Three reference points for G7 investors to stand up for human rights at their own borders

Human Rights

Rising nationalism and matching politics mean that G7 governments are increasingly ignoring their obligations to protect the rights of refugees, asylum seekers, and other migrants. The world’s largest investors can remind governments and private border security and technology companies what the law expects of them. Why should they? This Border & Surveillance Industries (BSI) Stewardship Project blog offers three entry points from relevant international human rights and refugee law and from frameworks that can underpin investor action.

Institutional investors have so far shown limited willingness to respond to human rights risks and violations linked to portfolio companies. These issues remain primarily the remit of the more ethically minded, or the more courageous. This is bound to change – with rising interest from ESG circles in social issues and the legitimacy and social license of financial markets under scrutiny given their failure to consider negative externalities on society. For investors in G7 economies, the Border and Surveillance Industry raises critical issues, and should invite scrutiny.

Indeed, experts expect global migration to expand significantly as climate change impacts ramp up. By 2050, the UN expects around 1 billion people to migrate in response to climate change impacts. The influence of private companies that provide border control, migrant detention, and surveillance services, will increase consequently. For their banks and investors, the reputational and legal risks of ignoring human rights violations on the border context are significant and are poised to grow.

Migration presents economic benefits and investing in the Border and Surveillance Industry presents legal and reputational risks.

Migration plays an essential role in fueling economic growth, particularly in aging societies reliant on immigrant labor inputs. Mckinsey estimates that migrants contributed roughly $6.7 trillion, or 9.4 percent, to global GDP in 2015, and that figure has only grown.

Meanwhile, EU governments’ use of private firms to push back and detain migrants in third countries, the UK’s ongoing attempts to confirm third country partners for migrant internment and removal, Canada’s continued programme of  indefinite detention of migrants, and US imprisonment of migrant children all. rely on private companies. This comes with risks. For example, investors should consider the firms who detain migrants in offshore facilities in Australia, where complaints of abuse against migrants are well documented, or investment in companies with records of enabling migrant abuse in detention. In the US, the DHS Office of Inspector General indicated that the office received some 33,000 complaints between 2010 and 2016 alleging a wide range of abuses, including sexual abuse of women and children detained in immigration control facilities. Detainees are kept in hundreds of CE facilities, with 70% of detained migrants held in facilities run by private contractors. Our recent Discussion Note elaborates on the legal and reputational risks and the response they invite.

1) The PRI framework could be put to good use (if investors care to)

Where to begin? The Principles for Responsible Investment provide a simple, three-part framework for consideration of human rights in the investment process: (1) policy commitment; (2) due diligence processes; and (3) enabling or providing access to remedy. Investors can apply this framework to the BSI. For example, failure by companies implicated in migrant abuse to provide access to remedy should provide a strong signal to investors that those companies are not doing a good enough job. Investors can also use the framework to identify BSI companies with the worst human rights records for engagement and exclusion if warranted.

2) The UN Guiding Principles on Business and Human Rights (UNGPs), a reference (and a question mark)

The UN Guiding Principles on Business and Human Rights (UNGPs) are the go-to tool on private sector obligations towards human rights. The UN Working Group on Business and Human Rights recently (2018) requested investors to implement more systematic approaches to human rights due diligence at investee companies under the UNGPs. Several organizations have supported efforts to implement these recommendations, including the Investor Alliance for Human Rights, the PRI, the World Benchmarking Alliance, the B-Tech and Valuing Respect project. While investor take-up remains slow, they can and should apply it in the context of the BSI.

3) The basis in International human rights law

Then there is a higher level legal context for corporate and investor action with the BSI: the 1951 Refugee Convention, which is the primary international legal instrument dealing with the status and rights of refugees. The Convention has 149 state parties; it has received sporadic support from business stakeholders (although they are largely bound by it). When a state accedes to the 1951 Convention, it commits to treating refugees in accordance with internationally recognized legal and humanitarian standards, which includes a commitment to providing all refugees a possibility to find safety. According to the UN, granting asylum is a peaceful, humanitarian, and legal act rather than a hostile gesture, and should be understood by the refugee’s country of origin as such. The process of accepting refugees demonstrates a country’s willingness to share responsibility for their protection.

In the past, the Convention’s acceptance as a foundational element of international human rights law helped UNHCR to mobilize international support for the protection of refugees. By 1952, in the aftermath of the Second World War, for example, the US officially welcomed around 400,000 Russian and European refugees, alongside a much larger number of immigrants from the continent. Following the Vietnam War, the US also welcomed around 600,000 refugees from Laos, Cambodia, and Vietnam. More recently UN General Assembly’s 2018  adoption of the Global Compact for Safe, Orderly & Regular Migration reinforced the importance of migrant rights.

Investors should also be aware of the principle of non-refoulement, which prohibits the return of a refugee to a territory where their life or freedom is under threat. The principle of non-refoulement is considered a rule of customary international law and is binding on all states, regardless of whether they have acceded to the 1951 Convention. Authorities may not prevent refugees seeking protection from entering a country as this would amount to refoulement. What about their contractors?

Flexing the engagement muscle & speaking up for the most basic human rights

All investors who have committed to support the SDGs should be ready to take a public position on the need for both private firms and the governments they serve to respect the rights of all migrants. All investors who look at ESG as a risk framework should take a much closer look at the BSI. Our project  will identify opportunities for investors to speak up with companies and governments. Alongside engagement with listed and private companies, investors can also encourage G7 governments to revisit their approach to contracting, support migrant rights, acknowledge immigrants’ contribution to healthy labor markets, and the need for governments to fulfill existing obligations under international law.

In March 2022, Preventable Surprises will host an online investor dialogue on engagement strategies to address human rights risks in the Border & Surveillance Industries. You can register your interest here.


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