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  • 1. ASN Bank IssuepaperHuman rightsWorking towardsa just worldfor all
  • 2. ASN Bank Issuepaper Human rights November 20112 A Introduction This ASN Bank Issuepaper on Human rights, climate change and biodiversity are the key focus areas of ASN Bank’s sustainability policy. Human rights Together they incorporate almost all issues that are compromises the following sections: important to all that ASN Bank does, including the selection of our investments. In making that selection, we always ask ourselves these three questions: A Introduction human rights: how do we affect people through our A.1 Description and importance of human rights investments? A.2 ASN Bank and human rights climate change: how do our investments contribute to climate protection? B Guiding principles biodiversity: how do we affect nature and the B.1 Obligations of countries environment through our investments? B.2 Corporate responsibilities B.3 Changing criteria These concerns are interconnected by the concept of justice. This forms the foundation for the sustainability C Application of the sustainability policy vision of ASN Bank. D Selection criteria for companies A.1 Description and importance of human rights D.1 General human rights criteria for companies Human rights are universal values that apply every- D.2 Equal treatment and non-discrimination where, always and to everyone, and in which human D.3 Arms dignity, justice, freedom and equality are paramount. D.4 Corporate security These values are enshrined in a great many internation- D.5 Child labour al treaties. Human rights are integral to being human D.6 Employees and concern essential matters such as: D.6.1 Forced labour access to food, water, shelter and medical care; D.6.2 Safe and healthy working conditions government protection of citizens and the protec- D.6.3 Living wage tion of privacy; D.6.4 Trade unions/freedom of association respectful treatment of employees and the local D.7 Privacy and freedom of speech community by companies; D.8 (Local) rule of law freedom to be yourself without being discriminated D.9 Local community and indigenous people against, freedom to express yourself, freedom of D.10 Consumers religion and freedom to be active politically and in society; E Selection criteria for government bonds bodily integrity and protection against violence; protection of vulnerable groups such as children, F ASN Bank’s other activities women and indigenous peoples; and issues such as access to education and a safe domestic environ- ment for children. Regrettably, these rights are still violated in many parts of the world. Sometimes the violations occur on such a large scale, or are so grave, that they are referred to as ‘gross human rights abuses’. This applies, for example, to genocide and war crimes. ASN Bank Issuepaper Human rights November 2011
  • 3. A.2 ASN Bank and human rights Our customers expect us to 3Our guiding principle is to respect human rights. There-fore, we test our investments and our own operations invest the money they entrustagainst the criteria that are set out in this Issue Paper.In part these are general criteria. We additionally to us in a sustainable mannerdevote specific attention to rights that we may affect,be it positively or negatively. Examples of such rightsinclude workers’ rights, equal treatment, arms and entails that we respect human rights. We do everythingsecurity, children’s rights and consumers’ rights. we can to fulfil this expectation, and in doing so we are regularly faced with dilemmas. In such cases we consultOur core activities as a bank pertain to investing in with customers, civil society organisations and compa-countries through government bonds and in companies nies, and base our choices in part on their opinions.through loans, shares and bonds. By ‘companies’ wemean listed and non-listed businesses with a profitmotive, as well as not-for-profit organisations and B Guiding principlessemi-government organisations. We also take accountof human rights in our own operations, for example We base our human rights criteria on the 1948 Universalwith respect to our own employees, customers and Declaration of Human Rights (UDHR) and the interna-suppliers. tional standards that ensue from it, directly or indi- rectly.1 We also refer here to the UN Guiding Principles (see box), which links these standards with the businessASN Bank’s activities, sector. These principles are based on existing obliga- tions and common practice. They refer to various re-investments and loans gional and global standards that have been laid down in resolutions and conventions. We consider these closelyreflect the sustainable in the formulation and interpretation of our criteria.society, that we aspire By ‘human rights’ we mean all types of human rights: civil, political, economic, social and cultural rights andto in the long run the rights of special and/or vulnerable groups such as children, women, minorities and indigenous peoples.ASN Bank’s activities, investments and loans reflect These international standards form the starting pointthe sustainable society that we aspire to in the long for our policy. In addition, we take into account therun. In that sustainable society, there is no child labour, opinions of our customers, civil society organisationscompanies respect the rights of employees, communi- and other experts. At relevant points in the text, thereties and indigenous peoples, and no gross violations of are footnotes indicating the standards and sources onhuman rights occur. In this Issue Paper, we set out con- which our human rights policy is based.crete criteria that we have formulated using conceptssuch as justice, freedom, equality and human dignity.Our investments are tested against these criteria.The opinion of our customers is important here. Theyexpect us to invest the money they entrust to us in asustainable manner. It goes without saying that this1 Such as the International Bill of Human Rights (the UDHR plus the International Covenant on Economic, Social and Cultural Rights and the International Covenant on Civil and Political Rights) and specialised covenants such as the Convention on the Rights of the Child.
  • 4. 4 Human rights and the business sector - the work by Ruggie ing human rights. They have to prevent violations of human rights. If they have an adverse impact on human rights, they International law provides clear parameters for human have to remedy this or compensate for it. In addition, the rights. International treaties impose obligations on coun- principles deal with the responsibility of countries and com- tries and on citizens with respect to each other. The inter- panies with regard to compensation: they must ensure that national obligations of companies for human rights are less victims of human rights violations can avail themselves of clear. To fill this gap, numerous initiatives, norms and princi- their rights. ples have been developed for businesses, often on a volun- tary basis. The United Nations has also been trying for some Professor Ruggie’s work and the associated international years to describe the obligations of businesses with respect developments were important reasons for ASN Bank to re- to human rights more clearly. view its human rights policy. In some places the principles are explicitly stated in the text, mainly in paragraphs B.2, D A draft version of the UN Human Rights Norms for Business and D.1. We embrace Ruggie’s work and promote his work was rejected due to, in particular, resistance from the pri- among the businesses that we accept into our investment vate sector. Following this, in July 2005, the American Pro- universe. In doing so we must make choices to arrive at a fessor John Ruggie was appointed as the UN’s Special Rep- workable policy, however. We base such choices on those resentative of the Secretary-General on the issue of human criteria that best protect and enhance human rights. rights and transnational corporations and other business en- terprises. Ruggie was given the task of making recommen- The international debate about corporate responsibility for dations that would be supported by countries, companies human rights is still very much on-going, as is the debate on and civil society. In June 2008, he published his framework the question to what extent countries are responsible for Protect, Respect, Remedy. Subsequently, the UN granted the international activities of companies headquartered in him a new mandate to put his framework into operation. their country. We follow these discussions closely and refine our criteria when and to the extent that we consider it rel- In June 2011, the UN Human Rights Council adopted the evant to do so. Guiding principles on business & human rights. These con- tain guidelines for countries and businesses. Countries are under an obligation to protect human rights by means of, for example, appropriate policy, effective regulations and ac- cess to justice. Businesses have the responsibility of respect- B.1 Obligations of countries2 Countries must also create the conditions and take Pursuant to international human rights treaties, measures to make this possible.3 countries have an obligation to respect, protect and promote human rights. In concrete terms, this means Countries’ specific responsibilities regarding business- that countries: related human rights violations are also formulated in do not violate any human rights; the UN Guiding Principles: the ‘duty to protect’. This must protect the human rights of all people who are means that countries must provide for proper policy within their territory or jurisdiction; in addition and effective rules to prevent human rights violations they are also responsible for violations caused by by companies. If such violations nevertheless occur, private actors such as companies; countries must ensure that victims can avail themselves must give all people within their territory or juris- of their rights. diction the opportunity to exercise their rights. 2 Throughout this Issue Paper we use the term ‘countries’ where also ‘states’ can be read. The latter term is formally more ap propriate since the state is the acting power. However, for ease of reading we use the term ‘countries’. 3 With regard to the right to education, countries are obliged, for example, to ensure that children are genuinely able to go to school. They do this by arranging for affordable schools within a reasonable distance, with qualified teachers, from which children cannot be excluded on the grounds of their gender, religion or cultural background. ASN Bank Issuepaper Human rights November 2011
  • 5. Government bonds and risk countries We find it important that 5 By means of government bonds, we invest in countries that companies pursue both lead the way in the field of human rights. To select these countries, we examine their performance as regards various good policy and good practice aspects, such as child labour, trade union freedom, forced labour, discrimination, corruption and income distribution. in the field of human rights, We also assess various environmental aspects. The countries that pass the test enter our investment universe. You can which is only possible if they find them on our website. For more information, please refer to ASN Bank’s Issue Paper on Government Bonds. know how they are performing We invest in companies, for example via the ASN invest- in this field ment funds. We examine whether the companies are active in a risk country and/or a risk sector. For information about how this works in practice, please see Chapter D. Policy and practice We find it important that companies pursue both good policy and good practice in the field of human rights,B.2 Corporate responsibilities4 which is only possible if they know how they are per-Companies have the responsibility to respect human forming in this field. We therefore consider it an assetrights. They must make sure to avoid violating hu- if they have a proper procedure in place to identify anyman rights. And they must ensure that their products possible negative effects of their operations on humanor services are not abused by other parties in human rights. Such a procedure may take the form of humanrights violations. If companies have an adverse impact rights due diligence, as described in the box. Compa-on human rights in any way, they should remedy this or nies must also try to prevent human rights violations.compensate for it.. An effective complaints procedure and compensation mechanism is important here.Supply chain responsibilityCompanies can violate rights through their own actionsor omissions, or through their responsibility for theactions of other parties. This concerns parties that areaffiliated with the company such as business partners,parts of the ‘value chain’, and other parties that aredirectly connected with the operations, products orservices. In practice, these are chiefly the suppliers andcustomers of a company.4 The definition of ‘company’: companies include listed and non-listed businesses with a profit motive as well as not-for-profit organisations and semi-government organisations, etc. The demarcation of a company is particularly important to us. For these purposes we apply the accounting principles: everything that must be included in the balance sheet belongs to a company.
