Concept note on Women, business and human rights1
Economic governance and corporate activities
Economic governance is generated not only de jure by political decision-making in
economic forums but also de facto by the activities of economic and financial institutions,
enterprises and corporations at the international, transnational and national levels. The
top 200 companies in 2000 surpassed the economies of 182 countries. The private sector
creates and defines jobs, produces growth, sets parameters of income distribution and
affects the social and environmental conditions of the communities in which they
function. Women’s equal access to business leadership and entrepreneurship is essential
both for women’s empowerment and for their ability to affect economic policy making
which determines the quality of life for women and men, their children and communities.
There is a need both to ensure women’s participation in business leadership and to secure
gender responsiveness in corporate activities.
Development of gender equality norms
The formulation of legal and social norms on equality for women specifically addressed
to the context of finance, business and trade is a newly emerging area.
CEDAW is the most comprehensive international tool for tackling discrimination in this
area and its implementation is further enhanced by the Beijing Platform for Action,
CEDAW GR 28 and the MDGs. Thus, for instance, CEDAW Article 3 requires the full
development and advancement of women in social and economic life; 13 requires equal
access to bank loans and credit; Article 14 addresses the right of women to participate in
rural development and development planning, access to agricultural credit and marketing
facilities; and Article 4 provides for temporary special measures to accelerate de facto
equality. The obligation of states to implement these normative standards applies to
corporate governance and international trade, as is expressly provided in Article 2(e)
which requires states to take all appropriate measures to eliminate discrimination against
women by any person, organisation or enterprise.
CEDAW’s Article 11 ensures equality in choice of profession and promotion and ILO
minimum labour standards, including Convention 11 on Discrimination, Convention 156
on Workers with Family Responsibilities and ILO Fundamental Principles and Rights at
Work, secure a basis for decent work and equal opportunity for career advancement for
women. However, economic leadership is often reached through appointed positions,
board membership, entrepreneurial activities, trading activities and self-employment,
which are not within the context of an employment relationship, and remuneration for top
level corporate employees may be through options, share-holdings and bonuses, not
wages. All these lie beyond the reach of employment protection. Hence, guaranteeing
1
Prepared by Frances Raday with the aim to provide guidance to the consultant.
1
women’s equal access to economic leadership requires newly developed sets of human
rights standards.
I. Women as business leaders, entrepreneurs and decision-makers
Women make important contributions to business around the world as business owners
and entrepreneurs, with 224 million women globally operating businesses.2 Women tend
to be concentrated in small and medium enterprises (SMEs), which account for a
significant share of employment generation and economic growth potential with full or
partial female ownership representing 31- 38% of SMEs in emerging markets.3 Women
informal traders contribute significantly to national GDP, accounting for 64% of value
added in trade in Benin, 46% in Mali and 41% in Chad. 4 Women make up a substantial
portion (70%) of SADC cross-border trade, amounting to over $US 4 billion for women
cross-border traders alone.5
Research shows that companies with female membership and diversity outperform
others. Catalyst has found that companies with women on its boards outperformed
companies with zero women board directors - by 84% return on sales, 60% return on
invested capital, and 46% return on equity.6 Research in the US has also shown that
women entrepreneurs bring in 20% more revenue with 50% less investment.7
Nevertheless, there is a significant gender gap with respect to top leadership in business
and financial decision-making bodies. Out of the world’s 2,000 top performing
companies, just 29, or 1.5%, had female CEOs in 2009.8 Women account for 4% of
CEOs in Fortune 500 companies9 and in IT & Telecom companies.10 In 2012, women
had only 16.6% Fortune 500 Board Seats, of which only 0.6 % women of colour.11 Only
17 out of 177 governors of central banks were women in 2012 (less than 10%).12 In many
VanderBrug, Jackie, “The Global Rise of Female Entrepreneurs”, Harvard Business Review. September 4,
2013.
3
Strengthening Access to Finance for Women-Owned SMEs in Developing Countries (October 2011)
(Global Partnership for Financial Inclusion and the International Finance Corporation), p. 6.
4
ITC Gender Mainstreaming Policy.
5
Ibid.
6
Catalyst. 2011. The Bottom Line: Corporate Performance and Women’s Representation on Boards (2004–
2008)
7
Granger, Sarah “A wave of angel investing organizations focus on women”, Harvard Business Review.
