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What are the 5 most challenging business and human rights issues to watch in 2023?

Updated: Sep 12, 2023

The World Bank has lowered the economic outlook from 2,9% growth in 2023 to only 1,7%. A global recession would hurt the weakest most, particularly in developing countries. This creates implications for human rights, most importantly for the realization of social and economic rights such as the right to education, the right to health, and the right to food. Likewise, we observe a massive deterioration of political and civic rights across the globe, driven by the war in Ukraine, but also by a major tendency towards authoritarian rule.

Both tendencies reinforce a major strategic challenge for multinationals that are bound to respect human rights in their operations and in their supply chains by the UN Guiding Principles on Business and Human Rights and the UN Global Compact. Supply chain legislation and the introduction of ESG standards has added up to the pressure on companies to consider the business and human rights dimension of their corporate activities.

In the following, we have defined the five most challenging business and human rights issues that companies should keep in their mind throughout 2023. Our results are based on materiality, which takes into account not only the extent of economic interaction between regions characterized by human rights violations, the magnitude of human rights (and human rights related-) international law violations but also the proximity between both in terms of corporate complicity.

Some of these are well-known and evident, while others are less discussed and might slip under the radar of corporate compliance. The focus on the five stated topics owes to the specificities of the business and human rights focus. The question is here to which extent corporate actors reap benefits from involvement in human rights violations. This does not diminish the situation in other countries such as Myanmar, North Korea, Iran, Burkinao Faso, Syria and Turkey.

5. Cobalt, Lithium, Copper and Rare Earth Supply Chains

The transition to clean energy requires the increased procurement of natural resources that are connected to environmental and social issues. Cobalt mining in the Democratic Republic of Congo depicts here one of the main worries raised by NGOs such as Amnesty International. A particular focus lies here on child labor in the artisanal mining of gold and cobalt. However, this is not the end of the story: Human rights issues that characterize these supply chains are linked to economic participation rights, human rights abuse by security forces or environmental consequences of mining activities that impede the right to health or conflict with the rights of indigenous peoples.

4. Human Rights Issues in Western Supply Chains for Cocoa and Coffee

The turbulences of global commodity markets, but also rising consumer prices in the Western world have heavily destabilized international supply chains. This aggravates the situation of farmers and producers in developing countries. As it happened already in the early 2000s drops in prices, but also lower demand for products with higher ESG standards is likely to result in higher levels of child labor. Two countries that are particularly affected by price movements of Cocoa and Coffee are Ghana and Cote d'Ivoire. Moreover, political conflicts in West Africa are intensifying caused by an economic recession, leading to a decline in political rights.

3. Conflict in Ethiopia Tigray Region

Ethiopia has been regarded as one of the world’s most promising markets, due to its cheap labor market and the sheer size of the country. However, the most recent escalation in the Tigray region has created major implications for international supply chains. Reports of human rights and international law violations document that business operations linked to Ethiopia need to be scrutinized for potential contributions in these atrocities. This applies for investment decisions in the region, in specific the textile industry, but also to the proliferation of dual use goods to actors involved in human rights violations.

2. Cultural Genocide in Xinjiang and Deteriorating Human Rights in China

According to international scholars, the entirety of human rights violations in Xinjiang amount to cultural genocide. So far, the situation has created major repercussions for companies operating in the region, but also for the textile industry as a whole, which has been repeatedly accused of breaching international labor standards by sourcing from the region. In fact, Xinjiang is one of the world’s most important regions of origin for cotton. Likewise, Xinjiang is a major producing and processing hub of polysilicon and other materials that are needed for green energy production. The human rights situation in China is worrying for other reasons as well. Not only minority rights of non-Han ethnicities are in decline, but also the rights of the average Chinese citizen, due to a rise in public surveillance and intensified securitization policies.

Business sectors exposed to violations of human rights are here the technology sector, but also raw materials or textiles sourced from China’s minority regions (Inner Mongolia, Tibet and Xinjiang).

1. Human Rights Violations in the Post-Soviet Space Putin’s decision to wage a war against Ukraine has led to a deterioration of human rights in Ukraine, Belarus, but also in Russia. The situation in the latter two countries is characterized by increasing limitations of freedom of speech, freedom of movement, but also by the deterioration of economic rights such as the right to health due to the decline in economic activity. The situation in other post-soviet states is tense as well. Kazakhstan’s opposition faces an uphill battle, while Azerbaijan might prepare a second attack on the remaining parts of Karabakh / Arzakh. The situation is reinforced by the flight of many young Russians that aim to escape conscription in the Russian army.

Consequently, the economic activities of Western enterprises in the region and the role of many post-soviet countries in Western supply chains (particularly Russia, Kazakhstan and Azerbaijan) increase the risks of international law and human rights violations. This owes to the fact, that state actors are strongly involved in the political economies of all named countries, in particular export-oriented sectors.


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