  • 6. 6 ‘Do no harm’: what Ruggie expects of companies B.3 Changing criteria Since we apply our human rights criteria in a very prac- Companies must ensure that they respect all human rights tical manner, they need to be defined in far more con- and do not violate human rights or indirectly contribute to crete terms than many of the international standards. such violation. This applies to their own actions and those of We deal with specific themes, such as child labour, business relations that are directly associated with the op- forced labour and working conditions. We also have erations, services or products. absolute product criteria, as we exclude weapons, por- nography, tobacco and gambling. We assess how coun- In this regard, Ruggie expects the following from compa- tries perform generally in the field of human rights. In nies: doing so we are guided by the relevant international - Policy standards to which we refer in the text or footnotes. That they draw up a human rights policy that refers to all human rights, that involves internal and/or external At the same time, it is not possible to draw up a com- experts, that is approved at the highest level, and that is prehensive list of ethical and sustainable criteria which made public and implemented in operational procedures our banking activities must meet. The reason for this and practices. is that our world is continually changing and is enor- - Human rights due diligence (knowing and showing) mously complex. In practice, we are regularly faced • Risk analysis: to identify real and potential risks and with dilemmas for which our criteria do not provide an their effects on human rights. This is a continuous pro- unequivocal solution. In such cases we might ask our cess, the effectiveness of which needs to be checked on customers and other stakeholders for their opinions, a regular basis. and incorporate these in our decision-making process. • Actions: the company must act on the basis of the find- ings and set up mechanisms to prevent and minimise risks. It should take measures in the event of violations. We use our human rights • Monitoring: the company should monitor whether its measures are sufficiently effective. criteria when examining the • Reporting: transparency and communication with relevant stakeholders regarding findings and measures. sustainability of companies - Other (preventative) measures The company should, for example, put a complaints mecha- and countries nism in place for victims of human rights violations. - Compensation If human rights have been violated, the company should C Application of the sustainability policy take measures to compensate victims or to discontinue or remedy the violation. We use our human rights criteria when examining the sustainability of companies and countries. On this basis we determine which companies and countries can be accepted into our investment universe. This is the pool of companies and countries in which we may invest. We also use the criteria to re-examine companies and countries that have already been accepted into our in- vestment universe. They furthermore provide guidance in our discussions with companies (dialogue or engage- ment) and in determining our voting policy.5 5 For more information, please visit ASN Bank Issuepaper Human rights November 2011
  • 7. Dialogue the company and ask it to adjust its policy or to improve 7 the implementation of its policy. If the dialogue does not Dialogue with companies (engagement) is an important achieve satisfactory results, we henceforth exclude the means of addressing sustainability as an issue. Through such company from our investment universe. dialogue, we aim to make companies and institutions more - Criteria not yet met aware of their performance in the areas of the environment There are also situations in which we enter into a dialogue and human rights and to improve this performance. with a business while it does not yet meet our criteria and therefore cannot be approved for our universe. We hope We conduct a dialogue in the following situations: that such dialogue will cause the business to take meas- - Provisional acceptance ures so that it does meet the criteria. We often conduct ASN Duurzaam Small & Midcapfonds invests in small and these dialogues with other investors, for example in the medium-sized European companies. They fulfil our abso- context of PRI (Principles for Responsible Investment). lute exclusion criteria. However, it is often the case that - By way of encouragement they only partially fulfil our other sustainability criteria. People who are involved in companies, institutions and For example, they may be very environmentally friendly projects very much appreciate being selected for invest- but lack a human rights policy. We may still invest in such ment. We therefore notify them accordingly, as much a company, but they will have a probationary status for as possible. We try to have regular contact with the three years. During this period we maintain close con- 6 companies and institutions that we invest in so that they tact. In this way we encourage the company to pursue a may understand more clearly what we expect of them as business strategy of maximum sustainability. If a compa- regards environmental and human rights performance. ny fails to show any improvement within three years, it is - By voting henceforth excluded from our investment universe. Finally, we communicate with companies by actively voting - Suspicion that a company no longer meets the criteria at their General Shareholders’ Meetings and thus letting Sometimes we suspect that a company in the investment them know what we think of their policy and what changes universe no longer meets our investment criteria. This can we would like to see. emerge from the three-yearly review or from new infor- mation received about the company. We then contactOn the basis of our first examination of a company, As said, the human rights criteria apply to countries andwe determine whether it meets our criteria and can be companies. As they have different responsibilities foraccepted into our investment universe. If a company is human rights, we apply two separate sets of criteriaaccepted, we test anew every three years whether it which are each split into absolute and relative criteria.still meets our criteria. If prompted by circumstances The absolute criteria are conditions that all countrieswe will bring the assessment forward, for example if and companies in which we invest must fulfil. If thatcontroversial activities have come to light. is not the case, then we do not accept them into our investment universe. For example, we do not invest inOur examination is a snapshot. The outcomes are companies that are involved in any way in arms trade ordependent on the information that is available at that production.moment. Of course we do our utmost to obtain as much The relative criteria indicate whether a country or com-information as possible. We have in-house sustain- pany belongs at the top of its group or sector.ability experts, and make use of detailed studies byspecialised international agencies, information from Situations may occur in which a company or countrythe businesses themselves, and information from NGOs does not meet a criterion to the letter, but does live up(local or otherwise), trade unions and local media. to it in practice. In the end we attach greater weight to6 With effect from 2012, a period of three years will apply here.