December 4, 2012.
8
Ibarra, Herminia and Morten T. Hansen. “Women CEOs: Why So Few?” Harvard Business Review Blog.
December 21, 2009
9
Catalyst. Women CEOs of the Fortune 1000. See http://www.catalyst.org/knowledge/women-ceosfortune-1000
10
European Union. 2013. Women Active in the ICT Sector.
11
Alliance for Board Diversity. 2012. Missing Pieces: Women and Minorities on Fortune 500 Boards.
Alliance for Board Diversity Census
12
Financial Times, 9
August 2013 – http://www.ft.com/cms/s/2/2d8c1ac4-ffba-11e2-b99000144feab7de.html#axzz2qVDTHhNG
2
2
countries women’s participation in cooperatives plays an important role in their ability to
become successful business leaders and yet they are significantly under-represented in
leadership and decision-making roles.13 Women are similarly under-represented in union
leadership.14
Women around the world tend to be concentrated in small businesses and are more likely
than men to be in the informal sector, running small enterprises that many of which they
operate from home. These businesses tend to be service oriented and far lower down the
chain of value added production, limiting their income and growth.
Discriminatory Law and Practice
In many economies, there are severely discriminatory laws that create barriers to women
operating in business. Examples include registering a business, traveling outside of a
country, owning land and other productive assets, opening a bank account, inheriting
family property, taking a job without a husband’s permission. 15 In many countries, legal
regulation of cooperatives allows membership only for male heads of household.16
In addition to legal barriers, additional limiting factors include gender stereotypes17, lack
of mentoring by senior male business leaders18 and lack of connection to Chambers of
Commerce to identify business and trade opportunities.19 Underinvestment in women
entrepreneurs is a phenomenon worldwide. Research shows that from 1997 to 2000,
women-led businesses in the US received only 5% of venture capital money invested
each year.20 Venture funds with women invest in women entrepreneurs 70% of the time
and therefore support the expansion of female owned businesses but women constitute
just 10-15% of the investment sector. 21 In Africa, female owned companies in the formal
sector in urban areas have 2.5 times less start-up capital than male owned equivalents. In
addition, due to their concentration in small businesses women are specifically affected
by limitations in a country’s investment climate22 and are therefore more vulnerable to
Goler von Ravensburg, Nicole “Economic and other benefits of the entrepreneurs' cooperative as a
specific form of enterprise cluster” (2011). ILO and COPAC; Marston text at notes 30-33.
14
Marston, at notes 34-37.
15
World Bank. Women, Business and the Law 2014. Removing Restrictions to Enhance Gender Equality.
Key Findings.
16
Marston note 86
17
Sheryl Sandberg, Lean In – Women Work and the Will to Lead
18
Ibid
19
Morgan
20
World Bank. WDR 2012. Gender Equality and Development
21
Granger, Sarah. A wave of angel investing organizations focus on women. Harvard Business Review.
December 4, 2012.
22
IFC. 2011. Strengthening Access to Finance for Women-Owned SMEs in Developing Countries.
13
3
economic fluctuations and financial crisis. The gender pay gap widens as women reach
senior positions, for example in the UK, women’s average bonuses are 50% of men’s. 23
Empowerment principles for women in business and Temporary Special Measures,
including quotas
The Women’s Empowerment Principles for business elaborated by UNIFEM and the
Global Compact, onto which CEOs of 604 companies globally have signed so far, focus
on corporate policy for promotion of women’s leadership.24 The Maastricht Principles,
which represent a consensus view as to the extraterritorial obligations of States in the
areas of economic, social and cultural rights, require that States observe human rights
principles relevant to women such as the right to participate in decision-making, nondiscrimination and gender equality25. The OECD Guidelines for Multinational
Enterprises go into the most depth as to how standards of corporate conduct apply to
women, emphasising the equal application of criteria for selection, promotion and
dismissal, without discrimination on grounds of marriage, pregnancy or parenthood. 26
A number of countries have adopted temporary special measures specifically directed to
accelerate de facto equality for women in corporate leadership, entrepreneurship and
trade. Gender quotas for membership of corporate boards have been adopted by
legislation in 13 countries.27 Most of the countries with quota requirements are in
Scandinavia and Western Europe (Israel, Iceland, France, Norway etc.) but some are in
Africa (Rwanda) and Asia (India, Malaysia). The quota requirements apply to
government companies and publicly listed companies. The number of members of each
sex which companies are required to appoint to boards varies between a minimum of one
to a minimum of 40% (France, Iceland, Norway). In some countries the failure to fulfil
quota requirements results in sanctions (France, Italy, Belgium). Quotas may also be
applied in different ways including administration at the district level or as part of
governance of specific types of business, such as cooperatives. For instance, in
Maharashtra, India, local government incorporated gender quotas in legislation governing
cooperatives, creating a quota of 30% female representation on their boards of directors.
