Human Rights and Business Dilemma

8/3/2019 Human Rights and Business Dilemma

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Product misuse

This page presents an introduction to and analysis of the dilemma. It does so throughthe integration of real-world scenarios and case studies, examination of emergingeconomy contexts and exploration of the specific business risks posed by the dilemma.It also suggests a range of actions that responsible companies can take in order tomanage and mitigate those risks.

What is the dilemma?

"How do companies that sell products that can easily be misused to infringe human rights

protect against such misuse, so that that their legitimate sale can continue?"

The globalisation of many multi-national companies' (MNCs) marketing chains means their goods are

being sold into an ever-wider spectrum of countries, each with its own political, cultural and humanrights context. Whilst this is not necessarily a new phenomenon in itself, MNCs are facing newer

challenges in terms of stakeholders (including consumers and investors) increasingly making a link

between how these products are used by third parties and the company itself. This is particularly the

case where products are misused to violate human rights. In part, this link is being made due to:

o Better consciousness on the part of business and society more broadly, of violationscommitted abroad due to increased media coverage and access, and identification of companycomplicity in the courts

o Enhanced understanding of the concept of complicity, which has been clarified by

Professor John Ruggie's work, particularly in his report of 15 May 2008 entitled Clarifying theConcepts of "Sphere of Influence" and "Complicity" '1

o Awareness on the part of business and society more broadly, that companies areexpected to "make sure that they are not complicit in human rights abuses" in line with Principle2 of the UN Global Compact 2

o An inability amongst stakeholders (including NGOs, activists etc) to hold the actualperpetrators to account, leading them to focus on the role of (potentially more accountable)MNCs instead

o Growing focus on brand value' amongst many MNCs, making them more vulnerableto negative media coverage of product misuse even when it is by third parties

Where such a link is made, the company could face allegations of complicity in the wrongdoing of third

parties due to selling them the product in the knowledge that it might be misused to violate human

rights. This can present a particular challenge to some MNCs, as many products can potentially be

misused to abuse human rights, making it extremely hard to guarantee they will only be used for

legitimate' purposes. This challenge is being exacerbated by two key issues linked to corporate

expansion into new markets:
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o The growing range of countries MNCs are selling into means it is increasinglychallenging for companies to maintain strong oversight of the human rights and product misuserisks present in any particular remote location

o Many MNCs are becoming increasingly distant from their end-users, due to theexpansion of their distribution chains with an increasing number of intermediaries' between

themselves and the final purchasers of their products

To some degree, the ability of companies to prevent the misuse of their products will depend upon the

extent to which companies assess the potential impacts of their products, foreseeability' of the risk of

misuse as well as the nature of companies' marketing strategies, which can help to prevent the risk

from materialising and/or mitigate it.

The test of foreseeability'

This dilemma focuses only on those products for which the risk of misuse is reasonably foreseeable

given the three sets of factors that companies should consider under the UN's "Protect, Respect and

Remedy" policy framework 3 ("the framework"), to respect all human rights:

o The context of the country where it is being sold (for example, the Chinesegovernment's historical attitude to freedom of expression and the right to privacy makes itrelatively more likely that different surveillance and information communication technologiesmay be misused in a way that undermines citizens' human rights)

o The human rights impacts of the potential alternative use of the product (for example,law enforcement equipment, such as handcuffs, stun guns and riot batons can easily bemisused to illegitimately infringe human rights)

o The risk culture' of the partners or intermediaries with whose help the product is sold

(for example, evidence (or reasonable suspicion) that the local seller is likely to ignore the riskthat third party purchasers may use a product in a way that undermines human rights)

Company control over sales

With regards to marketing strategies, companies may use a number of means to deliver and distribute

their products:

o Direct sales

o Joint ventures with local sellers

o Use of intermediaries (e.g. franchisees and brokers)

If a company uses direct sales, it can use licence agreements or a sales contract to ensure the

legitimate use of its product. Where sales are carried out through third-parties', companies may also

use service contracts to commit these third parties to take measures to prevent and/or reduce the risk

of product misuse.
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Nonetheless, where a company has no restrictions in place regarding the use of their products, they

face a higher risk of being perceived as complicit with any human rights abuses committed by the

purchaser using their product. Likewise, even if restrictions are in place with the primary purchaser,

this will not necessarily ensure that the product is not sold to and misused by a secondary

purchaser (e.g. in a re-sale context).