  • 8. 8 what happens in practice.7 Guidelines also evolve, and D Selection criteria for companies new and better guidelines may emerge. Sometimes we draw up supplemental policy memoranda about topical Our criteria for companies in the field of human rights themes that focus more closely on general policy or a are set out below. Per topic we briefly describe the sector, or that fill a (temporary) gap in the policy. Con- situations and activities that can influence human rights flict minerals in relation to the supply chain of electron- in a negative way. This is followed by the assessment ics companies is one example (see below). We include guidelines that companies need to comply with. We these memoranda in our assessments. only approve companies that comply with the assess- ment guidelines. See the box below for information The absolute criteria apply to all investments by ASN about how these criteria are applied in practice.. Bank and ASN investment funds. The relative criteria apply to ASN Duurzaam Aandelenfonds, ASN Duurzaam Obligatiefonds, ASN Duurzaam Mixfonds, ASN Milieu & Waterfonds, ASN Duurzaam Small & Midcapfonds and ASN Bank’s investments. The relative criteria are not applicable to ASN Groen- projectenfonds and ASN-Novib Mikrokredietfonds, as these two funds are subject to special regulations of the Dutch government. ASN Groenprojectenfonds is subject to the Green Project Regulations [Regeling Groenprojecten], while the Socio-Ethical Project Regu- lations [Regeling Sociaal-Ethische Projecten] apply to ASN-Novib Microkredietfonds. Our risk assessment Before we analyse a company, we first assess whether it operates in risk or high-risk countries or sectors. This assessment serves as basis for our analysis level. How does this work in practice? We make a sector overview of the principal risks in the fields of human rights, biodiversity and climate change. We assign the sector to a risk category. We then determine in what sector and in which type of risk country/countries the company operates. If the company is active in a number of countries, we check whether these include risk or high-risk countries. The sector risk and country risk together determine the analysis category.8 How do we define the various terms concerning risk? Country risk We distinguish between high-risk countries, risk countries and low-risk countries. High-risk countries Countries where gross violations of human rights occur: genocide and other crimes against humanity such as torture (on a large scale) and war crimes; or where the risk of such violations is very high. Risk countries Countries where there is a high risk of other human rights violations and/or corruption. Low-risk countries All other countries, i.e. countries that we have not designated as high-risk countries or risk countries. 7 A company might, for example, continue to neglect to formulate its human rights policy while dealing very well with human rights in practice. 8 The sector risk is a guide in determining the business risk. It follows that the analyst can assign the company a different risk category than the sector in which the company is active, for example because a company is active in a number of sectors or, conversely, takes part in a very limited number of sector activities. ASN Bank Issuepaper Human rights November 2011
  • 9. We determine which countries belong to which categories on an annual basis. Our assessment includes the risk that certain vio- 9 lations will take place in a country. For this purpose we check, for example, the score on Transparency International’s Corruption Perception Index. This procedure is detailed in the policy memorandum ‘Risk Countries’. Sector risk In accordance with the International Finance Corporation (IFC)’s categories, we classify sectors as follows9: High sector risk: The chance is very high that the sector has an adverse impact on human rights, biodiversity and climate change, and that this impact is irreversible and/or unprecedented.10 This category includes sectors such as oil and gas, mining and infrastructure. Average sector risk: There is a real chance that the sector has an adverse impact on human rights, biodiversity and climate change, and that this impact is irreversible and/or unprecedented.11 This includes sectors such as clothing, software, IT and retail products. Low sector risk or positive impact: The possibility that the sector has an adverse impact on human rights, biodiversity and climate change is small, or the sector is making a positive contribution in this area.12 Sector risk + presence in risk countries = analysis level We determine the assessment level on the basis of the country risk of the countries in which the company is active and the sector risk: Country risk Sector risk High-risk countries Risk countries Low-risk countries High Avoid Further analysis Normal assessment Average Further analysis Further analysis Normal assessment Low Further analysis Further analysis Normal assessment Analysis categories We distinguish between three analysis categories: ‘avoid’, ‘further analysis’ and ‘normal assessment’. What do these entail? Avoid We avoid investments in companies that operate in high-risk countries and high-risk sectors, except if the company: - supplies essential humanitarian services or products as its primary activity, thus contributing to human rights in that country (supplying, for example, medical provisions, homes or education), and - can guarantee that it is not directly or indirectly involved in serious human rights violations by a country, and - can guarantee that its activities are in conformity with all our other sustainability criteria. Further analysis This analysis must answer the following question: can the company sufficiently guarantee that its activities meet all our cri- teria in countries where the rules for human rights and the enforcement of these rules are not sufficiently provided for? This is possible if it has formulated an effective policy and monitors the implementation of this policy. With regard to high-risk9 This is designated by the IFC as category A: ‘projects expected to have significant adverse social and/or environmental im - pacts that are diverse, irreversible, or unprecedented’.11 This is designated by the IFC as category B: ‘projects expected to have limited adverse social and/or environmental impacts that can be readily addressed through mitigation measures’.12 This is designated by the IFC as category C: ‘projects expected to have minimal or no adverse impacts, including certain finan- cial intermediary projects’.
  • 10. 10 countries, we also assess whether the company is involved in serious human rights violations by the country, for example if it supplies products or services that contribute to such violations or from which a totalitarian or corrupt regime profits.13 Normal assessment This assessment answers the question whether the company’s activities comply with local laws and regulations. To determine this we investigate whether there are any controversies regarding human rights that are in conflict with the local laws and regulations. In some cases we also expect specific policy from a company in this category, for example if it is known that, in a certain low-risk country, the chance of a specific human rights violation is very high. The violation of trade union rights in the US is an example of this. If national and international laws differ, we find it important that the company adheres to the standard that provides the best protection for the individuals or group of people concerned. Analysis categories and applicable criteria In each section of this Issue Paper, we specify per analysis category the criteria we apply. What we expect from companies and how we assess tions are organisations that are connected with the them is set out below, per criterion. This concerns crite- activities or the production process of a company and ria with respect to the following areas: that the company can exert influence on. D.1 General human rights criteria for companies Depending on the analysis category (see the box ‘Our D.2 Equal treatment and non-discrimination risk assessment’), we have various expectations of the D.3 Arms company. For each category we specify the applicable D.4 Corporate security criteria. D.5 Child labour We also expect companies to have a policy in place for D.6 Employees their supply chains in risk countries. If the risk of po- D.6.1 Forced labour tential human rights violations (serious or otherwise) is D.6.2 Healthy and safe working conditions high, they have to take appropriate measures through- D.6.3 Living wage out the entire supply chain. D.6.4 Trade unions/freedom of association D.7 Privacy and freedom of speech D.8 (Local) rule of law We select companies that D.9 Local community and indigenous people D.10 Consumers respect human rights, and D.1 General human rights criteria for which are not involved in companies We select companies that respect human rights, and human rights violations by which are not involved in human rights violations by third parties. Formulated negatively: we exclude third parties companies if they do not respect fundamental human rights. This could be because they themselves violate human rights, or because business relations or other organisations connected to their operations, products or services violate human rights. Examples here would include tolerating such violations, contributing to them directly or indirectly, facilitating them or stimulating them intentionally or unintentionally. Business rela- 13 Assessment mainly takes place with the help of input from reliable parties and/or information about controversies. ASN Bank Issuepaper Human rights November 2011
  • 11. We consider the violation of they actively protect and promote human rights. This 11 area is still evolving, however. Few companies havehuman rights proven if fully implemented their human rights policy in their operations and their relationships with third parties,parties that we deem such as suppliers. Not many companies perform risk analyses either, or continually monitor whether thereliable demonstrate this to policy is actually executed and what effect it has. In practice companies usually perform audits, meaningbe the case that they periodically measure whether the conditions are being met. Serious controversies We like to see companies When is a particular case a ‘serious controversy’? We deter- mine this by means of several questions. Are human rights set themselves apart in a being violated? What is the scope of the violations? Are they occurring consistently or on a large scale? Are they deliber- positive sense by acting as ately perpetrated or tolerated? What is the nature of the violation? What is the company’s response? a trailblazer We consider the violation of human rights proven if parties that we deem reliable demonstrate this to be the case. In ac- We like to see companies set themselves apart in a tual practice, our assessment is based on multiple sources. positive sense by acting as a trailblazer; for example We also often consult the company itself. We expect the by performing ‘human rights due diligence’ and be- company to show a cooperative and transparent attitude. ing transparent about their findings and measures.14 Another aspect still developing is the treatment of victims of the companies’ violations. For example:If there are acute malpractices or controversies in the does the company have a complaints procedure? Andarea of human rights, the company must take action. a procedure for remedying or compensating for theThe malpractices must be resolved or their effects consequences of human rights violations?minimised. They are also expected to take measures toavoid any repetition. The extent to which companies can meet the relative criteria ranges from ‘not’ to ‘completely’. We selectIf national and international law differ, we adhere to those companies that demonstrate the best perform-the provisions that provide the best protection for in- ance for the relative criteria in their sector. We intenddividuals. There may be legal, cultural or social reasons to promote the work of former UN Special Repre-that make it difficult for a company to comply with sentative Ruggie among the companies included in ourinternational law in certain countries. In such cases, we investment universe.expect the company to devote every possible effortto respecting human rights and to act in the spirit ofinternational standards. In these cases we assess theseriousness of any deviation from international stand-ards and the extent to which the deviation is necessary.The relative criteria indicate the level of ambition. Theyapply to all companies, irrespective of the countries inwhich they are active. We value companies positively if14 See the box in Section B.2 of this Issue Paper.
