and Fall (New York; John
Wiley).

Sullivan, R. (2002) ‘One Step Forward or Two Steps Back for

Effective Self-regulation?’, Journal of Corporate
Citizenship 8 (Winter 2002): 91-104.

Additional resource

Website

AccountAbility: www.accountability.org

AA1000 Assurance Standard *

1. PURPOSE OF THE AA1000AS (2008)

The AA1000AS (2008) is an internationally accepted, freely

available standard that pro

vides the requirements for conducting sustainability

assurance.

Sustainability assurance in accordance with the AA1000AS

(2008) evaluates and pro

vides conclusions on:

l the nature and extent of adherence to the AA1000

AccountAbility Principles, and where applicable

l the quality of publicly disclosed information on

sustainability performance.

This standard is primarily intended for use by

sustainability assurance practitioners
and providers. This standard may also be useful to report
preparers seeking

assurance in accordance with this standard, as well as to

users of sustainability

assurance reports and statements and other standards

developers.

Note: The AA1000 AccountAbility Principles are presented in

the AA1000 AccountAbility

Principles Standard.

2. USING THE AA1000AS (2008)

2.1. Types of AA1000AS (2008) engagement

There are two types of AA1000AS (2008) sustainability

assurance engagement:

Type 1 – AccountAbility Principles

The assurance provider shall evaluate the nature and extent

of the organisation’s

adherence to all three AA1000 AccountAbility Principles.

Assurance on the AA1000 AccountAbility Principles is

intended to give stakeholders

assurance on the way an organisation manages sustainability

performance, and how

it communicates this in its sustainability reporting,

without verifying the reliability of

the reported information.

* Selected text. Reproduced with the permission of

AccountAbility. © AccountAbility 2008.

The assurance provider evaluates publicly disclosed

information, the systems and

processes the organisation has in place to ensure adherence

to the principles and the

performance information that demonstrates adherence. For

Type 1 assurance, the
evaluation of performance information does not require the
assurance provider to

provide conclusions on the reliability of the performance

information. Rather, it uses

information on performance as a source of evidence when

evaluating adherence to the

principles. An assurance provider is not restricted in the

types of information it seeks

as evidence.

The evaluation does not need to be based on explicit

management assertions about

adherence to the Principles, although an assertion based

approach to assurance

accords with the AA1000AS (2008).

For assurance on adherence to the AA1000 AccountAbility

Principles an assurance

provider provides findings and conclusions relating to the

nature and extent of an

organisation’s adherence to the Principles.

Type 2 – AccountAbility Principles and Performance

Information

The assurance provider shall evaluate the nature and extent

of the organisation’s

adherence to the AA1000 AccountAbility Principles, as for

Type 1.

When conducting a Type 2 engagement, the assurance provider

shall also evaluate the

reliability of specified sustainability performance

information. Specified sustainability

performance information is the information the assurance

provider and the reporting

organisation agree to include in the scope of the assurance

engagement. Specified

information is selected based on the materiality

determination and needs to be

meaningful to the intended users of the assurance

statement. An assurance engage

ment that only includes an evaluation of the reliability of

specified publicly disclosed

sustainability performance information is not in accordance

with the AA1000AS (2008).

The evaluation of the reliability of specified

sustainability performance information is

based on explicit management assertions about

sustainability performance and in

cludes a review of their completeness and accuracy.

For assurance on specified sustainability performance

information an assurance pro

vider provides findings and conclusions relating to the

reliability of the sustainability

performance information.

If an organisation provides in its report an assertion

concerning compliance with a

specified reporting framework, and compliance with this

reporting framework is

included with the scope of the specified sustainability

performance information to be

assured, the assurance provider provides findings and

conclusions on compliance

with the reporting framework.

2.2. Levels of AA1000AS (2008) assurance

An assurance engagement may be carried out to provide a

high level of assurance or

a moderate level of assurance. Since different subject

matter may be addressed in one

assurance engagement, a high level of assurance may be

provided for some subject

matter while a moderate level of assurance may be provided

for other subject matter

in the same assurance statement.

The following table outlines the characteristics of high

and moderate assurance and

the related assurance procedures. The assurance provider

achieves high assurance where sufficient evidence has been
obtained to support their statement such that the risk of
their conclusion being in error is very low but not zero.
High assurance will provide users with a high level of
confidence in an organisation’s disclosures on the subject
matter it refers to. The assurance provider achieves
moderate assurance where sufficient evidence has been
obtained to support their statement such that the risk of
their conclusion being in error is reduced but not reduced
to very low but not zero. Moderate assurance will enhance
the user’s confidence in an organisation’s disclosures on
the subject matter it refers to. Characteristics of High
and Moderate assurance

Objective Unrestricted For the principles Evidence from

internal and external sources and parties including
stakeholders; evidence gathering at all levels of the
organisation. For the specified performance information
Extensive depth of evidence gathering including
corroborative evidence and sufficient sampling at lower
levels in the organisation. Emphasis is on the reliability
of the information. Less extensive For the principles
Evidence from internal sources and parties; evidence
gathering generally restricted to corporate/management
levels in the organisation. For the specified performance
information Limited depth of evidence gathering including
inquiry and analytical procedures and limited sampling at
lower levels in the organisation as necessary. Emphasis is
on the plausibility of the information.

Evidence

characteristics For principles Conclusion on the nature and

extent of adherence relating to disclosures by the
organisation. For the specified performance information
Conclusion on reliability. For principles Conclusion, based
on work undertaken, on the nature and extent of adherence
relating to disclosures by the organisation. For the
specified performance information Conclusion on reliability
based on procedures undertaken.

Statement High assurance Moderate assurance

Only assurance engagements that meet the requirements of

this standard shall state

that assurance has been provided in accordance with the

AA1000AS (2008).

2.4. Relationship to other standards and guidance

The AA1000APS (2008) provides the criteria for evaluating

adherence to the Account

Ability Principles.

Conventions, legal requirements, standards, guidelines and

other frameworks may

provide criteria to be used to evaluate sustainability

performance information. These

may be designed for specific performance issues, systems,

processes, physical

characteristics or behaviours. These may be subject matter

or systems specific and

may have associated verification or certification programs.

In such cases it may be

acceptable to use these verifications and certifications as

evidence.