In some cases, the type of product and the commercial reality faced by companies may also make it

impractical to track the continued use of their products and thus address the problem in an effective

way. For example, although knives clearly have the potential to be used for illegitimate purposes, the

number in which they are produced, their average value, the wide range of legitimate uses and the

wide range of legitimate users make it all but impossible to place restrictions on relevant value chains

or to trace their use.

Challenges presented by the country context

In some countries, products may be misused as a result of national laws, government policies and

social practices i.e. latent contextual issues that the company has little prospect of changing. Where

this is the case, a responsible company may be faced with a difficult choice. It may:

o Continue legal sales of the product in that country despite the danger that the productmay be used to commit human rights violations, or

o Refuse to do business in that country, and so forgo the revenues that would havebeen generated through the legal sale of its products there

Following the first course of action could imply that companies owe no responsibility for their actions

beyond legal liability. The second course of action may be feasible and in line with a company's ethicscode, or it may be unrealistic, as it can severely limit the countries and markets in which companies

can conduct business. Failure to sell into certain markets could also be ethically wrong if the product in

the majority of its use scenarios offers broader human and social benefits when used in the way in

which it is intended.

Considering this, the dilemma for a responsible business is how to best ensure that the legitimate

products it sells are not used to facilitate human rights violations particularly given the commercial,

political and ethical constraints that they are likely to face in such situations.

Scope of product misuse: military equipment and other controlled goods

In certain cases, companies will not always have a choice as to who they sell to. For example, many

products are subject to state export controls for reasons of geopolitics, security and/or human rights. In

such cases, human rights violations arising out of the misuse of such products that have been

specifically authorised for export arguably places responsibility on the authorising state rather than the

company that sells the product. This is especially the case with respect to weaponry and other military


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equipment, which is often subject to very tight export restrictions. Furthermore, the very nature of

weaponry, which can be used both legitimately and illegitimately to inflict serious harm, makes it

something of a special case' compared to other products (including non-military products that are

otherwise subject to state controls). For these reasons, the trade in arms is excluded from the scope of

this dilemma.

Nonetheless, export controls will not necessarily cover all products, and where they do cover a

particular product, this will not necessarily be due to the risks it poses to human rights (i.e., it may be

controlled for political or other reasons). This being the case, there will be situations where controlled

goods are authorised for sale to third parties that do indeed present a risk to human rights.

As a result, this dilemma does cover controlled products that are authorised for sale to potential

human rights violators. This is because, in a sense, the ultimate decision making power as to whether

to sell to potential human rights violators or what conditions are imposed on such sales still lies

with the company, allowing latitude for responsible decision making, which is explored in this dilemma.

Real-world examples

The following examples show the types of challenges that companies may face when selling different

products into environments in which human rights violations are common.

Change in India's sex ratio puts the focus on the sale of ultrasound technology by GE andother companies

In April 2007, the Wall Street Journal reported that the availability of ultrasound technology in India

was changing the country's sex ratio with reduced numbers of female babies being born. Theavailability of technology to detect the sex of an unborn baby has reportedly facilitated the practice of

female sex-selective abortions. This is despite governmental legislation and action against female

feticide. As a result, the Wall Street Journal reported that this raised questions about the impact of

sales ultrasound technology in the country with General Electric (GE) being the largest vendor. 4

Despite relevant legal protections, prejudice against women is common in India. Males are often

viewed as wealth earners during their life. By contrast, having a daughter is often seen as a financial

burden due to the practice of dowry payments. GE has previously faced a similar challenge in China.