  • 12. 12 Conflict minerals rights violations by the state, for example by sup- plying products or services that contribute to such For the manufacture of its products, the electronics industry violations or from which a totalitarian or corrupt depends on (noble) minerals such as tin, tantalum (such as regime benefits.18 coltan) and cobalt. The risk exists that the mining of these The following criteria apply to all three analysis catego- minerals not only adversely effects the environment, but ries (‘avoid’, ‘further analysis’ and ‘normal assessment’): also reslults in social malpractices. In some countries there → For legal, cultural or social reasons, it can some- is even the risk that the mining and trade in (noble) minerals times be difficult for a company to comply with serve to finance armed conflict. In such cases we use the term international law in certain countries. In such cases, ‘conflict minerals’. When selecting electronics companies we expect the company to devote every possible for the ASN investment universe, we investigate whether effort to respecting human rights and to act in the the companies have a supply chain policy for conflict mine- spirit of international standards, and we assess the rals, how they pursue this policy in practice, and whether seriousness of any deviation from international they have signed up to leading initiatives in this field. standards and the extent to which the deviation is necessary. → There are no serious or consistent controversies in Absolute criteria: the area of human rights. The following criterion applies to the analysis category → If an occasional incident occurs, the company ‘avoid’: immediately takes adequate measures. → We can only approve a company if it supplies essential humanitarian services or products and/or is not involved either directly or indirectly in serious We ascertain whether the human rights violations by a country; it must also meet the other criteria. company has formulated The following criteria apply to the analysis category ‘further analysis’: policy in the area of human → We ascertain whether the company has formulated policy in the area of human rights that refers to rights recognised human rights treaties15; or have signed up to leading initiatives16; and to what extent it has declared its policy applicable to all of its activities Relative criteria: and in every country in which it operates. The following criteria apply to all analysis categories → If a company has suppliers in high risk or risk coun- (‘avoid’, ‘further analysis’ and ‘normal assessment’): tries and/or risk sectors, we check whether they → Risk analysis: the company conducts a risk analysis have a supply chain policy geared towards prevent- of the real and potential risks and their effects on ing human rights violations and violations of the human rights and repeats this analysis regularly. fundamental labour standards of the International → Operating processes: the company implements its Labour Organisation (ILO)17. policy and the results of the risk analysis in its in- → In the case of high-risk countries, we also assess ternal operating processes, for example in codes of whether the business is involved in serious human conduct and contracts. 15 The human rights defined in the Universal Declaration of Human Rights and the international human rights standards based on it, such as the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights; and/or the UN Guiding Principles on Business and Human Rights. 16 Such as the UN Global Impact, GRI or relevant sector initiatives. A company can also endorse the OECD Guidelines. 17 The fundamental labour standards of the ILO are: trade union freedom (ILO Conventions Nos. 87 and 98), no forced labour (ILO Conventions Nos. 29 and 105), no child labour (ILO Conventions Nos. 138 and 182) and no discrimination (ILO Conven- tions Nos. 100 and 111). 18 Assessment mainly takes place with the help of input from reliable parties and/or information about controversies. ASN Bank Issuepaper Human rights November 2011
  • 13. → Suppliers: the company discusses human rights The company is also responsible 13 standards with suppliers and joint ventures, and records these standards on paper (in contracts, for for creating a working example).→ Monitoring: the company permits internal and environment in which no external monitoring and/or verification of the extent to which it follows its own policy or - in the discrimination occurs case of normal assessment - the national legislation, and of the effect of any measures taken as a result of the risk analysis. may be taken for vulnerable or disadvantaged groups→ Transparency and reporting: the company is in order to alleviate or eliminate a situation of inequal- transparent about its practice and performance in ity. This is also referred to as positive action or ‘special the field of human rights, in accordance with its measures’. policy or - in the case of normal assessment - in ac- cordance with national legislation; it reports on its For employees this means, for example, equal treat- performance and on any measures it may have taken ment in the selection and recruitment of new person- as a result of the risk analysis. nel, remuneration, fringe benefits, promotion, training,→ Dialogue: the company consults with the local pension and dismissal. The company is also responsible community, trade unions and NGOs and engages in for creating a working environment in which no dis- dialogue with them.. crimination occurs.→ Complaints procedure: the company has a com- plaints procedure for employees and other (possi- Activities: ble) victims of any violations.. This criterion concerns, in particular, the policy for→ Compensation/redress: if violations have occurred, employees of the company itself and its suppliers. It the company has a procedure in line with national can also apply to other stakeholders such as customers. legislation and international standards to remedy There is an increased risk in countries where certain the consequences for victims if possible, and/or forms of discrimination are prevalent, such as discrimi- to compensate them if such remedy is not possible nation on the basis of disease (HIV/AIDS), gender, or only in part. The company confers with victims caste, descent, disability and sexual orientation. regarding suitable measures. Absolute criteria:D.2 Equal treatment and non-discrimination19 The following criterion applies to the analysis catego-We expect companies in our investment universe to ries ‘avoid’ and ‘further analysis’:interact respectfully with their employees (including → The company excludes all forms of discrimination.20those employed on a flexible basis), suppliers, custom- The company has formulated policy regarding non-ers, local residents and other stakeholders. We expect discrimination and equal treatment.them to refrain from discrimination, on any grounds The following criteria apply to all analysis categorieswhatsoever, and to treat people equally in equal (‘avoid’, ‘further analysis’ and ‘normal assessment’):circumstances. By way of exception, specific measures → There are no serious or structural controversies in19 UDHR Articles 1, 2 and 23; International Covenant on Civil and Political Rights, Articles 2(1) and 26; ECHR Article 14; Interna- tional Convention on the Elimination of All Forms of Racial Discrimination (1965); the UN Women’s Convention; ILO Conven- tion No. 100 regarding equal remuneration (1951); ILO Convention No. 111 regarding discrimination in employment and occupation (1958); ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (1977); Global Compact principles 1 and 6; GRI (Performance Indicators HR4, LA13 and LA14; OECD Guidelines (Guideline V.1.e).20 If a company describes specific forms of discrimination, we expect such description to be as complete as possible. In this res- pect, our preference is that they refer to discrimination on the basis of gender, race, nationality, religion, political views, social origin (in accordance with the ILO), but also to other forms of discrimination such as age, disability, sexual orientation and health, for example discrimination against employees with HIV/AIDS.
  • 14. 14 the area of discrimination or equal treatment. ASN Bank does not invest in → If an occasional incident occurs, the company im- mediately takes adequate measures. the arms industry Relative criteria: The following criteria apply to all analysis categories active in the manufacture of or trade in arms. We can- (‘avoid’, ‘further analysis’ and ‘normal assessment’): not and will not reconcile ourselves with the idea that → If the company is active in countries where certain the arms industry benefits from having (more) armed forms of discrimination are prevalent, it takes spe- conflicts. Consequently, this means that we also refrain cial measures accordingly. It describes such form/ from every form of funding or investing in companies forms of discrimination separately in its policy. This that are active in the development, manufacture, also applies if it has suppliers in such countries. distribution of or trade in arms. By ‘arms’ we mean all → The company ensures that its policy and activities types of conventional weapons, ammunition, weapon do not have discriminatory consequences, whether parts, supporting technologies and associated exper- deliberate or not. tise. For a precise definition of the term ‘arms’ we use → The company assumes responsibility for creating the Common Military List of the European Union. This a working environment in which no discrimination list contains a wide-ranging summary of weapons, parts occurs, and takes measures when employees dis- and chemicals, as well as software. criminate against each other. → The company takes special measures to protect What is our position in this respect regarding the vulnerable groups, and also makes special provision production of dual-use products? These are products for specific groups such as occupationally disabled or technologies that not only have a civilian applica- people and pregnant women. tion but that can also be essential in the development and production of arms. Examples include navigation D.3 Arms21 electronics, avionics and certain chemicals. We judge ASN Bank does not invest in the arms industry. This is dual-use products on a case-by-case basis. Using the not required under human rights treaties, but is a crite- EU list of dual-use products, we determine whether a rion that we adopt by choice. We realise that weapons product is a dual-use product.22 Subsequently, we as- are important for peace missions, and that the police, sess the extent to which the dual-use product has been for example, sometimes need weapons to prevent developed mainly for the arms industry, or to what crime and to maintain law and order. But arms are also a extent it is applied in armaments. Depending on this as- source of great misery. Because they are easily avail- sessment, we determine whether the product or service able, they contribute significantly to the outbreak and falls under our arms criterion.. continuation of armed conflicts. The devastating con- sequences of the use of arms are sufficiently familiar to As we do not want to invest in the arms industry in any all. way, we only apply absolute assessment guidelines in this context. That is why we do not invest in companies engaged in or benefiting from war or armed conflict, or that are 21 For the description of arms and their components we rely on the Common Military List of the European Union. This list is revie- wed annually. We furthermore heed the following: the UN Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (1975); the Rome Statute of the International Criminal Court (1998); the Convention on Certain Con- ventional Weapons (1980); the Convention on Cluster Munitions, 2008; the Nuclear Non-proliferation Treaty,1970; the Biolo- gical and Toxin Weapons Convention, 1975; the Chemical Weapons Convention, 1997; the Mine Ban Treaty, 1997. The most important treaty is still under development and is expected to be adopted by the UN in 2012: the Arms Trade Treaty. 22 The EU list of dual-use products is contained in Annex I of Council Regulation (EC) No. 428/2009 (regarding the control of exports, transfer, brokering and transit of dual-use items). ASN Bank Issuepaper Human rights November 2011
