Information & Communication Technology

Continuing a Dialogue with Vodafone on Human Rights Due Diligence

Commentary, 06 October 2011

By John Morrison, Chief Executive, IHRB

Ed Miliband’s call for greater corporate accountability is welcome – but the proposed division between bad and good business risks being seen as overly simplistic.

Media coverage of last week’s Labour conference speech by Ed Miliband, in which the UK opposition leader criticised “predatory” companies” prompted me to write to the Financial Times with the straightforward but too often forgotten message that even “good” companies can sometimes do “bad” things.

Mr. Miliband’s call for greater corporate accountability is, of course, welcome – but the proposed division between bad (“predatory”) and good (“producers”) business risks being seen as overly simplistic.

Rather than drawing up lists of companies judged to be acceptable, I urged the UK government to develop an approach to corporate governance that would incentivize best practices and intervene when companies made decisions that ran counter to such practices, even when operating abroad.

I used the example of Vodafone’s performance in Egypt during the popular unrest in the country earlier this year to illustrate where I thought governments had an important role to play. At IHRB, we have commented on this case in previous commentaries (How should Internet and Phone Companies respond in Egypt? - Salil Tripathi, 04 Feb. 2011) (How Businesses have responded in Egypt - Salil Tripathi, 07 Feb. 2011) (The Good, The Ad, and the Ugly: How not to prepare ad campaigns on human rights and business - Salil Tripathi, 06 June 2011) and see it as an important example for the ICT sector.

In response to my letter, the CEO of Vodafone in Egypt, Hatem Dowidar, wrote to the FT this week to take issue with my comments. He stressed that the company had few options at the time other than to follow the demands from the then Egyptian government to close its mobile phone networks.

This is a fair point, but only up to a point. What Mr. Dowidar’s letter doesn’t address is whether Vodafone had considered any other options at the time this demand was made. It also fails to mention what the company could have done to avoid such a situation before signing a joint venture agreement with the government, given the context of the country’s long-standing declared state of emergency, and what it plans for the future.

The newly adopted UN Guiding Principles on Business and Human Rights require all companies to exercise human rights due diligence, in particular in contexts where the risk of potential violations of human rights is foreseeable.

Did Vodafone fully consider the extent to which its own operations in Egypt might have potentially made it complicit in rights violations? And given what it knows now, is it reviewing current or planned joint venture arrangements with other governments in high-risk contexts?

The good news for companies like Vodafone, if they agree to participate, is that a growing number of multistakeholder efforts are now in place that can help them work through how they should operate in keeping with the corporate responsibility to respect human rights when operating in difficult environments. Learning from the experiences of other industry sectors and initiatives is a critical step in putting in place the human rights due diligence processes the UN Guiding Principles now call on all companies to implement. The challenge for Vodafone, like so many other companies, is to publicly acknowledge it is seeking to improve its human rights performance, and demonstrate that it is doing so through concrete actions.

Related Links:

Good companies can do bad things - Letter by John Morrison to The Financial Times, 29 Sep. 2011

How Businesses have responded in Egypt - Blog by IHRB Policy Director Salil Tripathi, 07 Feb. 2011

"Human rights due diligence will be vital for companies" - Letter by IHRB Executive Director John Morrison to the Financial Times, 01 Feb. 2011

Vodafone: Egypt Made Us Send Those Pro-Mubarak Texts. Critics: So? - BNET, 03 February 2011

Vodafone accuses Cairo of co-opting network - Haaretz, 04 February 2011

How should Internet and Phone Companies respond in Egypt? - Salil Tripathi, 04 Feb. 2011

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