In its Citizenship Report, particularly with regards to Ethical Product Use ,5 GE argues that "given the

multiple uses for ultrasound in obstetrics and gynaecology, restricting access to the technology

altogether would have conflicted with the human right to reach the highest attainable standards of

health." However (and given the specific context), uncontrolled access to the technology could clearly

have serious human rights implications, such as encouraging societal discriminatory practices like

those mentioned above.
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Cisco reportedly selling surveillance technology to China

An internal presentation document by Cisco engineers entitled " Overview of the Public Security

Sector "6, leaked to reporters on the eve of a US Senate human rights hearing in 2008, revealed that

the company's technology has been used in the building of China's Golden Shield' project. The

Golden Shield' Project was developed to monitor and screen Internet usage by all Chinese citizens.As reported by The Epoch Times ,7 the Ministry of Public Security claimed the system facilitates police

data sharing for criminal matters. However, it is widely believed to be used as part of the Chinese

government's extensive censorship system.

The misuse of Cisco's technology puts the company in a difficult position. An internal Cisco

presentation showed that the company was aware that one of Golden Shield's stated goals was to

"combat Falun Gong' evil religion and other hostilities" (see Dilemma on Freedom of Religion and

Non-discrimination). However, a Cisco statement on the dilemma (contained on its website) refers to

the multiple functionality of the technology, which can easily be misused. As Cisco has stated, the

functionality of the technology allows for the illegitimate violation of people's rights to privacy, freedom

of expression and religion may be the same functionality that allows libraries and corporate network

administrators to legitimately block questionable sites .8 Thus, the company has not admitted to

knowingly selling the product to intrude on the rights of Chinese citizens, but rather has implied its

misuse by the Ministry of Public Security.

A February 2010 list of the Electronic Frontier Foundation (EFF) entitled Seven "Corporations of

Interest" in Selling Surveillance Tools to China' 9 includes Cisco as one of the companies that continues

to sell surveillance technology to the Chinese government and related entities. EFF admitted that there

was no absolute evidence that the companies on the list were indeed fostering repression in China.However, EFF believed that news reports on the human rights situation in China, as well as some that

include admissions of some level of involvement from company officials the mentioned internal

presentation document by Cisco engineers being an example gave a sufficient basis to question the

company's sales.

Controversy over Caterpillar sales of D-9 bulldozers to the Israeli Defence Forces

US-based company Caterpillar has been criticised on numerous occasions by the international human

rights community, including by Human Rights Watch in its commentary entitled, " Israel: Caterpillar

Should Suspend Bulldozer Sales ",10

Amnesty International in the report, " Israel and OccupiedTerritories: Under the Rubble: House Demolition and Destruction of Land and Property ",11 and the UN,

particularly in the report of the Special Rapporteur of the Commission on Human Rights entitled " The

Right to Food ".12 Concern has been raised over the company's decision to supply bulldozers to the

Israeli Defence Forces (IDF). The D-9 bulldozer is made by Caterpillar in accordance with military

specifications and is sold to Israel as weaponry under the US Foreign Military Sales Program, a

government-to-government programme for selling US-made defence equipment. Once exported to
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Israel, the bulldozers are armoured by state-owned Israel Military Industries Ltd and used in house

demolitions.

