The University of Geneva has set its sights on building the "capital of peace" into a hub for responsible business practice, funding the first centre dedicated to human rights at a business school in Europe. The centre’s director talks to swissinfo.ch about why she believes profits and principles can co-exist and what it is going to take to keep companies in check.
While Geneva is more known for peace talks and diplomatic negotiations than major business deals, it is no lightweight when it comes to industry. Canton Geneva is not only the birthplace of Swiss watchmaking but hosts hundreds of multinationals including major commodity traders like Trafigura and Vitol and consumer goods giants such as Procter & Gamble.
This mix makes Geneva the “obvious place for a centre on business and human rights,” explained Mike Posner from New York University on Monday during the launch of the centre. Posner first floated the idea of such an institution five years ago during a breakfast at the World Economic Forum (WEF) following the creation of a similar centre, the first of its kind, in New York.
While it may have taken five years to come to fruition, the centre's director, Dorothée Baumann-Pauly, prefers to look ahead. “Things may take a long time in Switzerland but when they happen, people are really committed,” she said on Monday.
The new centreexternal link aims to be a place for dialogue and research on how to apply global human rights principles into business practice with a focus on industries that matter to Switzerland. The centre already has two projects up and running; the first focused on benchmarks for the financial sector and the second on artisanal mining of cobalt, which is in increasing demand for batteries in the automotive industry.
swissinfo.ch spoke with Baumann-Pauly on her vision and her thoughts on some of the perplexing questions on responsible business.
swissinfo.ch: There are many skeptics of the idea that profits and principles can actually co-exist. What makes you so convinced?
Dorothée Baumann-Pauly: The so-called business case for human rights is not a given. What is needed is a long-term perspective. While ensuring respect for human rights takes investment initially, it makes companies more robust in the long-run.
As an example, I have seen how companies in the fashion industry are starting to move from a transactional business model to one that integrates human rights standards into their purchasing practices and focuses on long-term relationships with suppliers. This is good for garment workers and manufacturers, but it is also good for apparel brands because when workers are healthy, skilled and paid fairly it also improves productivity and quality.
swissinfo.ch: Commodity traders don’t have the best record when it comes to human rights. Do you think they are taking human rights concerns more seriously?
D.B-P.: I think the commodity trading industry has come a long way in terms of accepting human rights responsibilities. However, implementation still varies wildly across the sector. This is partly because it is still not clear what is expected from a commodity trading firm regarding human rights. Guidance was developed for the sector last year, but it left a lot of questions unanswered.
swissinfo.ch: One of the most controversial parts of the Responsible Business Initiative is the introduction of legal liability. Do you think companies should be held legally liable for actions by business partners abroad or are voluntary efforts enough?
D.B-P.: Legal liability is one way of holding corporations to account for their human rights conduct. But it is not the only way nor is it enough. Most importantly, we need clear and common industry standards that can be used to measure progress.
For corporations, legal liability certainly is a powerful stick, but it will also relegate human rights issues to corporate lawyers that are only focused on legal compliance.
It is also important for companies to see respect for human rights as a business opportunity and this requires buy-in at all levels in the company. Irrespective of legal liability, companies need to be able to implement their commitment to human rights.
swissinfo.ch: Some Swiss companies are operating in many countries where there is weak rule of law and human rights abuses are rife. What do you think companies should do in such situations?
D.B-P.: Given the state of the world we live in, weak rule of law and weak governance is the norm, not the exception. Companies that operate around the globe are most equipped to address these governance gaps with global standards rooted in universal human rights. This is an approach that is principled, consistent, and predictable for business partners.
swissinfo.ch: Some critics argue that working with or collaborating with companies won’t solve the problems and may only serve to boost their reputations. What is the role for collaboration versus activism?
D.B-P.: There has always been an interplay between collaboration and activism. Different actors play different roles. The Geneva centre plans to work with companies to better understand the most pertinent human rights issues and develop viable solutions. Our approach is grounded in rigorous research that can inform recommendations for companies and policymakers as well as business models that enable profits and principles to co-exist.
We also hope that our research will contribute to the development of common industry standards. Once this is developed, it won’t be enough to have a symbolic engagement on human rights to boost a corporation's image.