There have been some initiatives by the private sector to introduce quotas voluntarily 28
however, on the evidence, it seems that mandatory quotas are the most effective way to
get women on boards.29
Measures are being taken to advance women’s entrepreneurship opportunities. There are
some preliminary good practices for promotion of women’s entrepreneurship, such as the
23
Marston and Fredman
Marston at note 177
25
The Maastricht Principles, adopted in 2011 by a group of experts in international law and human rights.
26
Marston at note 176
27
Marston at notes 47-67
28
Marston at note 63
29
Marston at notes 66-67
24
4
ILO Job Creation in Small and Medium Sized Enterprises Recommendation 1998, which,
recognizing the growing importance of women in the economy, recommends support for
female entrepreneurship through measures designed specifically for women who are or
wish to become entrepreneurs; and Women’s Entrepreneurship Development and Gender
Equality program which supports women in starting and developing businesses. The
Canadian Trade Commissioner Service hosts Business Women in International Trade
(BWIT), which supports women entrepreneurs by representing and advocating for their
interests in exports.30 The Malaysia External Trade Development Corporation
(MATRADE) introduced a special program in 2005 to assist women exporters.31 The ITC
has encouraged states to devise gender-sensitive national export strategies.32
Training, information and provision of credit and saving facilities are all essential for
entrepreneurship. Some of the more well-known multi-lateral initiatives to support
women’s entrepreneurship and facilitate their access to financial resources are the ILO's
Women's Entrepreneurship Development and Gender Equality programme (WEDGE),
the Global Banking Alliance (GBA) for women and the Mann Deshi Mahila Sahakari
Bank was founded in 1997 as the first legally recognised women’s cooperative bank in
India.
Procurement policies that target women are a developing tool to advance women’s
businesses. Government is the largest buyer of goods and services in developing
countries accounting for 15-20% GDP. Yet when asked what it spends on sourcing from
women owned businesses, developing country governments estimate only 1%.33
However, some countries have begun to tackle the issue. The US set a mandatory goal of
5% of federal contract spending for Women-Owned Small Business (WOSB). 34 Kenya
put in place the Public Procurement and Disposal (Preference and Reservations)
Regulations, to ensure that enterprises owned by women, youth and persons with
disabilities, are able to access government contracts.35
II. Corporate responsibility and the gender impact of corporate and international
trade practices
30
Higgins, Kate, Gender and Free Trade Agreements: Best Practices and Policy Guidance. The NorthSouth Institute; http://www.nsi-ins.ca/wp-content/uploads/2012/11/2012-Gender-and-Free-TradeAgreements-Best-Practice-and-Policy-Guides.pdf (2012)
31
Ibid
32
Marston, note 111-113
33
Jones, Meg. The Economic Empowerment of Women Through Trade. ITC Presentation. Workshop on
Business and Gender, Office of the UN High Commissioner for Human Rights (Geneva 2-3 October 2013)
34
Small Business Association. SBA Announces Contracting Program For Women-Owned Small
Businesses. Press Release February 1, 2011. See also http://www.wipp.org/?page=Procurement
35
Gathira, Wanjiru “What Should be Done to Support Women Enterprises to Participate in and Benefit
from the Lucrative Public procurement Market” Social Impact Institute.
June 2013.