The home demolitions carried out by the IDF have been recognised by the UN as illegal under

international law .13 According to AI report, " Israel and the Occupied Territories: Under the Rubble:

House Demolition and Destruction of Land and Property ",14 some of these demolitions resulted in

deaths and injuries to civilians and were conducted without sufficient notice while occupants were still

inside the homes. Since 2001, Caterpillar Inc. has faced direct allegations by concerned groups and

individuals (including a UN Special Rapporteur on the Right to Food, Jean Ziegler 15 and HRW 16)

claiming it was aiding and abetting human rights violations by supplying the IDF with bulldozers. The

case of one of the victims, Rachel Corrie, has spurred a new wave of criticism of company's business

actions. In 2003, Corrie, a 23 year old American human rights defender, who had been non-violently

demonstrating against Palestinian home demolitions with fellow members of the International Solidarity

Movement , was crushed to death by IDF using a Caterpillar D-9 bulldozer .17

In a response to HRW's allegations that Caterpillar was complicit in illegally destroying Palestinian

homes, its CEO was reported by HRW to have said that the company "did not have the practical ability

or legal rights to determine how our products are used after they are sold." 18 According to the Crimes of

War Project , company officials also maintain "they cannot be held responsible if their products are

used illegally" .19

Common Dilemma Scenarios:

Some of the most common and relevant examples of product misuse include surveillance technology,

policing devices and other security equipment, health products and technology, chemicals, information

communication technology and dual-use products.

Misuse of Surveillance Technology

The right to life and security implies positive obligations on states to ensure that all reasonable

measures have been taken to protect people from possible security threats. In many cases, protection

includes a range of surveillance technologies such as CCTV, phone, email and Internet surveillance.

These technologies have entered into (relatively) common usage in a range of locations.

When misused, however, such technologies can undermine people's rights to privacy and freedom of expression. They can also facilitate the identification and arrest of political, religious and human rights

activists. The misuse of such products and technologies has led to institutions such as the European

Parliament to call on the EU in Recommendations on Protecting Human Rights Defenders and

Promoting Their Work 20 to "systematically denounce and reprimand international companies" that

provide "oppressive regimes with surveillance technology."
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Examples of the misuse of surveillance technologies include the following:

o In Iran, surveillance technology supplied by Nokia-Siemens Networks (NSN) to twoIranian mobile phone operators in 2008 was reportedly used by authorities to help track downdissidents amid the mass protests following the contested re-election of President MahmudAhmadinejad in June 2009. It is believed that this was one of several means by which thegovernment identified dissidents. According to the euobserver.com , on 2 June 2010 NSN toldMembers of the European Parliament that the company had learned its "lesson" and had pulledout of the "monitoring centre business "21

o In the United Arab Emirates (UAE), Blackberry users were prompted by UAEtelecoms firm Etisalat to download software that was claimed to improve performance but infact could allow unauthorised access to private information and e-mails, BBC reported.Blackberry maker Research in Motion said in a statement to customers that "Etisalat appears tohave distributed a telecommunications surveillance application". It added that "independentsources have concluded that the Etisalat update is not designed to improve performance of your BlackBerry Handheld, but rather to send received messages back to a central server". The

update was subsequently identified as an application developed by American firm SS8. TheCalifornia-based company described itself as a provider of "lawful electronic intercept andsurveillance solutions" 22

o In China, a large-scale surveillance system was documented in a report of CitizenLab researchers entitled " Breaching Trust: An Analysis of Surveillance and Security Practiceson China's TOM-Skype Platform ".23 Citizen Lab reported on the system which allows theauthorities to pick up and store messages sent through the Skype online telephone and textmessaging service. The database held more than 150,000 messages, which included politicallysensitive words and phrases for China. Skype is operated in China as Tom-Skype, a jointventure involving US-based auction site, eBay and Chinese company TOM-Online. Citizen Labsaid it was "clear" that Tom was "engaging in extensive surveillance with seemingly little regard

for the security and privacy of Skype users"

Misuse of policing devices and other security implements

As with surveillance technology, a range of equipment is necessary for the legitimate provision of

security. Nonetheless, such equipment can be misused, resulting in human rights violations.

In 2004, the UN Special Rapporteur on Torture noted in his report " Trade and Production of Equipment

Specifically Designed to Inflict Torture "24 that the vast majority of cases of alleged torture or other forms

of ill-treatment have involved the misuse of otherwise legitimate security equipment, such as

handcuffs, batons and their variations (sticks, canes, lathis, truncheons), tear gas and pepper sprays.