  • 15. Activities: Activities: 15Manufacture of weapons and parts that are essential This criterion is particularly relevant for companies withfor weapons. This criterion is relevant to manufactur- large premises or with valuable products, resources orers of engines and industrial machinery, the chemical, materials. It is also relevant for companies that operateICT and electronics sectors, shipbuilders, the aviation in countries with a lot of criminal activity and whereindustry, metal companies and energy system suppli- corporate security is a common concern. Companies iners, among others. countries with a weak or ineffective government are at an increased risk.Absolute criteria:The following criteria apply to all analysis categories Absolute criteria:(‘avoid’, ‘further analysis’ and ‘normal assessment’): The following criteria apply to all analysis categories→ The company is not active in any way in the deve- (‘avoid’, ‘further analysis’ and ‘normal assessment’): lopment, manufacture and distribution of or trade → There are no examples of excessive violence or in- in weapons according to the EU list. timidation by the company’s or lead suppliers’→ The company is not active in any way in the deve- security staff. lopment, manufacture and distribution of or trade → If an occasional incident occurs, the company im- in dual-use products according to the EU list. This mediately takes adequate measures. concerns products that are mainly developed for the arms industry as well as products that are mainly used in the arms industry. According to the ILO, the→ In the event that a company’s product unexpectedly proves essential to the manufacture of weaponry, minimum age at which the company will take adequate measures to pre- vent this. children may start work isD.4 Corporate security23 fifteen yearsWe do not invest in companies that maintain security ina manner that violates human rights. It is irrelevant herewhether the security is managed by the company’s own D.5 Child labour24personnel, contracted companies or local authorities. According to the ILO, the minimum age at which chil-This also includes all actions of the company’s security dren may start work is fifteen years. In poor countries,staff, even if these fall beyond the scope of the term exceptions may be allowed for 14-year-old children on‘security maintenance’, such as action against protest- economic grounds. Children below the age of eighteening local residents. may never perform work that is counted among the worst forms of child labour: slavery, work as a childWe expect companies to make clear arrangements with soldier after forced recruitment, and work in the pros-their security staff to prevent violence and to ensure titution and pornographic industries. The worst formsthat they never use excessive violence. We also expect of child labour also include using children for illicitthem to never use violence or intimidation to prevent activities and other practices harming children. This isor end demonstrations by citizens, employees or trade described in the ILO Convention concerning the Worstunions. Forms of Child Labour.2523 UDHR Article 3; Article 6 Covenant on Civil and Political Rights (right to life, liberty and security of person); the UN Basic Prin- ciples on the Use of Force and Firearms by Law Enforcement Officials (1990); GRI (Performance Indicator: HR8); the Voluntary Principles on Security and Human Rights.24 ILO Convention No. 138 and Recommendation No. 146 concerning the Minimum Age of Fifteen Years (1973); ILO Convention No. 182 and ILO Recommendation No. 190 concerning the Worst Forms of Child Labour; UN Convention on the Rights of the Child (1989); UN Global Compact (Principle 5); GRI (Performance Indicator: HR 6): OECD Guidelines (Guideline V.1.c).25 ILO Convention No. 182 concerning the Worst Forms of Child Labour (1999).
  • 16. 16 ASN Bank solely invests interpretation of our criteria in respect of employees on these ILO standards. Where employees are concerned, in companies that protect ASN Bank specifically focuses on the following work- ers’ rights: children against no forced labour; healthy and safe working conditions; exploitation a living wage; trade unions/freedom of association. ASN Bank solely invests in companies that protect We will explain for each workers’ right which risks are children against exploitation. We are referring here to involved and which criteria we apply. We have already companies that do not use or benefit from any form of separately discussed child labour as well as non-dis- child labour. Accordingly, we exclude companies if they crimination and equal treatment. These two issues have or their suppliers use child labour. That is why we have been identified by the ILO as fundamental workers’ formulated absolute criteria only. rights, along with freedom from forced labour and freedom of association. Activities: This criterion is important for activities that require lit- D.6.1 Forced labour27 tle education and skill, such as agriculture, mining and ASN Bank excludes companies that use forced labour industry (factory work), and for activities in countries either directly or through their suppliers. Forced labour where child labour is prevalent.26 is work that is performed involuntarily, under threat of punishment. At companies, this mainly involves com- Absolute criteria: pulsory overtime, human trafficking, debt bondage and The following criterion applies to the analysis catego- bonded labour. ries ‘avoid’ and ‘further analysis’: → The company’s policy states that it does not and will Involuntary overtime entails that a company locks up an not use child labour according to the ILO definition. employee in the workplace or threatens to withhold his The following criteria apply to all analysis categories pay, to use physical force or to fire him if the employee (‘avoid’, ‘further analysis’ and ‘normal assessment’): refuses to work the overtime as instructed.28 → There are no instances of child labour at the com- pany itself or at its suppliers. We exclude companies if they or their suppliers use → If an occasional incident occurs, the company im- forced labour. That is why we have formulated absolute mediately takes adequate measures. criteria only. D.6 Employees Activities: Employees’ rights are regulated in many ILO conven- There is an increased risk of forced labour if a com- tions and recommendations. We therefore base the pany or supplier hires staff (including temporary staff) 26 The US Department of Labor has compiled a list of countries and product groups where child labour and forced labour are prevalent. Although there is some discussion about the way the list was created, it is a relevant indicator of the likelihood that child labour exists in a particular case ( and http://www.dol. gov/ILAB/programs/ocft/tvpra.htm). 27 ILO Convention No. 105 concerning the Abolition of Forced Labour (1957) and ILO Convention No. 29 concerning Forced or Compulsory Labour (1930). Also based on: UDHR (Article 4); Covenant on Civil and Political Rights (Article 8); the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families (1990); UN Global Compact (Principle 4); GRI (Performance Indicator: HR7); OECD Guidelines (Guideline V.1.d). 28 There are also other forms of forced labour. For example, withholding documents such as an identity card or passport may be used to retain migrant workers in particular. This is not permitted. The company must be particularly alert if it hires flexible staff through intermediaries such as staffing agencies. ASN Bank Issuepaper Human rights November 2011
  • 17. through intermediaries from countries where human Sexual exploitation 17trafficking is prevalent, possibly in combination withdebt bondage. Forms of slavery exist in South Asia, The term ‘sexual exploitation’ is not defined by interna-Latin America and many African countries, while in tional law.31 This is due in part to the variety of views on sexEurope human trafficking is very common. The US De- and sexuality and on what is permissible. For example, thepartment of Labor has published a list of countries and Dutch prostitution policy is inconceivable in countries suchproduct groups where child labour and forced labour as Sweden, which assumes that prostitution involves sexualare prevalent.29 exploitation by definition.Absolute criteria: In our analysis we define ‘sexual exploitation’ as follows:The following criterion applies to the analysis catego- sexual exploitation exists if sexual acts are performed invol-ries ‘avoid’ and ‘further analysis’: untarily. Involuntariness exists in the event of, for example,→ The company states in its policy that it does not and force, intimidation, deception, abuse of a dominant posi- will not use forced labour. tion or direct or indirect punishment. This often occurs inThe following criteria apply to all analysis categories combination with human trafficking and/or (debt) bondage.(‘avoid’, ‘further analysis’ and ‘normal assessment’): Sexual exploitation can occur in many different forms.→ There are no instances of forced labour at the com- pany or its suppliers. As the sex industry presents an increased risk of sexual ex-→ If an occasional incident occurs, the company im ploitation, ASN Bank does not invest in: mediately takes adequate measures. - prostitution or companies benefiting from prostitution; - pornography production.D.6.2 Healthy and safe working conditions30ASN Bank only invests in companies that offer safeand healthy working conditions and are not involvedin any way in sexual exploitation or the production of lation. The measures that a company must take dependpornography. on its activities and location. Companies must take additional measures for vulnerable employees, such asIn order to create safe and healthy working conditions, occupationally disabled people and pregnant womencompanies take all measures necessary to protect em- who, for example, work with substances that may harmployees (including flexible staff) against work-related the unborn child.risks and foreseeable dangers in the workplace. For ex-ample: protection against exposure to toxic substances A safe and healthy working environment also meansand radiation, protective clothing, training in the use that companies protect their employees againstof dangerous, heavy machinery, and an emergency plan harassment, violence and threats in the workplace of afor calamities and accidents. This also includes health physical, sexual or psychological nature, and that they& safety policy such as protective measures for people counter such conduct.who perform heavy physical work, and facilities such asa clean toilet, clean drinking water and adequate venti-29 and Based on: right to health (UDHR Article 25 and International Covenant on Economic, Social and Cultural Rights Article 7); ILO Convention No. 155 concerning Occupational Safety and Health (1981); ILO Convention No. 120 concerning Hygiene (1964) and a range of specialised ILO Conventions, including Nos. 115 (radiation protection), 119 (guarding of machinery), 127 (maximum weight), 136 (benzene), 139 (occupational cancer), 148 (working environment - air pollution, noise and vibration), 162 (asbestos), 167 (safety and health in construction), 170 (chemicals), 174 (prevention of major industrial accidents), 176 (safety and health in mines); GRI (Performance Indicators LA6 up to and including LA9); OECD Guidelines (Guideline V.4.c).31 However, there are relevant international standards for children and women: the International Convention on the Rights of the Child (Article 34) and the UN Women’s Rights Convention offer children and women protection against (sexual) exploita- tion.