The AA1000AS (2008) is supported by a Guidance Note,

Guidance for the use of

AA1000AS (2008) which is intended to be used by assurance

practitioners, reporting

organisations seeking assurance and stakeholders using

assurance statements.

3. ACCEPTING AN AA1000AS (2008) ENGAGEMENT

3.1. Scope of the engagement

The assurance provider shall agree the scope of the
engagement with the reporting

organisation based on the requirements in clause 2.1. The

agreement shall be in

writing.

When accepting a Type 2 engagement the assurance provider

shall take into consid

eration the material issues so that the specified

performance information covered by

the assurance engagement is meaningful to the intended user

of the assurance

statement.

Before accepting an engagement the assurance provider shall

be satisfied that the

requirements of the AA1000AS (2008) can be met and that the

reporting organisation

is acting in good faith. In particular, the assurance

provider shall be satisfied that the

engagement subject matter is appropriate, and the

practitioner will have access to

sufficient evidence to support findings and conclusions.

3.1.1. Disclosures covered

The assurance provider shall identify and agree with the

reporting organisation on all

disclosures (e.g. reports and other forms of communication)

to be covered by the

assurance engagement.

3.1.2. Suitable criteria

The assurance provider shall use the criteria in AA1000APS

(2008) to evaluate

adherence to the AccountAbility Principles.

The assurance provider shall not accept a Type 2 engagement
unless there are suit

able criteria for evaluating specified performance

information.

Suitable criteria are those that are relevant, complete,

reliable, neutral and under

standable. All criteria shall be publicly available.

Criteria can be either established or specifically

developed. Established criteria may

be found in regulatory requirements, as well as other

standards, guidelines or

frameworks and have been developed by an independent peer

reviewed or multi

stakeholder processes. The preference is to use established

criteria.

3.1.3. Level of assurance

The assurance provider shall agree the level of assurance

to be provided with the

reporting organisation. This may be a combination of

levels, for example high or

moderate in relation to the principles (Type 1 and Type 2)

and high or moderate, or a

combination, for a Type 2 engagement on specified

performance information. The

levels shall be documented in the assurance agreement.

The assurance provider shall be sufficiently confident that

the agreed level is

achievable (e.g. that systems, processes and evidence

exist) before the engagement

begins. The engagement shall be planned and conducted to

obtain sufficient evidence

to achieve the agreed level.

The assurance provider shall not agree to a change to a
lower level of assurance

during an engagement without good reason. This change shall

be explained in the

assurance statement.

The assurance statement shall reflect the agreed level of

assurance for the

engagement. If, for any reason, this is not achieved during

the engagement, the

reasons shall be explained in the assurance statement.

3.2. Independence and impartiality

An assurance provider shall not accept an engagement if it

will be unduly limited by

its relationship with the organisation or its stakeholders

in reaching and publishing

an independent and impartial assurance statement.

The assurance provider shall make a public statement of

independence and impar

tiality that includes disclosure of:

l any relationships (including financial, commercial,

preparation of the report, governance and ownership
positions) that could be perceived to affect the assurance
providers ability to provide an independent and impartial
statement, and

l any mechanisms or professional codes of practice designed

to ensure independence to which the assurance provider or
assurance practitioner are bound.

3.3. Competence

An assurance provider shall not accept an engagement if it

does not possess the

necessary competencies.

Assurance providers shall ensure that the individual

assurance practitioners and

organisations, including external experts, involved in an

assurance engagement are

demonstrably competent.

The assurance provider shall be prepared, given the absence

of any undue risk and

upon request by a reporting organisation, to make

information available to interested

stakeholders about the competencies of the assurance

practitioners involved in its

assurance engagement.

3.3.1. Assurance practitioner competence

The assurance provider shall ensure that the individual

assurance practitioners, as

well as the external experts, involved in the assurance

engagement are, as a team,

demonstrably competent in the following areas as a minimum:

l the AccountAbility Principles;

l application of reporting and assurance practices and

standards;

l sustainability subject matter (including the specific

subject matter of the engagement), and

l stakeholder engagement.

3.3.2. Assurance provider competence

The organisational assurance provider shall be able to

demonstrate adequate institu

tional competencies.

Competencies shall include:

l assurance oversight mechanism to ensure quality of

provision;
l understanding of the legal aspects of the assurance
process, and

l infrastructure and systems to ensure quality delivery of

assurance.

3.4. Due care

Assurance providers and individual assurance practitioners

shall exercise due care at

all times in accordance with the needs of the users of

their assurance statement, the

importance of the task and the competencies required.

3.5. Engagement Agreement (contract)

The terms and conditions of the engagement shall be agreed

in writing.

The use of existing organisational procurement practices

and agreements shall be

acceptable if at a minimum an agreement covers:

l responsibilities of the reporting organisation and

assurance provider;

l subject matter;

l scope (including Type and Level), and

l the intention to provide assurance in accordance with the

AA1000AS (2008).

4. CONDUCTING AN AA1000AS (2008) ENGAGEMENT

4.1. Planning the engagement

The assurance provider shall plan the assurance engagement

so that it will be

performed effectively. Planning involves developing a clear

strategy for evidence

gathering and evaluation for the agreed scope.

Adequate planning ensures a sufficiently comprehensive,

robust and balanced assur
ance process. Planning is an iterative process and will
occur throughout the engage

ment as an assurance provider may have to revise its plan

due to evidence obtained.

The nature and extent of the planning process will vary

depending on the size and

complexity of the engagement. In planning an assurance

provider shall consider:

l the tasks and activities to be performed;

l the evidence gathering requirements, sampling methods and

associated risks;

l the resources requirements, and

l the schedule for the engagement.

The assurance provider shall document this in an engagement

plan that includes as

a minimum:

l objectives of the engagement;

l assurance standard/s to be used;

l roles and relationships;

l scope of the engagement;

l criteria to be used;

l level of assurance;

l assurance strategy, including: – risk assessment, and –

evidence requirements;

l tasks and activities, including: – gathering methods; –

resources requirements, and – schedule.

4.2. Performing the engagement

The assurance provider shall perform the engagement with an

attitude of professional
scepticism. This means assessing and questioning the
validity of evidence obtained

and the implications of this evidence.

4.2.1. Evaluation of adherence to the AA1000 AccountAbility

Principles

During the assurance engagement the assurance provider

shall evaluate and report

findings and conclusions on the nature and extent of an

organisation’s adherence to

the AA1000 AccountAbility Principles (Inclusivity,

Materiality and Responsiveness).