For example, in a study titled "Europe: From Words to Deeds: Making the EU Ban on the Trade in

Tools of Torture' a Reality" 25 carried out in March 2010, Amnesty International (AI) and Omega

Research Foundation alerted the public to the incidents of selling security equipment for law

enforcement and detention by European companies to countries whose police and security forces are

known offenders against human rights and have made use of such equipment to inflict torture and

other ill-treatment.
http://euobserver.com/9/30197http://euobserver.com/9/30197http://euobserver.com/9/30197http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn21%23_ftn21http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn21%23_ftn21http://news.bbc.co.uk/1/hi/8161190.stmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn22%23_ftn22http://www.nartv.org/mirror/breachingtrust.pdfhttp://www.nartv.org/mirror/breachingtrust.pdfhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn23%23_ftn23http://www.derechos.org/nizkor/torture/doc/instruments.htmlhttp://www.derechos.org/nizkor/torture/doc/instruments.htmlhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn24%23_ftn24http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn24%23_ftn24http://www.amnesty.org/en/library/info/EUR01/004/2010/enhttp://www.amnesty.org/en/library/info/EUR01/004/2010/enhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn25%23_ftn25http://www.amnesty.org/http://www.sigrid-rausing-trust.org/Grantees/Omega-Research-Foundationhttp://www.sigrid-rausing-trust.org/Grantees/Omega-Research-Foundationhttp://euobserver.com/9/30197http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn21%23_ftn21http://news.bbc.co.uk/1/hi/8161190.stmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn22%23_ftn22http://www.nartv.org/mirror/breachingtrust.pdfhttp://www.nartv.org/mirror/breachingtrust.pdfhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn23%23_ftn23http://www.derechos.org/nizkor/torture/doc/instruments.htmlhttp://www.derechos.org/nizkor/torture/doc/instruments.htmlhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn24%23_ftn24http://www.amnesty.org/en/library/info/EUR01/004/2010/enhttp://www.amnesty.org/en/library/info/EUR01/004/2010/enhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn25%23_ftn25http://www.amnesty.org/http://www.sigrid-rausing-trust.org/Grantees/Omega-Research-Foundationhttp://www.sigrid-rausing-trust.org/Grantees/Omega-Research-Foundation


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Thus, the worrying examples included the sale of electric-shock devices to countries, such as Georgia,

Mongolia, Pakistan, Moldova, Senegal, Cameroon, and chemical sprays to countries, such as China

and India. This has been done despite evidence (particularly from Amnesty International Reports) that

the police and security forces in these countries had often used the mentioned products for illegitimate

purposes.

Misuse of health products and technology

Advanced drugs and medical technology, which on the one hand vital for the realisation of the right to

health, also have the potential to be used in ways for which they were not intended to undermine a

range of human rights. The following are few examples of misuse which are of concern:

o Drugs: In a 1986 report On Torture and Other Cruel, Inhuman or DegradingTreatment or Punishment ,26 the first UN Special Rapporteur on Torture included "administrationof drugs, in detention and psychiatric institutions" among the forms of physical torture. The

report specified three types of psychotropic drugs, including "neuroleptics" that cause trembling,shivering and contractions, but which also cause a person to become apathetic and "dull hisintelligence." Neuroleptics are recognised by some as an appropriate medicament in treatingpsychosis .27 In a 2002 Report on Bulgaria ,28 Amnesty International recognised their usefulnessfor calming behaviour and psychotic thoughts but indicated that in "large doses, as well asprolonged usage, they can have very undesirable side effects". Pharmaceutical companies thatlegitimately produce neuroleptics include Johnston & Johnston , Lillyand Astrazeneca . In 2010,the BBC reported, that so-called date-rape drugs were on the rise, according to the UN drugcontrol agency's annual report. These drugs were used to reduce people's resistance tounwanted sexual activity and restricted their ability to remember what had happened later.Some of the substances used also have legitimates uses, including for short-term treatment of chronic or severe insomniacs that are not responsive to other hypnotics, which makes it harder to keep them out of the hands of criminals. Rohypnol (Flunitrazepam) has attracted particular media attention for its misuse in this respect. Its primary manufacturer is Roche , a Swisspharmaceutical company