5
Over the past three decades, transnational corporate activity and economic and trade
policies have created economic opportunities for women as well as exposing them to
severe human rights violations. During this period, corporate governance has produced a
dramatic increase in inequalities of resources and income, with harsh implications for
women given their concentration lower on the value chain and in poverty. From 1988 to
2008, people in the world’s top 1 percent saw their incomes increase by 60 percent, while
those in the bottom 5 percent had no change in their income; 8 percent of humanity takes
home 50 percent of global income; the top 1 percent alone takes home 15 percent.
Income gains have been greatest among the global elite - financial and corporate
executives in rich countries and China, India, Indonesia and Brazil.36 In many countries,
weak corporate governance and eroding social cohesion have led to increasing gaps
between the pay of chief executives and that of ordinary workers - approaching the 500to-1 level for America’s biggest companies (as estimated by the International Labor
Organization).37 The increasing mobility of corporations, with the support of free trade
agreements, has resulted in financial and political power as compared with host States
and can contribute to a lack of accountability and insurmountable barriers for women to
access justice.
The emerging business and human rights agenda focuses on corporate responsibility for
human rights violations. The Guiding Principles on Business and Human Rights (UNGP)
establish three pillars of corporate responsibility: the duty of the State to protect against
human rights abuses by private actors; corporate responsibility to respect human rights;
and the duty of both to provide remedies for violation of rights. While the UNGP
acknowledge that guidance to business should take into account gender considerations38,
there is significant work to be done to elaborate upon this and address the gendered
impact of corporate activities on women. Human rights abuses by corporations
disparately impact women because they exacerbate existing discrimination.
The harm to women
Some of the most noted examples of corporate abuse are in export processing zones, in
home and sweatshop sectors, and in the extractives industries.
Export processing zones are delineated industrial estate, which constitutes a free trade
enclave. They are feminised work enclaves in which women make up the majority of all
workers, up to 100% in some cases. Women workers face particularly harsh employment
conditions. Normal labour laws are usually not applied whether de jure or de facto, there
is a lack of union organisation and, typically, women’s wages are 20-50% lower than
36
Branko Milanovic cited in http://opinionator.blogs.nytimes.com/2013/10/13/inequality-is-a-choice/?_r=0
Stiglitz, Joseph E. “Inequality Is a Choice”,
http://opinionator.blogs.nytimes.com/2013/10/13/inequality-is-a-choice/?_r=0
38
Marston at notes 174-175
37
6
men’s and promotion prospects are low for women, who are predominantly employed as
semi-skilled or unskilled workers.39 Furthermore, EZPs create a health hazard for women,
as working hours are as much as 25% longer than elsewhere and there are rights
violations relating to hours, pregnancy protection, maternity leave or childcare and sexual
harassment.
Sweatshop and homework sectors are a method of exploitation of cheap, informal labour,
mainly women’s. Numerous companies have set up sweatshop operations overseas to
avoid labor law regulation in their own State. Women make up 85-90% of sweatshop
workers, employers force them to take birth control and routine pregnancy tests to avoid
supporting maternity leave or providing appropriate health benefits40. Thousands of
Bangladeshi women work in apparel factories, with the constant threat of fatal sweatshop
fires, in large part because of corporate cost-saving decisions.41 Businesses subcontract
more than 300 million homeworkers in developing countries, engaged to work at home in
textiles, electronics, packaging and processing, for piece rate42without labour rights
protections and with a cut of earnings taken by middlemen.43
Women in particular have borne the brunt of land dispossession for use by extractives
industries, as well as increasingly for biofuel, agribusiness and real estate projects.44
These industries are land intensive and displace women who make up 70-80% of the
world’s small scale farmers. Women are the first to lose their livelihood, often do not
receive compensation paid to landowners, who are male, and are the last in line for
formal employment in the industries. Women, as primary carers, are deprived of shelter
and the ability to feed their families. 45 The arrival of a transient, largely male workforce
also increases prostitution, sexual violence and sexually-transmitted disease.46
Mismanagement of extractives projects and the involvement of security forces can also
39
Sukthankar, Ashwini and Ramapriya Gopalakrishnan. 2012. Freedom of Association for Women
Workers in EPZs. A Manual. ILO; WILPF - Women's International League for Peace & Freedom
http://www.wilpfinternational.org/economicjustice/EPZ/epzindex.html
40
http://www.dosomething.org/tipsandtools/11-facts-about-sweatshops
41
http://www.laborrights.org/sweatshop-fires-in-bangladesh
42
Ethical
Trading
Initiative.