The assurance provider shall use the criteria in the

AA1000APS (2008).

Minimum evidence gathering for evaluating adherence to the

AA1000 AccountAbility

Principles at a moderate level of assurance shall include:

l understanding and testing on a sample basis the processes

used to adhere to and evaluate adherence to the
AccountAbility Principles;

l inquiring of management, including senior management at

executive and functional levels, and of relevant management
responsible for the day to day management of
sustainability, about the effectiveness of processes used
to adhere to the AA1000 AccountAbility Principles;

l observing and inspecting management practices, process

testing and evidence gathering across the organisation on a
sample basis, and

l collecting and evaluating documentary evidence and

management representations that support adherence to the
principles.

For a high level of assurance the assurance provider shall

also seek more extensive

evidence in all areas as well as corroborative evidence

where available, including

through direct engagement with stakeholders.

For a high level of assurance the assurance provider shall
obtain sufficient evidence

such that the risk of their conclusion being in error is

very low but not zero.

Further guidance can be found in the Guidance Note,

Guidance for the use of AA1000AS

(2008) .

4.2.2. Evaluation of specified sustainability performance

information

If included in the scope of the assurance engagement, the

assurance provider shall

evaluate and report findings and conclusions on the

reliability of specified sustain

ability performance information.

The assurance provider shall evaluate the systems,

processes, information and data

used to support sustainability performance disclosures on

the issues agreed for

inclusion in the scope of the assurance engagement. The

scope of the evaluation of

sustainability performance information shall state the

performance information to be

concluded upon, which may include compliance with a

reporting framework if speci

fied.

The assurance provider shall evaluate the quality of the

public disclosures and the

underlying systems, processes, information and data.

Minimum evidence gathering for evaluating the reliability

of specified performance

information at a moderate level of assurance shall include:

l understanding the management of specified performance
information and information collection processes;

l reviewing the design of systems and processes for

managing specified information;

l inquiring on a sample basis of individuals with overall

responsibility for information measurement and collection
(from source to aggregation) and reporting about the
information collection processes;

l carrying out analytical procedures (e.g. trend analysis);

l observing and inspecting on a sample basis management

practices, process testing and evidence gathering (from
source to aggregation);

l limited testing of detail on a sample basis (e.g.

re-performance of calculations);

l collecting and evaluating documentary evidence and

management representations to support the assurance work
undertaken, and

l confirming that what is disclosed is consistent with the

findings of the assurance process.

For a high level of assurance the assurance provider shall

also seek more extensive

evidence in all relevant areas as well as corroborative

evidence where available.

For a high level of assurance the assurance provider shall

obtain sufficient evidence

such that the risk of their conclusion being in error is

very low but not zero.

Further guidance can be found in the Guidance Note,

Guidance for the use of AA1000AS

(2008) .

4.2.3. Limitations

Any limitations in the scope of the disclosures on

sustainability, the assurance

engagement or the evidence gathering shall be addressed in

the assurance statement

and reflected in the report to management if one is

prepared.

Where the scope of a disclosure is limited the assurance

provider shall indicate in its

statement this limitation and the need for communications

to address other sustain

ability issues and stakeholders.

The assurance provider shall determine if limitations

encountered during the engage

ment make it impossible to continue the engagement, and

shall take appropriate

action.

4.2.4. Documentation

The assurance provider shall document evidence, retaining

necessary copies of

relevant evidence. The assurance provider shall also

document the assurance plan,

material assessments and judgements made, and conclusions.

4.3. Reporting by the assurance provider

4.3.1. Assurance statement

The result of the assurance process is a set of findings,

conclusions and recommen

dations provided by the assurance provider in a publicly

issued assurance statement.

Any limitations to the scope of a disclosure or the

assurance engagement shall be

addressed in the assurance statement.

To claim accordance with the AA1000AS (2008) in the

assurance statement the

assurance provider shall meet all the requirements of this

standard, including the

requirements for the assurance statement.

An AA1000AS (2008) assurance statement may also include any

other legally required

statements that may apply as well as the requirements of

any standard used during

the engagement.

An assurance statement shall include the following

information as a minimum:

l intended users of the assurance statement;

l the responsibility of the reporting organisation and of

the assurance provider;

l assurance standard/s used, including reference to the

AA1000AS (2008);

l description of the scope, including the Type of assurance

provided;

l description of disclosures covered;

l description of methodology;

l any limitations;

l reference to criteria used;

l statement of level of assurance;

l findings and conclusions concerning adherence to the

AA1000 AccountAbility Principles of Inclusivity,
Materiality and Responsiveness (in all instances);

l findings and conclusions concerning the reliability of

specified performance information (for Type 2 assurance
only);

l observations and/or recommendations;

l notes on competencies and independence of the assurance

provider;

l name of the assurance provider, and

l date and place.

4.3.2. Report to Management

If agreed in the engagement agreement, the assurance

provider shall prepare a report

to management.

The report to management shall not communicate materially

different conclusions

than those found in the publicly available assurance

statement. Where relevant, the

report to management shall include any limitations in the

scope of the disclosures on

sustainability, the assurance engagement or the evidence

gathering.
28 The Global Reporting Initiative

Downing, P. (2003) ‘The GRI and Corporate Reporting’,

Ethical Corporation 13 (January 2003): 32-35.

GRI (Global Reporting Initiative) (1999) Sustainability

Reporting Guidelines (Boston, MA: GRI).

—— (2002a) Sustainability Reporting Guidelines (Boston, MA:

GRI).

—— (2002b) What Others Are Saying (Boston, MA: GRI).

—— (2011–2012) Annual Report (Boston, MA: GRI).

United Nations (2002) A Historic Collaborative Achievement:

Inauguration of the Global Reporting Initiative (New York:
United Nations, 4 April 2002).

Additional resource

Website

Global Reporting Initiative: www.globalreporting.org

10 Interview with Teo Lessidrenska, an associate at GRI, 18

January 2009.

G4 Sustainability Reporting Guidelines:

Reporting Principles and Standard Disclosures *

4. REPORTING PRINCIPLES

The Reporting Principles are fundamental to achieving

transparency in sustainability

reporting and therefore should be applied by all

organizations when preparing a sus

tainability report. The Implementation Manual outlines the

required process to be fol

lowed by an organization in making decisions consistent

with the Reporting Princi

ples.

