15
JUN
2015

UK NCP Final Statement on Complaint against G4S Relevant to all PSCs

 

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The recently released Final Statement from the OECD’s UK National Contact Point (NCP) on a complaint made by an NGO against a leading UK-based private security company’s (PSC) subsidiary operations in Israel warrants close attention by the wider PSC industry.

On June 9th, 2015 the UK NCP for the OECD Guidelines for Multinational Enterprises released its Final Statement on G4S’s business activities in Israel following a detailed review into a human rights complaint made by the Lawyers for Palestinian Human Rights (LPHR), a UK-based non-governmental organization focused on Palestinian human rights issues. G4S, a UK-headquartered company, is the world’s largest PSC and G4S Israel (Hashmira) is the largest private security provider in Israel.

The OECD’s UK NCP’s findings, conclusions, and recommendations presented in its Final Statement were drawn from its Initial Assessment and examination considering the human rights complaint that G4S had breached the OECD Guidelines for Multinational Enterprises. The OECD Guidelines are voluntary principles for responsible business conduct. Each government that adheres to the OECD Guidelines is required to designate a National Contact Point to handle enquiries and contribute to the resolution of issues that arise from the alleged non-observance of the Guidelines in specific instances. In addition to the United Kingdom, there are 44 other nations with specified NCP’s to include France, Germany, Israel, Norway, Sweden, and the United States.

In this particular case, the UK NCP concluded in its Final Statement that they did “not find any general failure by the company to respect the human rights of the people on whose behalf the complaint is made or any failure to respect human rights in regard to its own operations.”

However, the UK NCP also concluded that G4S has not adequately met the requirements under OECD Guidelines Chapter IV, Paragraph 3 to seek to address the human rights impacts of its business relationships. Specific to this point, the UK NCP further concludes “…that there is evidence that the G4S has leverage, and could take action such as: lobbying immediate business partners and/or government and legal representatives, sharing best practices (with business partners, stakeholders, and the wider sector), and committing to new practices in regard to future contracts.”

In its own announcement about the Final Statement, G4S notes “G4S employees do not operate the equipment, play any part in prison regimes, or have any interaction with prisoners or those traveling through checkpoints along the separation barrier.” G4S has also commissioned an independent review of its operations that concluded that the company “has no causal or contributory role in human rights violations.”

Still, the OECD’s UK NCP message to PSCs (and beyond to other companies) is clear: as a PSC your actions may not cause or contribute to adverse human rights impacts, but under OECD Guidelines you have a responsibility to seek ways to prevent or mitigate adverse human rights impacts directly linked to your business operations, products, or services by a business relationship, even if you do not contribute to those impacts.

As PSCs (and the users of PSC services) consider their responsibilities to respect human rights, they will do well to closely examine as part of their human rights due diligence process how the OECD Guidelines extend to their business relationships. And, as the UK NCP’s Final Statement makes clear, PCSs that have leverage in their business relationships are expected to take actions with business partners and other stakeholders to mitigate adverse human rights impacts they are linked to by contracts.

The UK NCP’s Final Statement also provided specific recommended actions for G4S to consider if it is to fully comply with its responsibilities under the OECD Guidelines.  While these recommendations are specific to the OECD findings related to the complaint against G4S, the application of the principals related though these recommendations, which are based on the UN Guiding Principles on Business and Human Rights, are relevant everywhere. The UK NCP recommends:

  1. That G4S considers how it may be able to work with business partners in Israel to support action to address adverse impacts referred to in the complaint;
  2. That G4S communicates to stakeholders and business partners any actions it is taking in regard to the issues raised in the complaint;
  3. That G4S implements across its operations a contract approvals process that includes assessment of human rights risks and application of mitigations, as it has indicated its intention to do in the new governance risk and compliance management procedures shared in its comments on this statement.

G4S has indicated to the UK NCP that in July 2015 it intends to refine its contracts approvals process “to include assessment of human rights risks and assurance that appropriate mitigations are in place.” By establishing a policy commitment to respect human rights, PSCs and organizations that utilize PSCs can contractually require an up-front human rights due diligence process to identify potential adverse impacts of their business operations and related mitigation steps for all programs and business relationships. Doing so will allow PSCs to avoid causing or contributing to adverse human rights impacts and to prevent and mitigate impacts they are directly linked to by a business relationship – and in the long run may assist in avoiding costly litigation.

The applicability of the UK NCP’s findings, conclusions, and related recommendations to G4S amplify far beyond this specific complaint. Our view is that international PSCs will improve their services and the effectiveness of their operations, as well as guard against reputational and legal risks, by taking heed now rather than later.