  • 18. 18 We exclude companies that do not offer safe and Companies must take healthy working conditions. This has been laid down in the absolute criteria. Because we like to see compa- additional measures for nies go the extra mile – in a positive sense – as regards healthy and safe working conditions, we have also vulnerable employees included a relative criterion. Activities: employees and their families in areas where HIV/ Companies run the greatest health and safety risks if AIDS is prevalent, and general health programmes. they employ heavy physical labour and work with haz- It is important here that the company takes on a ardous substances and radiation. This criterion is also long-term commitment and properly investigates its relevant to countries where violence, intimidation and employees’ needs. In addition, it is recommended sexual harassment in the workplace are prevalent. The that the company seeks to collaborate with experts European Agency for Safety and Health at Work has or specialist organisations and local authorities. specified the risks for the various sectors.32 D.6.3 Living wage33 Absolute criteria: According to the ILO, a living wage is ‘the level of The following criteria apply to all analysis categories wages sufficient to meet the basic living needs of an (‘avoid’, ‘further analysis’ and ‘normal assessment’): average-sized family in a particular economy’. The ILO → There are no instances of serious violations of em- does not define those basic living needs. On the basis ployees’ safety and health conditions at the com- of human rights, the following should in any event be pany or at suppliers. considered basic living needs: sufficient food, clothing, → The company does not tolerate any form of harass- housing, education and healthcare. ment, violence and threats in the workplace of a physical, sexual or psychological nature. In many countries, the (statutory) minimum wage is → The company is not involved in sexual exploitation below a living wage. As a result, many families cannot in any way and is not involved in prostitution and/or meet their basic living needs. This can lead to excessive pornography production. overtime and child labour. We give the company a posi- → If an occasional incident occurs, the company im- tive rating if it offers its employees a living wage.34 mediately takes adequate measures. In any event, it has a complaints procedure. Further, it records the Activities: number of occupational accidents and the measures There is an increased risk in countries with much po- that were taken. verty and/or major wage inequality, as well as in sectors that employ many low-educated and temporary person- Relative criteria: nel, mainly in the supply chain. The following criterion applies to all analysis categories (‘avoid’, ‘further analysis’ and ‘normal assessment’): Absolute criteria: → The company takes additional measures to pro- The following criteria apply to all analysis categories mote the health and safety of its employees. Exam- (‘avoid’, ‘further analysis’ and ‘normal assessment’): ples include setting up an HIV/AIDS programme for → There are no examples of serious malpractices in the 32 33 Based on UDHR (Article 25); International Covenant on Economic, Social and Cultural Rights (Article 7); ILO Conventions Nos. 131 (minimum wage) and 117 (social policy); ILO Tripartite Declaration of Principles concerning Multinational Enterprises (Article 34); OECD Guidelines (Guideline V.4.b). 34 With regard to this the company can contact local or international trade unions and non-governmental organisations. An example in Asia is the Asian Floor Wage Alliance ( ASN Bank Issuepaper Human rights November 2011
  • 19. remuneration of employees and temporary person- Violations of trade union rights 19 nel, both at the company and at suppliers.→ If an occasional incident occurs, the company im- The following violations of trade union rights occur mediately takes adequate measures. frequently:Relative criteria - Protection contracts and ghost unions. These areThe following criterion applies to all analysis categories contracts and unions chosen by the employer, not by the(‘avoid’, ‘further analysis’ and ‘normal assessment’): employees.36→ The company’s basic principle is a ‘living wage’, - Trade unions controlled by the state, for example in with the company verifying to what extent its em- China. ployees can actually live on their wages. - Exclusion clauses providing that companies may not employ workers who are not a member of the chosenD.6.4 Trade unions/freedom of association 35 union.Freedom of association is one of the fundamental rights - The employer prefers one trade union over another.of employees. This right is laid down in international - Employees do not have access to information about tradeand national laws and regulations. Freedom of asso- union registration and to collective bargaining agree-ciation includes employees’ right to organise and to ments.establish trade unions, and their right to collective bar- - Anti-union discrimination exposing employees to intimi-gaining on employment conditions. In many countries, dation and threats.freedom of association is not self-evident. - Circulation of black lists of employees who are activeThe freedom of association and the right to free bar- trade union members.gaining are of a fundamental nature. We therefore ex-pect companies to pursue social policies that are based Fundamental trade union workers’ rights are most vulner-on the internationally endorsed employment standards able in risk countries and high-risk countries. The followinglaid down in the ILO Conventions. highly serious violations occur in such countries: - Murder of trade union workers.We expect companies operating in countries where - Trade union members are imprisoned and their demon-trade union rights are not safeguarded to take specific strations are broken up; security troops or others torturesteps to ensure that employees can exercise their right them and they often receive long prison association and collective bargaining. This applies - Employees are dismissed for trying to set up a tradeto their own employees and those in their supply chain. union.We expect companies not to constrain employees’rights but to enable them to exercise those rights.Activities:In risk and high-risk countries, the fundamental work-ers’ rights of trade union members are the most vulner-able. Yet there are certain countries that we designateas low-risk countries that have ratified none or only oneof the relevant ILO Conventions. Here there is a greaterrisk of trade union rights not being respected.3735 Based on: UDHR (Article 23); Covenant on Civil and Political Rights (Article 22); ILO Conventions Nos. 87 (freedom of associa- tion and protection of the right to organise) and 98 (right to organise and collective bargaining); UN Global Compact (Princi- ple 3); GRI (Performance Indicator HR 5); OECD Guidelines (Guidelines V.1.a&b).36 In Mexico, for example, many companies have so-called ghost unions – paper unions that do not represent the employees – and trade unions that are controlled entirely by the company (source: FNV Mondiaal).37 For example in the United States, where many violations of trade union rights occur. The most recent ratifications of the Conventions are available on the ILO website:
  • 20. 20 Absolute criteria: strict requirements.39 Similarly, governments may only The following criteria apply to the analysis categories infringe on people’s privacy under strict conditions.40 ‘avoid’ and ‘further analysis’: Even in these cases, we expect the company to carefully → The company has laid down in its policy that it re- weigh the infringement of privacy or freedom of speech spects trade union rights, preferably as defined by versus the goal that it serves.41 If national and interna- the ILO. tional laws differ, we expect the company to adhere → The company creates a structure safeguarding em- to the standard that provides the best protection for ployees’ rights to association and to collective individuals or the group of people that are or may be bargaining, for example by means of employee affected. consultations. → We expect companies with suppliers in risk coun- tries and countries with little freedom of associa- We expect companies in our tion to draw up a supply chain policy. The following criteria apply to all analysis categories investment universe to treat (‘avoid’, ‘further analysis’ and ‘normal assessment’): → There are no instances of serious malpractices with employees’ and customers’ regard to trade unions/ freedom of association in relation to employees and temporary staff at the privacy with respect and company or at suppliers. → If an occasional incident occurs, the company im- to observe due care when mediately takes adequate measures. handling the information D.7 Privacy and freedom of speech 38 We expect companies in our investment universe to and personal data in their treat employees’ and customers’ privacy with respect and to observe due care when handling the informa- posession tion and personal data in their possession. We expect them to respect the freedom of speech of employees, customers and others. It is sometimes possible to limit In addition, we expect companies to refrain from the right to freedom of speech, but only to protect the actively cooperating in censorship (restricted access rights of others or ‘for the common good’: national to information) by the government. This is particularly security, public order and safety, public health or the case in countries with widespread censorship. We good morals. Moreover, such limitations are subject to expect companies to be aware of these risks and to try 38 Based on: freedom of speech (UDHR: Article 19; and International Covenant on Civil and Political Rights: Article 19) and right to privacy (International Covenant on Civil and Political Rights: Article 17). 39 They must be provided for by law, serve a legitimate purpose, be necessary and be proportionate to the goal. 40 The following conditions are often mentioned: 1) There must a statutory basis. 2) There must be a clear interest for the safety of the entire population. 3) Individuals must have optimum access to data collected by the government. 4) Data may only be made available to those who have a direct statutory interest in that; once that interest no longer exists, the data must be destroyed. 5) Individuals have the right to demand from the government an explanation of the reasons and ways in which the government has violated their privacy ( 41 This is not always easy. For example, in the event of a request from the government, a company must make a distinction between legitimate requests (e.g. the fight against terrorism, screening against child pornography images) and illegitimate requests (e.g. for political purposes). Even with legitimate requests, there may be a conflict between individual rights and the common good. It is also possible that the company must weigh the company’s interest (such as price-sensitive information) and the per- sonal right to freedom of speech (the right to make certain information public). This is a weighing of legitimate and illegitimate restrictions. For example, the ‘company’s interest’ may not be invoked to prevent employees from exposing malpractices. ASN Bank Issuepaper Human rights November 2011