The Principles are divided into two groups: Principles for

Defining Report Content and
Principles for Defining Report Quality.

The Principles for Defining Report Content describe the

process to be applied to iden

tify what content the report should cover by considering

the organization’s activities,

impacts, and the substantive expectations and interests of

its stakeholders.

The Principles for Defining Report Quality guide choices on

ensuring the quality of

information in the sustainability report, including its

proper presentation. The quality

of the information is important to enable stakeholders to

make sound and reasonable

assessments of performance, and take appropriate actions.

4.1 PRINCIPLES FOR DEFINING REPORT CONTENT

These Principles are designed to be used in combination to

define the report content.

The implementation of all these Principles together is

described under the Guidance

of G4-18 on pp. 31-40 of the Implementation Manual.

Stakeholder Inclusiveness

Principle: The organization should identify its

stakeholders, and explain how it has

responded to their reasonable expectations and interests.

* Please note that this is a selected extract from GRI G4

Guidelines. © Global Reporting

Initiative. www.globalreporting.org

Stakeholders can include those who are invested in the

organization as well as those

who have other relationships to the organization. The

reasonable expectations and
interests of stakeholders are a key reference point for
many decisions in the prepara

tion of the report.

Sustainability Context

Principle: The report should present the organization’s

performance in the wider

context of sustainability.

Information on performance should be placed in context. The

underlying question of

sustainability reporting is how an organization

contributes, or aims to contribute in

the future, to the improvement or deterioration of

economic, environmental and

social conditions, developments, and trends at the local,

regional or global level.

Reporting only on trends in individual performance (or the

efficiency of the organiza

tion) fails to respond to this underlying question. Reports

should therefore seek to

present performance in relation tobroader concepts of

sustainability. This involves

discussing the performance of the organization in the

context of the limits and

demands placed on environmental or social resources at the

sector, local, regional,

or global level.

Materiality

Principle: The report should cover Aspects that:

l Reflect the organization’s significant economic,

environmental and social impacts; or

l Substantively influence the assessments and decisions of

stakeholders

Organizations are faced with a wide range of topics on

which they could report. Rele

vant topics are those that may reasonably be considered

important for reflecting the

organization’s economic, environmental and social impacts,

or influencing the deci

sions of stakeholders, and, therefore, potentially merit

inclusion in the report.

Materiality is the threshold at which Aspects become

sufficiently important that they

should be reported.

Completeness

Principle: The report should include coverage of material

Aspects and their Bound

aries, sufficient to reflect significant economic,

environmental and social impacts,

and to enable stakeholders to assess the organization’s

performance in the reporting

period.

Completeness primarily encompasses the dimensions of scope,

boundary, and time.

The concept of completeness may also be used to refer to

practices in information

collection and whether the presentation of information is

reasonable and appropriate.

4.2 PRINCIPLES FOR DEFINING REPORT QUALITY

This group of Principles guides choices on ensuring the

quality of information in the

sustainability report, including its proper presentation.

Decisions related to the

process of preparing information in a report should be

consistent with these Princi

ples. All of these Principles are fundamental to achieving

transparency. The quality of

the information is important to enable stakeholders to make

sound and reasonable

assessments of performance, and take appropriate actions.

Balance

Principle: The report should reflect positive and negative

aspects of the organiza

tion’s performance to enable a reasoned assessment of

overall performance.

The overall presentation of the report’s content should

provide an unbiased picture of

the organization’s performance. The report should avoid

selections, omissions, or

presentation formats that are reasonably likely to unduly

or inappropriately influence

a decision or judgement by the report reader.

Comparability

Principle: The organization should select, compile and

report information consis

tently. The reported information should be presented in a

manner that enables stake

holders to analyze changes in the organization’s

performance over time, and that

could support analysis relative to other organizations.

Comparability is necessary for evaluating performance.

Stakeholders using the report

should be able to compare information reported on economic,

environmental and

social performance against the organization’s past

performance, its objectives, and,
to the degree possible, against the performance of other
organizations.

Accuracy

Principle: The reported information should be sufficiently

accurate and detailed for

stakeholders to assess the organization’s performance.

Responses to economic, environmental and social DMA and

Indicators can be ex

pressed in many different ways, ranging from qualitative

responses to detailed quan

titative measurements. The characteristics that determine

accuracy vary according to

the nature of the information and the user of the

information.

Timeliness

Principle: The organization should report on a regular

schedule so that information

is available in time for stakeholders to make informed

decisions.

The usefulness of information is closely tied to whether

the timing of its disclosure to

stakeholders enables them to effectively integrate it into

their decision-making. The

timing of release refers both to the regularity of

reporting as well as its proximity to

the actual events described in the report.

Clarity

Principle: The organization should make information

available in a manner that is

understandable and accessible to stakeholders using the

report.
Information should be presented in a manner that is
comprehensible to stakeholders

who have a reasonable understanding of the organization and

its activities.

Reliability

Principle: The organization should gather, record, compile,

analyze and disclose

information and processes used in the preparation of a

report in a way that they can

be subject to examination and that establishes the quality

and materiality of the infor

mation.

Stakeholders should have confidence that a report can be

checked to establish the

veracity of its contents and the extent to which it has

appropriately applied Reporting

Principles.

5.1 GENERAL STANDARD DISCLOSURES

The General Standard Disclosures are applicable to all

organizations preparing sus

tainability reports. Depending on the organization’s choice

of ‘in accordance’ option

(pp. 11-14), the organization has to identify the required

General Standard Disclosures

to be reported.

The General Standard Disclosures are divided into seven

parts: Strategy and Analysis,

Organizational Profile, Identified Material Aspects and

Boundaries, Stakeholder

Engagement, Report Profile, Governance, and Ethics and

Integrity.

Strategy and Analysis

These Standard Disclosures provide a general strategic view
of the organization’s

sustainability, in order to provide context for subsequent,

more detailed reporting

against other sections of the Guidelines. The Strategy and

Analysis may draw on

information provided in other parts of the report, but is

intended to give insight on

strategic topics rather than simply summarize the contents

of the report.

G4-1

a. Provide a statement from the most senior decision-maker

of the organization (such

as CEO, chair, or equivalent senior position) about the

relevance of sustainability to

the organization and the organization’s strategy for

addressing sustainability.

