By: Sylvia Kithinji

Human Rights: A Strategic Business Issue for Companies operating in Kenya

The concept of corporate responsibility for human rights has gained tremendous traction over the last decade following the adoption of the UN Guiding Principles on Business and Human Rights (“UNGPs). These principles have triggered policy and regulatory changes in several countries across the world leading to heightened obligations by companies for human rights impacts.

Business and Human Rights Developments in Kenya

Kenya has been at the forefront of responding to this global paradigm shift and was the first African country to domesticate the UNGPs through its National Action Plan on Business and Human Rights (“NAP”). The NAP creates the possibility of an unprecedented regulatory landscape in Kenya that introduces human rights a key strategic, risk and compliance issue for businesses operating in the country. Some of the noteworthy proposals of the NAP include; the introduction of human rights due diligence as a prerequisite for business approvals/permits; human rights reporting and disclosures within the realm of corporate law and corporate governance mechanisms; and requirements for human rights policy formulation by companies.

While the regulatory environment in Kenya already factors in fragments of human rights considerations (such as environmental and social impact assessments, labor rights and consumer protection measures among others), the NAP will introduce a more focused human rights approach to policy and regulation that shall elevate human rights within the corporate agenda in Kenya.

The changing face of International Human Rights Law and Global Trends

Besides the Kenya NAP process, developments in international law make it vital for companies to pay closer attention to human rights. The United Nations Human Rights Council-mandated an open-ended intergovernmental working group to develop an international treaty on the issue of business and human rights. Depending on the outcome of this treaty process and should it eventually be signed and ratified by Kenya, it will solidify the position of human rights in Kenya’s corporate landscape by potentially;

>introducing legal liability (both civil and criminal) for human rights transgressions by companies;

>enhancing the prominence of human rights over international economic obligations on trade and investment; and

>creating minimum prudential activities by companies such as human rights due diligence that shall enable companies to meet their obligations.

In addition, there has been a global proliferation of standards and requirements that have led to enhanced corporate accountability. For example, jurisdictions like the UK now have mandatory requirements for quoted companies to include human rights issues in their strategic reports. In Kenya, the Code of Corporate Governance Practices for Issuers of Securities to the Public 2015, has almost similar expectations of listed companies in relation to environmental and social performance although the Code is non-binding in nature and does not expressly refer to human rights. That said, it is likely that such requirements will gradually transform into mandatory legal obligations that apply to all forms of business enterprises.

At the same time, enhanced scrutiny of corporate actions by key business stakeholders including regulators, consumers, non-profit organizations and institutional investors coupled with the world’s connectivity made possible technological advancement has accelerated the significance of human rights as an issue that’s central to operating a sustainable business both locally and across borders.

These advances make it essential for companies in Kenya to understand their sphere of influence in relation to human rights, assess the standards which apply to them and ensure that they obtain expert support to manage the potential negative impact and guarantee compliance with local law and international standards. An ostrich approach towards human rights in today’s complex and globalized business environment may have dire consequences including legal action, reputational damage, financial loss, investor divestment, and consumer flight.

Guidance and Support

We provide guidance to companies to help them understand their legal obligations related to human rights. We support companies to design tailored policies and strategies that enable them to meet their human rights responsibilities. We assist them to develop responsive compliance and risk management strategies that align with their strategic objectives and positively influence human rights outcomes. We also support companies to develop corporate governance frameworks that consider directors’ duties and ensure adherence to any applicable reporting standards.

We can support you to keep abreast of developments in this area and provide tailored advice for your business.

Find out more by contacting Sylvia Kithinji.