  • 21. to avoid them, preferably by means of supplementary Relative criteria: 21policy. The following criteria apply to all analysis categories (‘avoid’, ‘further analysis’ and ‘normal assessment’):Activities: → The company has laid down in its policy that it re-An increased risk exists for companies that have spects the privacy of its employees, customers andpersonal data or can easily obtain access to such data. any other stakeholders.These include companies in the telecommunications, IT → The company has laid down in its policy that itand software sectors, and companies such as laborato- respects the freedom of speech and that it does notries, insurers and banks that have medical information cooperate with censorship.and other personal data. → The company has a system or a point of contactMedia (television, newspapers, internet, etc.), IT and where employees or other stakeholders can reportsoftware companies are key in the access to informa- malpractices anonymously.tion and the freedom of speech. Conversely, they run → The company has programmes to promote and/oran increased risk of censorship, government restrictions encourage the local community’s access to informa-regarding the access to information, and infringements tion and/or the Internet.on the freedom of speech. D.8 (Local) rule of law42 We expect companies in our investment universe toIn addition, we expect be respectful towards the society in which they, their subsidiaries and their suppliers operate. This meanscompanies to refrain from that they show respect for the local rule of law and do not violate national laws, for example. Also, they mustactively cooperating in not engage in transactions and activities that, in our view, abuse the lack of proper tax legislation and its en-censorship (restricted access to forcement. This applies particularly to poorer countries where governments have insufficient funds, knowledgeinformation) by the government and capacity to combat abuse. We do not lend our assistance to such activities, in whatever country, and recommend customers to do the same. We also expectAbsolute criteria: companies to not engage in corruption. If national lawsThe following criteria apply to all three analysis cat- or customs conflict with international standards in thisegories (‘avoid’, ‘further analysis’ and ‘normal assess- regard, we expect companies to adhere to the highestment’): standard.→ The company respects the privacy of its employees, customers and any other stakeholders. There are no serious or structural controversies with regard to We also expect companies privacy.→ The company does not actively cooperate in censor- to not engage in corruption ship and respects the freedom of speech of employ- ees, customers and others. There are no serious or structural controversies in the area of freedom of Activities: speech or in terms of censorship. (Large) financial transactions, large infrastructure→ If an occasional incident occurs, the company im- projects, global companies that receive much work mediately takes adequate measures. from public authorities.42 Based on: UN Convention against Corruption (2003); the OECD Guidelines (Guidelines I.2; II.6; III; VII; X; XI); UN Global Com- pact (Principle 10); GRI (Performance Indicators SO1 up to and including SO8). All these areas are also often strongly regu- lated in laws and regulations at the international, European and national levels.
  • 22. 22 Absolute criteria: → The company is transparent about the monies it The following criteria apply to all analysis categories pays to public authorities. (‘avoid’, ‘further analysis’ and ‘normal assessment’): → The company respects the local rule of law. There are no reports of the company consistently violating D.9 Local community and indigenous people43 local laws or being involved in fraud or corruption. Companies can have a major – positive and negative – → The company adheres to its own and/or sector- impact on local communities and indigenous people. specific codes of conduct. There are no reports of In serious cases, their activities can have a devastating the company consistently violating these. effect on health or living conditions, or increase po- → The company also does not encourage others to verty, for example because they acquire land, use violate local laws and its own and/or sector-specific water, dump waste and emit (hazardous) fumes. To the codes of conduct. extent that companies’ impact on their surroundings → If national laws or customs conflict with internatio- concerns climate change and biodiversity, we refer to nal standards, the company adheres to the highest the ASN Bank Climate Change and Biodiversity Issue standard. Papers. In this Issue Paper, we only discuss the impact → As far as is known, the company does not lobby for on human beings. activities that violate our human rights criteria. → If an occasional incident occurs, the company im- Respect for local society concerns the impact of busi- mediately takes adequate measures. ness operations on a branch’s immediate surroundings, as well as on other locations and future operations. It also includes the use of local (indigenous) knowledge, Respect for local society for example. concerns the impact of We expect companies to treat local communities and indigenous people with respect and to not exploit business operations on a them. For example, when acquiring land, companies must ensure that the local population is not simply branch’s immediate removed from the land. If people are to be expelled, it must be done with respect for the people in accordance surroundings, as well as with the aforementioned international standards.44 Based on customary law, indigenous peoples can claim on other locations and land rights even if they do not have any statutory prop- erty rights recognised by the state. future operations Companies can also positively contribute to local com- munities and indigenous people, for example by giving Relative criteria: the population access to clean water or enabling it to The following criterion applies to all analysis categories participate in HIV/AIDS programmes. It is important for (‘avoid’, ‘further analysis’ and ‘normal assessment’): the company to ensure that such facilities will continue 43 Based on Article 17 UDHR concerning property rights, and Article 25 UDHR concerning the standard of living (including living environment); the UN Declaration on the Rights of Indigenous Peoples (2007); IFC Standard 5: Land Acquisition and Involun- tary Resettlement (suggestions for land acquisition and possible resettlement of the indigenous population); ILO Convention 169 (indigenous and tribal peoples); GRI (Performance Indicator HR9). 44 As above. And regarding indigenous peoples: Article 10 of the UN Declaration on the Rights of Indigenous Peoples concern- ing the principle of free prior informed consent. Indigenous peoples may not be forcefully removed from their lands or ter- ritories. Resettlement may not take place without the free prior informed consent of the indigenous peoples involved and only after just and fair compensation has been agreed and, if possible, they are offered the possibility to return. ASN Bank Issuepaper Human rights November 2011
  • 23. We expect companies to → The company respects indigenous peoples’ intellec- 23 tual property of artistic expressions or knowledgetreat local communities and of medicinal plants. No serious malpractices are known on this point.indigenous people with → If an occasional incident occurs, the company imme- diately takes adequate measures.respect and to not exploit Relative criteria:them The following criterion applies to all analysis categories (‘avoid’, ‘further analysis’ and ‘normal assessment’): → The company makes a positive contribution to theto exist if it ceases its operations. Also, it must confer local community and indigenous people, in consul-with the local authorities and community to determine tation and in collaboration with the local authoritiestheir needs and should work with them in setting up and community.those facilities.Activiteiten: The company makes aIncreased risk in countries where indigenous peopleslive, as well as with major infrastructure projects and positive contribution tomajor projects for generating renewable energy.Activities requiring a lot of (new) land or water, such as the local community andagriculture. Risk sectors: building companies and en-gineering firms, transportation, sectors whose supply indigenous peoplechain includes mining and agriculture, the pharmaceuti-cal industry (with regard to medicinal knowledge of theindigenous people), soft drinks and beer manufacturers D.10 Consumers45(water consumption). Companies are responsible towards the end users of their products and services: consumers or customers.Absolute criteria: This mainly concerns consumers’ safety and health46 butThe following criteria apply to all analysis categories also includes providing information about the products(‘avoid’, ‘further analysis’ and ‘normal assessment’): and their responsible use, especially if a product can→ The company respects the local community and harm people’s health, such as alcohol and medicines. treats the indigenous people with respect. No Companies must tailor this information to their specific serious malpractices are known on this point. target groups, for example elderly people or children.→ There are no reports of serious malpractices affect It may also include marketing and advertising cam- ing the local community as a result of water con- paigns47. sumption or the emission of fumes and waste pro- ducts by the company. This mainly concerns access to safe drinking water and food and the popula- tion’s health.45 Based on the OECD Guidelines (Guideline VIII); GRI (Performance Indicators of Product Responsibility PR1 up to and including PR9 and FS16); UN Guidelines for Consumer Protection. Consumer protection and product safety are strongly regulated in laws and regulations at the international and European levels and in low-risk countries at the national level.46 One example in the pharmaceutical industry is the availability of good medicines in economically less developed countries. We base our analysis on the Access to Medicine Index, among other things.47 The EU sets clear rules for many products in this respect. In the Netherlands, this is monitored by the Netherlands Food and Consumer Product Safety Authority ( and the Dutch Advertising Code Authority (http://www.reclame