The statement should present the overall vision and

strategy for the short term,

medium term, and long term, particularly with regard to

managing the significant

economic, environmental and social impacts that the

organization causes and con

tributes to, or the impacts that can be linked to its

activities as a result of relation

ships with others (such as suppliers, people or

organizations in local communities).

The statement should include:

l Strategic priorities and key topics for the short and

medium term with regard to

sustainability, including respect for internationally

recognized standards and how
such standards relate to long term organizational strategy
and success

l Broader trends (such as macroeconomic or political)

affecting the organization

and influencing sustainability priorities

l Key events, achievements, and failures during the

reporting period

l Views on performance with respect to targets

l Outlook on the organization’s main challenges and targets

for the next year and

goals for the coming 3–5 years

l Other items pertaining to the organization’s strategic

approach

G4-2

a. Provide a description of key impacts, risks, and

opportunities.

The organization should provide two concise narrative

sections on key impacts, risks,

and opportunities.

Section One should focus on the organization’s key impacts

on sustainability and

effects on stakeholders, including rights as defined by

national laws and relevant

internationally recognized standards. This should take into

account the range of rea

sonable expectations and interests of the organization’s

stakeholders. This section

should include:

l A description of the significant economic, environmental

and social impacts of the

organization, and associated challenges and opportunities.

This includes the
effect on stakeholders’ rights as defined by national laws
and the expectations in

internationally recognized standards and norms

l An explanation of the approach to prioritizing these

challenges and opportunities

l Key conclusions about progress in addressing these topics

and related

performance in the reporting period. This includes an

assessment of reasons for

underperformance or over-performance

l A description of the main processes in place to address

performance and relevant

changes

Section Two should focus on the impact of sustainability

trends, risks, and opportuni

ties on the long- term prospects and financial performance

of the organization. This

should concentrate specifically on information relevant to

financial stakeholders or

that could become so in the future. Section Two should

include the following:

l A description of the most important risks and

opportunities for the organization

arising from sustainability trends

l Prioritization of key sustainability topics as risks and

opportunities according to their relevance for long- term
organizational strategy, competitive position, qualitative,
and (if possible) quantitative financial value drivers

l Table(s) summarizing: – Targets, performance against

targets, and lessons learned for the current reporting
period – Targets for the next reporting period and medium
term objectives and goals (that is, 3–5 years) related to
key risks and opportunities
l Concise description of governance mechanisms in place
specifically to manage these risks and opportunities, and
identification of other related risks and opportunities

Organizational Profile

These Standard Disclosures provide an overview of

organizational characteristics, in

order to provide context for subsequent more detailed

reporting against other sec

tions of the Guidelines.

G4-3

a. Report the name of the organization.

G4-4

a. Report the primary brands, products, and services.

G4-5

a. Report the location of the organization’s headquarters.

G4-6

a. Report the number of countries where the organization

operates, and names of countries where either the
organization has significant operations or that are
specifically relevant to the sustainability topics covered
in the report.

G4-7

a. Report the nature of ownership and legal form.

G4-8

a. Report the markets served (including geographic

breakdown, sectors served, and types of customers and
beneficiaries).

G4-9

a. Report the scale of the organization, including:

l Total number of employees

l Total number of operations

l Net sales (for private sector organizations) or net

revenues (for public sector

organizations)

l Total capitalization broken down in terms of debt and

equity (for private sector

organizations)

l Quantity of products or services provided

G4-10

a. Report the total number of employees by employment

contract and gender.

b. Report the total number of permanent employees by

employment type and gen

der.

c. Report the total workforce by employees and supervised

workers and by gender.

d. Report the total workforce by region and gender.

e. Report whether a substantial portion of the

organization’s work is performed by

workers who are legally recognized as self-employed, or by

individuals other than

employees or supervised workers, including employees and

supervised employ

ees of contractors.

f. Report any significant variations in employment numbers

(such as seasonal vari

ations in employment in the tourism or agricultural

industries).

G4-11

a. Report the percentage of total employees covered by

collective bargaining agree
ments.

G4-12

a. Describe the organization’s supply chain.

G4-13

a. Report any significant changes during the reporting

period regarding the organi

zation’s size, structure, ownership, or its supply chain,

including:

l Changes in the location of, or changes in, operations,

including facility openings,

closings, and expansions

l Changes in the share capital structure and other capital

formation, maintenance,

and alteration operations (for private sector organizations)

l Changes in the location of suppliers, the structure of

the supply chain, or in relationships with suppliers,
including selection and termination

COMMITMENTS TO EXTERNAL INITIATIVES

G4-14

a. Report whether and how the precautionary approach or

principle is addressed by the organization.

G4-15

a. List externally developed economic, environmental and

social charters, principles, or other initiatives to which
the organization subscribes or which it endorses.

G4-16

a. List memberships of associations (such as industry

associations) and national or international advocacy
organizations in which the organization:

l Holds a position on the governance body

l Participates in projects or committees

l Provides substantive funding beyond routine membership

dues

l Views membership as strategic

This refers primarily to memberships maintained at the

organizational level.

Identified Material Aspects and Boundaries

These Standard Disclosures provide an overview of the

process that the organization

has followed to define the Report Content, the identified

material Aspects and their

Boundaries, and restatements.

G4-17

a. List all entities included in the organization’s

consolidated financial statements or equivalent documents.

b. Report whether any entity included in the organization’s

consolidated financial statements or equivalent documents
is not covered by the report.

The organization can report on this Standard Disclosure by

referencing the informa

tion in publicly available consolidated financial

statements or equivalent documents.

G4-18

a. Explain the process for defining the report content and

the Aspect Boundaries.

b. Explain how the organization has implemented the

Reporting Principles for

Defining Report Content.

G4-19

a. List all the material Aspects identified in the process

for defining report content.
G4-20

For each material Aspect, report the Aspect Boundary within

the organization, as fol

lows:

l Report whether the Aspect is material within the

organization

l If the Aspect is not material for all entities within the

organization (as described

in G4-17), select one of the following two approaches and

report either: – The list of entities or groups of entities
included in G4-17 for which the Aspect is not material or –
The list of entities or groups of entities included in
G4-17 for which the Aspects is material

l Report any specific limitation regarding the Aspect

Boundary within the organi

zation

G4-21

a. For each material Aspect, report the Aspect Boundary

outside the organization,

as follows:

l Report whether the Aspect is material outside of the

organization

l If the Aspect is material outside of the organization,

identify the entities, groups

of entities or elements for which the Aspect is material.