Homeworker
Briefing.
April
2010.
See
http://www.ethicaltrade.org/sites/default/files/resources/Homeworkers%20and%20homeworking.pdf
43
Dovey, Kathryn, “Putting Gender on the Business and Human Rights Agenda. Scoping Paper. Realizing
Rights” (2009), Marston at notes 144-148.
44
For example, an estimated 30,000 people a year are driven from farmland or urban areas to make way for
real estate developments, mining and agricultural projects in Cambodia.Prak Chan Thul. “World Bank
stops funds for Cambodia over evictions.” Reuters. August 9, 2011; In Phnom Penh, 10,000 people were
evicted from Boeung Kak Lake for a Chinese luxury real estate project with women leading protests and
being imprisoned as a result. The Economist. “Justice in Cambodia: The Boeung Kak 13” June 27, 2012.
45
Publish What You Pay and UN Women. “Communiqué - Towards A Gender-Responsive Extractive
Industry in Africa” April 17, 2013.
46
Van Riet, Marinke and Christine Musisi “Joining hands: UN Women and PWYP to fight the resource
curse together” Thomson Reuters Foundation (April 4, 2013).
7
lead to severe violations of human rights that are manifested in unique ways for women.
For example, in Aceh, Exxon Mobil hired Indonesian military for security which
perpetrated murder, torture and sexual violence47 and, in Myanmar, women have faced
widespread rape at the hands of military forces used to intimidate ethnic minorities and
those that have opposed mining in their communities.48
Gender mainstreaming corporate responsibility
There are some initial moves, at the international, State and company levels, to gender
mainstream the principles of corporate responsibility. CEDAW has been a main
international forum for examination of corporate responsibility for harm to women,
holding States responsible for denial of equal access to women by private health
providers.49 There are examples of where international trade agreements have been used
to create incentives for corporate social responsibility with direct impact on women, for
example, the US-Cambodia trade agreement, undertaken with the help of the ILO, linked
access to US markets with improved labour conditions for the largely female garment
workers in Cambodian factories.50 In the garment sector in Sri Lanka, the company MAS
Holdings realised that they could reduce the number of workers they were losing and
associated costs by providing child care, career development and training, among other
benefits. Despite competitors having lower costs, the company’s commitment to workers
rights has led to additional contracts for them with buyers such as Victoria’s Secret, Gap,
Nike, Adidas, and Marks & Spencer.51General Electric, when it discovered that its mobile
technology was being used in India and China to facilitate sex selective abortions, GCE
invested efforts to prevent use of their ultrasound equipment to increase female feticide
by a campaign for “Respecting Human Rights through Outward Looking Educational
Campaigns and Promotion of Standard Practices “52
Additionally, civil society and women workers themselves have been important agents
for change. For example, in Cambodia Women’s Agenda for Change, an affiliate of
Oxfam Hong-Kong, worked with local women garment workers to create workers’ dropin centres where young women garment workers learned about labour rights,
international trade laws and trends and organized and educated other women workers.53
In the US, women working on the Imokalee tomato farm who had lived in slavery like
47
Marston at note 194
Marston at note 152
49
Marston notes 182-184
50
Marston, Ama. 2007. Labor Monitoring in Cambodia’s Garment Industry: Lessons for Africa. Realizing
Rights.
51
Mcarthy, Lauren et al. 2012. Gender equality: it's your business. Oxfam
52
Promoting Ethical Ultrasound Use in India. A BLIHR Emerging Economy Case Study from GE. January
2009
53
Marston, Ama. 2007. Labor Monitoring in Cambodia’s Garment Industry: Lessons for Africa. Realizing
Rights.
48
8
conditions organized themselves over time to create widespread change in their
conditions as well as those of many others who had worked in slavery-like conditions.54
Civil society representatives have also joined a handful of business leaders to form the
Business and Human Rights Reference Group, that has begun to elaborate how gender
fits into UNGPs.55
Kaufmann, Greg. “Immokalee Workers Deliver on ‘Freedom From Want”, Moyers and Company. (18
October 2013)
55
See http://tinyurl.com/BHR-Ref-Group.
54
9