Case Study on Principle # 2 - Human Rights
To make sure the company is not complicit in human rights abuses

Name of Company: British Petroleum (BP) (Ref.1)
Background & situational context
BP is the third-largest integrated oil company in the world, with an estimated global market share of 3% of oil & gas production, 4% of refining capacity and over 10% retail sales of refined oil products in global retail markets. It is also one of the world's three largest manufacturers of petrochemicals and has a growing business in distribution of natural gas and power generation. More than two-thirds of BP's production, refining and marketing is in the USA, Canada, Western Europe and Australasia. Worldwide the company employs more then 115 thousand people.

Problem
It is increasingly difficult for oil companies to find significant oil reserves in western democracies. In order to maintain future prospects and satisfy increasing demand in countries all over the world, oil companies therefore increasingly have to do business in areas of the world where democracies are not well-established and fundamental human rights not well protected.

Many people believe that it is often much easier for companies to avoid becoming embroiled in human rights controversies than to deal with the related practical and reputational risks. But can companies proactively plan to avoid the potential pitfalls? Moreover, many companies commit themselves to respecting the rule of law in countries of operation. But what about situations where national laws contravene basic human rights or where to uphold the letter of the law could result in human rights infringements? One such example is the apartheid laws of the old South Africa, which required racial segregation of the workforce.

�Open markets, steady economic development and an open society are the best conditions in which we can pursue our business. This is contrary to the common believe that companies find it easier to the apparent stability of repressive regimes than to manage the uncertainties of democracy. Stability built on repression is always false. Sooner or later the waters break the dam.�
Sir John Browne, CEO, BP

Actions taken
In early 1998, following extensive internal discussions, BP adopted a set of business policies describing the standard of care the company seeks to deliver. At the core of these of these policy commitments is the belief that the companies activities should generate a source of economic benefits and opportunities and that their conduct should be a source of positive influence.

BP Ethical Conduct Policy now explicitly supports the principles set forth in the UN Universal Declaration on Human Rights and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. In addition, its relationships policy commits the company to demonstrating respect for human dignity and the rights of the individuals.

The issue of complicity in human rights abuses is not easy for companies to tackle. BP, as part of their commitment to following their Ethical Conduct Policy, used a number of approaches, including research, education, prevention and partnerships. For example, before investing in new projects, the company now conducts a country risk review. Amongst other factors, this process takes into consideration the social, political, cultural and human rights context of the country using a 20-year planning horizon. Market and shareholder risks are also important factors in the process, as are potential reputational risks. This process involves a select number of internal staff from business units and the corporate centre, as well as external experts. The NGO Human Rights Watch was invited to participate in a country risk review for a country where human rights abuses where of particular concern.

BP�s Ethical Conduct policy is supported by more detailed policy explanations, to assist staff in resolving the dilemmas surrounding ethical decision-making. In addition, more detailed guidance on specific aspects of human rights is available on the company�s Intranet. This includes a decision making model to help clarify issues �such as bribery and corruption- and the potential consequences and pitfalls.

While some of the training on human rights related issues has been given to staff in the form of workshops, BP also uses a more innovative approach through the peer review process. Originally conceived as a technical review mechanism, the peer review process has been applied to the company�s dealings with indigenous peoples and to security provisions. It brings together centres of expertise on specific subjects within the group to review and challenge the performance of one of the business units.

Results
As the company readily admits, measuring progress on policy implementation is no easy task. At the time of this case study, the company was supporting research into social indicators to help reinforce reporting on social performance, including human rights. This process is viewed as crucial by a number of NGO�s if progress on the implementation of the Ethical Conduct policy is to stand up to objective evaluation.

Meanwhile, BP has introduced an annual review process where each business leader must sign a letter indicating that all relevant staff have been made aware of the Ethical Conduct policy provisions, that they have an understanding of the human rights context of their operations and the operations are not resulting in human rights abuses.

More proactively, they must also look for opportunities to promote human rights within the country of operation.
BP is also continuing its training of employees through the Intranet and workshops.
In 2002 alone, over 500 workshops were held on human rights related issues.

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Ref. 1 With special thanks to the Prince of Wales Business Leaders Forum and Amnesty International, excerpts for this case study taken from their publication: �Human Rights, Is It Any Of Your Business?� by Peter Frankental and Frances House, 2000

UN Global Compact Resource Package