In addition, describe the

geographical location where the Aspect is material for the

entities identified

l Report any specific limitation regarding the Aspect

Boundary outside the organi

zation

G4-22
a. Report the effect of any restatements of information
provided in previous reports,

and the reasons for such restatements.

G4-23

a. Report significant changes from previous reporting

periods in the Scope and Aspect Boundaries.

Stakeholder Engagement

These Standard Disclosures provide an overview of the

organization’s stakeholder

engagement during the reporting period. These Standard

Disclosures do not have to

be limited to engagement that was conducted for the

purposes of preparing the

report.

G4-24

a. Provide a list of stakeholder groups engaged by the

organization.

G4-24

a. Report the basis for identification and selection of

stakeholders with whom to engage.

G4-26

a. Report the organization’s approach to stakeholder

engagement, including frequency of engagement by type and
by stakeholder group, and an indication of whether any of
the engagement was undertaken specifically as part of the
report preparation process.

G4-27

a. Report key topics and concerns that have been raised

through stakeholder engagement, and how the organization
has responded to those key topics and concerns, including
through its reporting. Report the stakeholder groups that
raised each of the key topics and concerns.

Report Profile
These Standard Disclosures provide an overview of the basic
information about the

report, the GRI Content Index, and the approach to seeking

external assurance.

G4-28

a. Reporting period (such as fiscal or calendar year) for

information provided.

G4-29

a. Date of most recent previous report (if any).

G4-30

a. Reporting cycle (such as annual, biennial).

G4-31

a. Provide the contact point for questions regarding the

report or its contents.

GRI CONTENT INDEX

G4-32

a. Report the ‘in accordance’ option the organization has

chosen.

b. Report the GRI Content Index for the chosen option (see
tables below).

c. Report the reference to the External Assurance Report,

if the report has been

externally assured. GRI recommends the use of external

assurance but it is not a

requirement to be ‘in accordance’ with the Guidelines.

ASSURANCE

G4-33

a. Report the organization’s policy and current practice

with regard to seeking
external assurance for the report.

b. If not included in the assurance report accompanying the

sustainability report,

report the scope and basis of any external assurance

provided.

c. Report the relationship between the organization and the

assurance providers.

d. Report whether the highest governance body or senior

executives are involved in

seeking assurance for the organization’s sustainability

report.

Governance

These Standard Disclosures provide an overview of:

l The governance structure and its composition

l The role of the highest governance body in setting the

organization’s purpose,

values, and strategy

l The competencies and performance evaluation of the

highest governance body

l The role of the highest governance body in risk management

l The role of the highest governance body in sustainability

reporting

l The role of the highest governance body in evaluating

economic, environmental and social performance

l Remuneration and incentives

GOVERNANCE STRUCTURE AND COMPOSITION

Transparency on the governance structure and composition of

the organization is

important to ensure the accountability of the relevant

bodies and individuals. These

Standard Disclosures describe how the highest governance

body is established and

structured in support of the organization’s purpose, and

how this purpose relates to

economic, environmental and social dimensions.

G4-34

a. Report the governance structure of the organization,

including committees of the highest governance body.
Identify any committees responsible for decision-making on
economic, environmental and social impacts.

G4-35

a. Report the process for delegating authority for

economic, environmental and social topics from the highest
governance body to senior executives and other employees.

G4-36

a. Report whether the organization has appointed an

executive-level position or positions with responsibility
for economic, environmental and social topics, and whether
post holders report directly to the highest governance
body.

G4-37

a. Report processes for consultation between stakeholders

and the highest governance body on economic, environmental
and social topics. If consultation is delegated, describe
to whom and any feedback processes to the highest
governance body.

G4-38

a. Report the composition of the highest governance body

and its committees by:

l Executive or non-executive

l Independence

l Tenure on the governance body

l Number of each individual’s other significant positions

and commitments, and the
nature of the commitments

l Gender

l Membership of under-represented social groups

l Competences relating to economic, environmental and

social impacts

l Stakeholder representation

G4-39

a. Report whether the Chair of the highest governance body

is also an executive offi

cer (and, if so, his or her function within the

organization’s management and the

reasons for this arrangement).

G4-40

Report the nomination and selection processes for the

highest governance body and

its committees, and the criteria used for nominating and

selecting highest gover

nance body members, including:

l Whether and how diversity is considered

l Whether and how independence is considered

l Whether and how expertise and experience relating to

economic, environmental

and social topics are considered

l Whether and how stakeholders (including shareholders) are

involved

G4-41

a. Report processes for the highest governance body to

ensure conflicts of interest

are avoided and managed. Report whether conflicts of

interest are disclosed to
stakeholders, including, as a minimum:

l Cross-board membership

l Cross-shareholding with suppliers and other stakeholders

l Existence of controlling shareholder

l Related party disclosures

HIGHEST GOVERNANCE BODY’S ROLE IN SETTING PURPOSE, VALUES,

AND STRATEGY

The highest governance body sets the tone for the

organization, and has a major role

in defining its purpose, values and strategy.

G4-42

a. Report the highest governance body’s and senior

executives’ roles in the development, approval, and
updating of the organization’s purpose, value or mission
statements, strategies, policies, and goals related to
economic, environmental and social impacts.

HIGHEST GOVERNANCE BODY’S COMPETENCIES AND PERFORMANCE

EVALUATION

These Standard Disclosures describe the highest governance

body’s and senior exec

utives’ willingness and capability to understand, discuss,

and effectively respond to

economic, environmental and social impacts; and show if a

process is in place, con

ducted internally or externally, to ensure the highest

governance body’s continuing

effectiveness.

G4-43

a. Report the measures taken to develop and enhance the

highest governance body’s collective knowledge of economic,
environmental and social topics.
G4-44

a. Report the processes for evaluation of the highest

governance body’s performance with respect to governance of
economic, environmental and social topics. Report whether
such evaluation is independent or not, and its frequency.
Report whether such evaluation is a self-assessment.

b. Report actions taken in response to evaluation of the

highest governance body’s performance with respect to
governance of economic, environmental and social topics,
including, as a minimum, changes in membership and
organizational practice.

