Swedish multinational enterprises with ties to the platinum industry in South Africa fail to adhere to international standards for identifying adverse human rights risks and disclosing information on how these risks are being addressed, according to a report released last month by Swedwatch, a nonprofit organisation (NPO) that reports on Swedish business relations in developing countries.

The report, titled ‘Problematic Platinum – The Responsibility of Swedish Companies in South Africa’, was released to communities within the Bojanala Platinum district municipality, in Rustenburg, by local NPO The Bench Marks Foundation, which consulted and facilitated the field research for the report.
The report, which was researched between February and September 2013, was backed by the Church of Sweden and the Africa Groups of Sweden, which also participated in developing recommendations.

The report is a study of automotive manufac- turers Scania and Volvo, which use platinum in their products, and industrial company Atlas Copco and high-technology tooling, materials technology, mining and construction engineering group Sandvik, which supply mining equipment to mining companies. Their responsibility, according to the United Nations’ (UNs’) Guiding Principles on Business and Human Rights of 2011, is to respect and disclose risks in human rights in their entire value chain, whether or not these concern suppliers or customers.

The UN Guiding Principles on Business and Human Rights of 2011 have been incorporated into a series of international frameworks and standards, among them ISO 26000 – a standard for corporate social responsibility – the Organisation for Economic Cooperation and Development’s Guidelines for Multinational Enterprises, and portions of the International Finance Corporation’s Performance Standards on Environmental and Social Responsibility.

According to the Guiding Principles, human rights due diligence is an ongoing process that a company should conduct.

A company should implement human rights due diligence to identify, prevent, mitigate and account for how it addresses adverse human rights impacts. The process should include an assessment of actual and potential impacts on human rights, incorporate learning by acting on these observations, follow up on measures taken and communicate which measures have been taken.

The point of departure for the report was a case study of the three largest platinum mining companies in South Africa – Lonmin, Anglo American Platinum and Impala Platinum – and the extent to which they can be held accountable for possible adverse impacts, including the types of measures they could take to contribute to better conditions.

The

case study indicates that there is widespread dissatisfaction among the local communities in the Bojanala district municipal- ity, in the North West province, where people, to a large extent, believe that the mining companies impact on their lives in an adverse way.

Several of the problems identified in the report, including a lack of adequate housing, employment and clean water, are said to be the result of a lack of capacity by government, including dysfunctional legislation.

It was highlighted that the traditional councils also play an important role in that they have a responsibility for local communities living in their jurisdiction.

The report also showed that companies fail to communicate their risk management externally, citing commercial confidentiality as the reason not to do so. According to the report, the companies should be communicating due diligence and the risk management strategies in a way that enables stakeholders, especially those affected by the business’s operations, to evaluate whether or not all these risks have been handled correctly.

The report also remarks that while the govern-ment has a duty to protect human rights, companies have a responsibility, regardless of their position, to respect human rights and to be transparent in communicating this.

Implementation

Recommendations to the companies in the report include the implementation of the UN Guiding Principles on Business and Human Rights of 2011 in their sustainability efforts. The companies were advised to conduct ongoing human rights due diligence to identify, mitigate and prioritise the most severe risks to human rights in the entire supply chain and to communicate the findings externally to stakeholders in a verifiable and understandable way.

The report also points out that the South African government has the ultimate respon-sibility for the protection of human rights and for ensuring that the human rights of all people are respected, in particular, the right to adequate housing, water and sanitation.

However, the report also suggested that more stringent requirements should be imposed on mining companies through regulations and other measures to ensure they take responsibility for the impact of their operations on local communities.