Risk assessments: Proponents are continuing a risk-based approach, seeking reports about how companies assess their supply chains and operations for red flags. At six—Amphenol, Corning, Hanesbrands, Macy’s, Texas Instruments and TJX—the request is for a report on each firm’s “process for identifying and analyzing potential and actual human rights risks of its operations and supply chain.” The resolution suggests that the company consider what principles should frame the assessment, how often it should occur, what metrics should be used to track and measure force labor risk and how the assessment results could be incorporated into company decisions.
The resolutions point out specific concerns at companies in independent assessments:
2018 Know the Chain report on forced labor gave scores of 9 out of 100 for Amphenol and 6 for Corning,
The 2018 Corporate Human Rights Benchmark report gave a score of 4.1 out of 100 to Macy’s, 13.8 to TJX and 38 to Texas Instruments;
A low score for Hanesbrands from the 2018 Fashion Transparency Index, Know the Chain and the Corporate Human Rights Benchmark.
A resolution from Oxfam America at Pilgrim’s Pride goes a step further and seeks a report on the company’s “human rights due diligence process to assess, identify, prevent and mitigate actual and potential adverse human rights impacts.” The proposal details problems with a wide range of worker’s rights in the meat industry and related environmental concerns, as well as what it says is public resistance to company expansions because of community impacts, alongside discrimination claims and environmental and labor fines.
At Wendy’s and KraftHeinz the resolution is the same, but includes the suggested report elements in the resolved clause; it adds at Wendy’s that it should “cover all aspects of Wendy’s business including its own operations, franchisees, cooperatives, and supply chains.”
SEC action—Hanesbrands challenged the proposal at the SEC, arguing that the resolution is moot and concerns ordinary business. Texas Instruments also says it is moot given its current policies and disclosures.
Withdrawal—NYSCRF has withdrawn an additional proposal also seeking a human rights risk assessment at Dunkin’ Brands after reaching an agreement. Amalgamated also withdrew at Hanesbrands following the challenge.
Food and human rights: Oxfam America has another food-related resolution, at Amazon.com, which wants the impact assessment to be about “at least three food products Amazon sells that present a high risk of adverse human rights impacts,” and follows the same identify-assess-remedy approach as the other proposals.
Investors gave 5.5 percent support to a proposal at Tyson Foods on February 7. Tyson is a family owned company with two classes of stock, which results in generally low votes. The American Baptist Church asked for a report on Tyson’s “human rights due diligence process to assess, identify, prevent and mitigate actual and potential human rights impacts.” The proponent felt the company’s current policies and level of disclosure do not provide adequate information on its human-rights related risks, some of which have short circuited its expansion plans because of environmental concerns. Tyson recently signed on to the United Nations Global Compact and must report on its progress and commitment to the code’s 10 voluntary principles.
China: Azzad Asset Management has a new proposal at Alphabet, seeking a “Human Rights Impact Assessment...by no later than October 30, 2019, examining the actual and potential impacts of censored Google search in China.” The resolution says subsidiary Google is developing a search engine called “Dragonfly” that will “blacklist websites and search terms about human rights, democracy, religion, and peaceful protest.” Azzad says the project calls into question the company’s human rights commitments.
Adopt and strengthen policies: Four proposals contend companies must have stronger policies. At the consultancy Booz Allen Hamilton, Azzad Asset Management says the firm should
develop and adopt a comprehensive human rights policy that includes an explicit commitment to support and uphold the principles and values contained in the United Nations’ Guiding Principles on Business and Human Rights, to be published no later than six months following the 2019 annual general meeting. The report shall be presented to relevant parties involved in contract approval and posted on the company website.
Azzad points out that Booz Allen operates in Saudi Arabia, which
has been repeatedly implicated in violations of basic human rights; among these are the 2018 assassination of Washington Post columnist Jamal Khashoggi and the military assault and blockade of Yemen. Yet, our company and its competitors have reportedly “played critical roles in [Saudi] Prince Mohammed [bin Salman]’s drive to consolidate power.” (“Consulting Firms Keep Lucrative Saudi Alliance, Shaping Crown Prince’s Vision,” The New York Times, November 4, 2018.).
It says adopting a policy “would enable [the company] to effectively manage and avoid allegations of abetting such abuses.”
Fiduciary duty connection—Harrington Investments has resubmitted a proposal seen last year at PayPal for the first time asking it again to “modify its formal government document [to] articulate the fiduciary duties of Board and management to ensure due diligence on Human and Indigenous Peoples’ Rights.” It delineates a range of actions taken by the company that touch on human rights issues—from policies that protect LBGTQ employees, to terminating service for conspiracy theorist Alex Jones’s Infowars website as a violation of his terms of service, to “not denying financial services to Israeli settlers in the occupied West Bank and Gaza Strip.” It posits an explicit fiduciary duty tie is needed because current policies are non-binding and have “limited legal teeth or enforcement mechanisms and therefore minimal assurance of respect or protection for global Human Rights.” The proposal earned 5.9 percent last year and must reach 6 percent to qualify for resubmission.
New policy—Mercy Investments has two more proposals. It asked Southwest Airlines to adopt or create “a comprehensive policy articulating our company’s respect for and commitment to human rights.” Mercy said the company has “no specific public commitment to respect Human Rights in line with” the UN Guiding Principles on Human Rights, and yet as “one of the world’s largest low-cost airline carriers [it] has significant leverage for identifying and addressing human rights risks in its operations and in its supply chain.” Mercy withdrew after the company agreed to study the Every Child Against Trafficking initiative and review and consolidate its human rights statements on its website.
At Sturm, Ruger, Mercy’s resolution is the same, but adds that the policy (as with the other proposals noted above) should include “description of proposed due diligence processes to assess, identify, prevent and mitigate actual and potential human rights impacts.” It reasons, “Given the lethality of gun manufacturers’ products and the potential for their misuse, the risk of adverse human rights impacts is especially elevated for all gun manufacturers, including Sturm, Ruger.” In 2018, a proposal at the company about gun safety earned unprecedented 68.8 percent support.