HIGHEST GOVERNANCE BODY’S ROLE IN RISK MANAGEMENT

These Standard Disclosures describe whether the highest

governance body is

accountable for risk management process and its overall

effectiveness. The highest

governance body’s and senior executives’ consideration of

longer term and broader

reaching risk elements and their integration into strategic

planning are important

governance disclosures.

G4-45

a. Report the highest governance body’s role in the

identification and management of economic, environmental
and social impacts, risks, and opportunities. Include the
highest governance body’s role in the implementation of due
diligence processes.

b. Report whether stakeholder consultation is used to

support the highest governance body’s identification and
management of economic, environmental and social impacts,
risks, and opportunities.

G4-46

a. Report the highest governance body’s role in reviewing

the effectiveness of the

organization’s risk management processes for economic,

environmental and
social topics.

G4-47

a. Report the frequency of the highest governance body’s

review of economic, envi

ronmental and social impacts, risks, and opportunities.

HIGHEST GOVERNANCE BODY’S ROLE IN SUSTAINABILITY REPORTING

These Standard Disclosures show the extent of the highest

governance body’s in

volvement in developing and approving the organization’s

sustainability disclosures,

and the degree by which it may be aligned with processes

around financial reporting.

G4-48

a. Report the highest committee or position that formally

reviews and approves the

organization’s sustainability report and ensures that all

material Aspects are cov

ered.

HIGHEST GOVERNANCE BODY’S ROLE IN EVALUATING ECONOMIC,

ENVIRONMENTAL

AND SOCIAL PERFORMANCE

These Standard Disclosures show how the highest governance

body is involved in

monitoring and reacting to the organization’s performance

for economic, environ

mental and social topics. Economic, environmental and

social performance presents

major risks and opportunities that the highest governance

body ensures are moni

tored and addressed, where appropriate. These Standard

Disclosures also address
the organization’s processes for communicating critical
concerns to the highest gov

ernance body.

G4-49

a. Report the process for communicating critical concerns

to the highest gover

nance body.

G4-50

a. Report the nature and total number of critical concerns

that were communicated

to the highest governance body and the mechanism(s) used to

address and

resolve them.

REMUNERATION AND INCENTIVES

These Standard Disclosures focus on the remuneration

policies established to ensure

that remuneration arrangements support the strategic aims

of the organization, align

with the interests of stakeholders, and enable the

recruitment, motivation and reten

tion of members of the highest governance body, senior

executives, and employees.

G4-51

a. Report the remuneration policies for the highest

governance body and senior executives for the below types
of remuneration:

l Fixed pay and variable pay: – Performance-based pay –

Equity-based pay – Bonuses – Deferred or vested shares

l Sign-on bonuses or recruitment incentive payments

l Termination payments
l Clawbacks

l Retirement benefits, including the difference between

benefit schemes and contribution rates for the highest
governance body, senior executives, and all other employees

b. Report how performance criteria in the remuneration

policy relate to the highest governance body’s and senior
executives’ economic, environmental and social objectives.

G4-52

a. Report the process for determining remuneration. Report

whether remuneration consultants are involved in
determining remuneration and whether they are independent
of management. Report any other relationships which the
remuneration consultants have with the organization.

G4-53

a. Report how stakeholders’ views are sought and taken into

account regarding remuneration, including the results of
votes on remuneration policies and proposals, if
applicable.

G4-54

a. Report the ratio of the annual total compensation for

the organization’s highestpaid individual in each country
of significant operations to the median annual total
compensation for all employees (excluding the highest-paid
individual) in the same country.

G4-55

a. Report the ratio of percentage increase in annual total

compensation for the

organization’s highest-paid individual in each country of

significant operations to

the median percentage increase in annual total compensation

for all employees

(excluding the highest-paid individual) in the same country.

Ethics and Integrity

These Standard Disclosures provide an overview of:

l The organization’s values, principles, standards and norms

l Its internal and external mechanisms for seeking advice

on ethical and lawful

behavior

l Its internal and external mechanisms for reporting

concerns about unethical or

unlawful behavior and matters of integrity

G4-56

a. Describe the organization’s values, principles,

standards and norms of behavior

such as codes of conduct and codes of ethics.

G4-57

a. Report the internal and external mechanisms for seeking

advice on ethical and

lawful behavior, and matters related to organizational

integrity, such as helplines

or advice lines.

G4-58

a. Report the internal and external mechanisms for

reporting concerns about

unethical or unlawful behavior, and matters related to

organizational integrity,

such as escalation through line management, whistleblowing

mechanisms or

hotlines.
29 ISO 14001

Hillary, R. (2001) ‘Introduction’, in R. Hillary (ed.), ISO

14001: Case Studies and Practical Expe

riences (Sheffield, UK: Greenleaf Publishing): 9-16.

ISO (International Organization for Standardization) (1999)

The ISO 14001 Information Guide

(Geneva: ISO).

—— (2002) ‘ISO is no “Sleeping Beauty” says ISO Director of

Standards’, news item, June 2002,

www.iso.ch, accessed 2003.

—— (2003) ‘ISO weighs up work on social responsibility of

organizations’, press release 843,

12 February 2003.

—— (2008) ‘The ISO Survey—2008’;

www.iso.org/iso/survey2008.pdf, accessed 11 June

2010.

Lewis, M. (2013) ‘Companies Increasingly Go Green, but ISO

14001 Certification Lags in US,

IMT Industry Market Trends, ThomasNet News, 1 May 2013.

McIntosh, M., D. Leipziger and G. Coleman (2003) Living

Corporate Citizenship: Strategic

Routes to Socially Responsible Business (London: FT

Pearson).

Pedersen, C., and B. Nielsen (2000) ‘Maintaining the

Momentum: EMS after the Certifier has

Left’, in R. Hillary (ed.), ISO 14001: Case Studies and

Practical Experiences (Sheffield, UK:

Greenleaf Publishing): 31-38.