  • 24. 24 Gambling48 E Selection criteria for government bonds We define gambling mainly as short-odds games. In this type Guiding principle for countries of game, bets and gains or losses follow each other in quick ASN Bank invests in countries through government succession. Examples include fruit machines, casino games, bonds. We only invest in the government bonds of coun- bingo, scratch cards and horse betting. In our definition, tries that respect, protect and promote the Universal gambling does not include the long-odds games such as lot- Declaration of Human Rights. These are countries that teries and competitions, with long periods between bets score well on internationally recognised human rights and gains or losses. As these hardly involve any real excite- indices. We assess countries on their policies and results ment, they are not considered very risky. With short-odds in the field of human rights. We examine their perform- games, however, there is a strong inducement to wager a ance in areas such as child labour, trade unions/freedom bet time and again. The nature of the award structure makes of association, forced labour, discrimination, corruption these games risky: the player does not win anything for a and income distribution. We also assess their perform- long time, sometimes wins a small amount and very rarely ance in respect of climate change and biodiversity. wins a large sum of money. This paves the way to a gambling We base our opinion on measurements by renowned addiction. (research) agencies.50 Only countries that perform bet- ter than average are eligible for investment in govern- ment bonds. These countries are listed on our website. Activities: We discuss the selection of countries in more detail in Mainly the production and sale of consumer goods. the ASN Bank Issue Paper on Government Bonds. This This primarily involves sectors that supply consumer document outlines the human rights criteria we use in products like food, electronics, medicines, cosmetics that selection. and cleaning products. We exclude countries if they are responsible for gross Absolute criteria: human rights abuses, or for serious violations of the The following criteria apply to all analysis categories rights included in the Universal Declaration of Human (‘avoid’, ‘further analysis’ and ‘normal assessment’): Rights and the international human rights standards → The company does not manufacture tobacco pro- derived from it. ducts or derive the greater part of its total turn- over from the sale, distribution or trade of these Countries where gross human rights abuses occur are products. often also condemned by the UN Security Council or → The company does not produce and/or operate any the UN Human Rights Council, or human rights-based short-odds games. In this category, we also include EU sanctions have been imposed on them. This group companies that develop and produce short-odds often includes weak governance zones, countries in games or operate casinos.49 which the government is unable or unwilling to assume → There are no reports of any serious malpractices its responsibilities.51 caused by the company’s products in respect of consumer safety or health. → The company provides honest and clear information We assess countries on their about its products and any associated risks. No seri- ous malpractices are known in this regard. policies and results in the → If an occasional incident occurs, the company im- mediately takes adequate measures. field of human rights 48 Source: Stichting AGOG ( 49 See the box entitled ‘Gambling’ for a definition. 50 Examples include the Transparency International country lists regarding corruption and UNDP’s Human Development Index. 51 Definitions according to the OECD. ASN Bank Issuepaper Human rights November 2011
  • 25. Absolute criteria: a war crime if it occurs in times of war and contravenes the 25We exclude countries where the following serious Geneva Convention. We also consider this to include theviolations of international law occur or where there is a use of child soldiers.major risk of: torture; genocide; crimes against humanity; F ASN Bank’s other activities war crimes. ASN Bank’s human rights policy applies not only to ourRelative criteria: investments, but also to our own business operations.The country respects, protects and promotes the Uni- We apply the assessment categories described in Sec-versal Declaration of Human Rights. It is one of the bet- tion B to ourselves. This indicates that we, as a Dutchter performing countries on internationally recognised bank with a Dutch customer base, fall within the ‘nor-human rights indices.52 mal assessment’ category. We respect local laws and regulations and avoid controversies in respect of human rights. We report on these issues every year in our an- Gross human rights abuses nual report and to various (international) organisations such as the UN Global Compact and GRI. We also like A gross human rights abuse means that standards are contra- to take it a step further. In that effort we focus on the vened which may not be contravened in any circumstance, following areas: not even in a situation of war or an emergency. We thus do customers; not use the terms ‘on a large scale’ or ‘consistently’. After staff; all, violations in this category of human rights are always a suppliers; ‘gross abuse’ of human rights. Such abuses always result in social environment. immediate exclusion.53 Such crimes include the following: This policy applies also to Torture. Genocide. our own business operations Crimes against humanity. These include acts committed as part of a widespread or systematic attack on civilians, such as homicide, extermi- Customers nation, slavery, human trafficking, deportation or invol- We owe our existence to our customers and to our untary transport of people, death sentence, imprison- sustainability mission. We therefore greatly value ment and other serious deprivation of physical freedom in customers’ opinions. We try to be easily accessible to violation of fundamental rules of international law. them and as transparent as possible. We view customer War crimes. satisfaction as an important indicator of the quality of These are torture, mutilation, corporal punishments, ta- our services and survey this regularly. Apart from the king hostages, acts of terrorism, genocide, deportation, statutory customer acceptance requirements, we do ‘violations of human dignity’ (including rape and forced not impose any unnecessary limitations or conditions prostitution), pillaging and summary executions. An act is on our customers (non-discrimination). The design of52 Such as the aforementioned indices, for example the Transparency International country lists regarding corruption and UNDP’s Human Development Index. For more information, please refer to ASN Bank’s Issue Paper on Government Bonds.53 The definition of these standards can be found in instruments such as the UN Convention against Torture and the Rome Statute of the International Criminal Court. To be clear: the Rome Statute enables the prosecution of individuals, not of states. We therefore only use this convention for the description of the definitions. The Rome Statute only applies to some of the crimes if these are committed in the context of an attack aimed at civilians. We use the definitions of the crimes, irrespec- tive of whether there is such an attack.
  • 26. 26 our products is such that they are clear and understand- Social environment able. We have a clear complaints procedure, which can We promote the respect and protection of human be found on our website. rights not only through our investment policy, but also in other ways, such as: Staff By formulating positions – always after careful ASN Bank’s human resources policy is based on that consideration – in discussions on human rights. of SNS REAAL. We fall under SNS REAAL’s Collective By supporting – on behalf of our customers, through Labour Agreement, which offers good primary and sec- the ASN Foundation and as a sponsor – projects that ondary benefits that comply with the market standard. contribute to our four sustainability issues: for fair The SNS REAAL Works Council also represents the ASN trade, against child labour, for renewable energy Bank employees. An employee satisfaction survey is and against the arms industry. All four of these is- conducted every year. We foster ASN staff’s commit- sues relate to human rights. ment to the issue of human rights by means of training Through partnerships with NGOs that share our hu- courses, among other things. man rights vision. By encouraging people to take action and involving Suppliers them in our activities concerning human rights, We assess all suppliers on the basis of our supplier poli- for example through our partners and the website cy. The social or environmental impact of the numerous (‘for the world of to- products we purchase is highly varied, which is why we morrow’), our online platform for people who take have classified all products in terms of three categories: sustainability to heart. high priority, average priority, and low priority. We assess all products in terms of sustainability criteria; which criteria we apply depends on the priority as- signed to the products, as indicated in the table below. Assessment of suppliers Category Comprises Policy A: High priority Products that we purchase in large quantities and We examine these products on that involve a high risk or are easy to produce sus- the basis of our sustainability tainably, such as bank cards criteria B: Average priority Products that have a large purchasing volume but Companies must sign our sustain- without high risks or sustainability problems, such ability declaration. as IT services, postal delivery C: Low priority Products representing small quantities, low cost of Basic assessment purchase or low risks, such as office supplies ASN Bank Issuepaper Human rights November 2011
  • 27. 27