Additional resources

Website
International Organization for Standardization (ISO):
www.iso.org

ISO 14001:1996

Environmental Management Systems:

Specifications with Guidance for Use *

* Selected extracts only are reproduced here. Permission to

reproduce extracts from BS EN ISO 14001:2004 is granted by
BSI. British Standards can be obtained in PDF or hard copy
formats from the BSI online shop: www.bsigroup.com/Shop or
by contacting BSI Customer Services for hard copies only:
Tel: +44 (0)20 8996 9001, Email: cservices@ bsigroup.com.
Environmental Policy Planning Implementation and Operation
Checking and Corrective Action Management Review Continual
Improvement

Figure 1: Environmental management system model for this

International Standard

4 ENVIRONMENTAL MANAGEMENT SYSTEM REQUIREMENTS

4.1 General requirements

The organization shall establish and maintain an

environmental management system,

the requirements of which are described in the whole of

clause 4.

4.2 Environmental policy

Top management shall define the organization’s

environmental policy and ensure that it

a) is appropriate to the nature, scale and environmental

impacts of its activities, products or services;

b) includes a commitment to continual improvement and

prevention of pollution;

c) includes a commitment to comply with relevant

environmental legislation and regulations, and with other
requirements to which the organization subscribes;

d) provides the framework for setting and reviewing

environmental objectives and targets;
e) is documented, implemented and maintained and
communicated to all employees;

f) is available to the public.

4.3 Planning

4.3.1 Environmental aspects

The organization shall establish and maintain (a)

procedure(s) to identify the environ

mental aspects of its activities, products or services that

it can control and over which

it can be expected to have an influence, in order to

determine those which have or can

have significant impacts on the environment. The

organization shall ensure that the

aspects related to these significant impacts are considered

in setting its environ

mental objectives.

The organization shall keep this information up-to-date.

4.3.2 Legal and other requirements

The organization shall establish and maintain a procedure

to identify and have access

to legal and other requirements to which the organization

subscribes, that are applic

able to the environmental aspects of its activities,

products or services.

4.3.3 Objectives and targets

The organization shall establish and maintain documented

environmental objectives

and targets, at each relevant function and level within the

organization.

When establishing and reviewing its objectives, an

organization shall consider the
legal and other requirements, its significant environmental
aspects, its technological

options and its financial, operational and business

requirements, and the views of

interested parties.

The objectives and targets shall be consistent with the

environmental policy, including

the commitment to prevention of pollution.

4.3.4 Environmental management programme(s)

The organization shall establish and maintain (a)

programme(s) for achieving its

objectives and targets. It shall include

a) designation of responsibility for achieving objectives

and targets at each relevant function and level of the
organization;

b) the means and time-frame by which they are to be

achieved.

If a project relates to new developments and new or

modified activities, products or

services, programme(s) shall be amended where relevant to

ensure that environ

mental management applies to such projects.

4.4 Implementation and operation

4.4.1 Structure and responsibility

Roles, responsibility and authorities shall be defined,

documented and communicated

in order to facilitate effective environmental management.

Management shall provide resources essential to the

implementation and control of

the environmental management system. Resources include

human resources and
specialized skills, technology and financial resources.

The organization’s top management shall appoint (a)

specific management represen

tative(s) who, irrespective of other responsibilities,

shall have defined roles, responsi

bilities and authority for

a) ensuring that environmental management system

requirements are established, implemented and maintained in
accordance with this International Standard;

b) reporting on the performance of the environmental

management system to top management for review and as a
basis for improvement of the environmental management
system.

4.4.2 Training, awareness and competence

The organization shall identify training needs. It shall

require that all personnel whose

work may create a significant impact upon the environment,

have received appropriate

training.

It shall establish and maintain procedures to make its

employees or members at each

relevant function and level aware of

a) the importance of conformance with the environmental

policy and procedures and with the requirements of the
environmental management system;

b) the significant environmental impacts, actual or

potential, of their work activities and the environmental
benefits of improved personal performance;

c) their roles and responsibilities in achieving

conformance with the environmental policy and procedures
and with the requirements of the environmental management
system, including emergency preparedness and response
requirements;

d) the potential consequences of departure from specified

operating procedures.
Personnel performing the tasks which can cause significant
environmental impacts

shall be competent on the basis of appropriate education,

training and/or experience.

4.4.3 Communication

With regard to its environmental aspects and environmental

management system, the

organization shall establish and maintain procedures for

a) internal communication between the various levels and

functions of the organization;

b) receiving, documenting and responding to relevant

communication from external interested parties.

The organization shall consider processes for external

communication on its signifi

cant environmental aspects and record its decision.

4.4.4 Environmental management system documentation

The organization shall establish and maintain information,

in paper or electronic

form, to

a) describe the core elements of the management system and

their interaction;

b) provide direction to related documentation.

4.4.5 Document control

The organization shall establish and maintain procedures

for controlling all docu

ments required by this International Standard to ensure that

a) they can be located;

b) they are periodically reviewed, revised as necessary and

approved for adequacy by authorized personnel;

c) the current versions of relevant documents are available

at all locations where operations essential to the
effective functioning of the environmental management
system are performed;

d) obsolete documents are promptly removed from all points

of issue and points of use, or otherwise assured against
unintended use;

e) any obsolete documents retained for legal and/or

knowledge preservation purposes are suitably identified.

Documentation shall be legible, dated (with dates of

revision) and readily identifiable,

maintained in an orderly manner and retained for a

specified period. Procedures and

responsibilities shall be established and maintained

concerning the creation and

modification of the various types of document.

4.4.6 Operational control

The organization shall identify those operations and

activities that are associated with

the identified significant environmental aspects in line

with its policy, objectives and

targets. The organization shall plan these activities,

including maintenance, in order

to ensure that they are carried out under specified

conditions by

a) establishing and maintaining documented procedures to

cover situations where their absence could lead to
deviations from the environmental policy and the objectives
and targets;

b) stipulating operating criteria in the procedures;

c) establishing and maintaining procedures related to the

identifiable significant environmental aspects of goods and
services used by the organization and communicating
relevant procedures and requirements to suppliers and
contractors.

4.4.7 Emergency preparedness and response

The organization shall establish and maintain procedures to
identify potential for and

respond to accidents and emergency situations, and for

preventing and mitigating the

environmental impacts that may be associated with them.

The organization shall review and revise, where necessary,

its emergency prepared

ness and response procedures, in particular, after the

occurrence of accidents or

emergency situations.

The organization shall also periodically test such

procedures where practicable. Q ~Taylor & Francis Taylor
& Francis Group http://taylora n dfra ncis.com