o Physical restraints: Restraint beds can be legitimately used in mental hospitals tosuppress the violent behaviour of mentally disabled patients. They are legitimately produced bydifferent companies specializing in products for healthcare and long-term care. However, their use to inflict ill-treatment on detainees in prisons has also been reported. In its 2003 Reporttitled "Pain Merchants: Security Equipment and its Use in Torture and other Ill-Treatment "29

Amnesty International (AI) has attracted attention to the death of a 56-year old Austrianprisoner, Ernst K., who died in Krems Stein prison. Ernst K.'s hands and legs had reportedlybeen strapped to both sides of the bed and he had been left unable to move

o Ultra-sound technology: As described above, ultrasound technology appears tohave been used in India to facilitate female-sex abortions, whereas its principal use is inobstetrics and gynaecology. As already noted, products that allow the detection of the sex of anunborn child in a context where female foetuses are likely to be aborted, can have serioushuman rights implications

Misuse of Information Communication Technologies
http://ap.ohchr.org/documents/E/CHR/report/E-CN_4-1986-15.pdfhttp://ap.ohchr.org/documents/E/CHR/report/E-CN_4-1986-15.pdfhttp://ap.ohchr.org/documents/E/CHR/report/E-CN_4-1986-15.pdfhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn26%23_ftn26http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn27%23_ftn27http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn27%23_ftn27http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn27%23_ftn27http://www.amnesty.org/en/library/asset/EUR15/008/2002/en/e38b7c94-d7fd-11dd-9df8-936c90684588/eur150082002en.htmlhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn28%23_ftn28http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn28%23_ftn28http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn28%23_ftn28http://www.jnj.com/connect/healthcare-products/prescription/http://www.jnj.com/connect/healthcare-products/prescription/http://www.lilly.com/products/http://www.astrazeneca.com/medicines/neuroscience/http://www.astrazeneca.com/medicines/neuroscience/http://news.bbc.co.uk/1/hi/world/europe/8533736.stmhttp://news.bbc.co.uk/1/hi/world/europe/8533736.stmhttp://www.a1b2c3.com/drugs/roof_01.htmhttp://www.roche.com/index.htmhttp://www.roche.com/index.htmhttp://www.amnesty.org/en/library/info/ACT40/008/2003http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn29%23_ftn29http://ap.ohchr.org/documents/E/CHR/report/E-CN_4-1986-15.pdfhttp://ap.ohchr.org/documents/E/CHR/report/E-CN_4-1986-15.pdfhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn26%23_ftn26http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn27%23_ftn27http://www.amnesty.org/en/library/asset/EUR15/008/2002/en/e38b7c94-d7fd-11dd-9df8-936c90684588/eur150082002en.htmlhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn28%23_ftn28http://www.jnj.com/connect/healthcare-products/prescription/http://www.lilly.com/products/http://www.astrazeneca.com/medicines/neuroscience/http://news.bbc.co.uk/1/hi/world/europe/8533736.stmhttp://www.a1b2c3.com/drugs/roof_01.htmhttp://www.roche.com/index.htmhttp://www.amnesty.org/en/library/info/ACT40/008/2003http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn29%23_ftn29


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Information Communication Technologies (ICT) cover a broad range of technologies that can facilitate

access to and sharing of information and ideas and make the presentation of information user-friendly.

However, when misused, ICT can lead to various human rights violations. This concern was

particularly expressed by UNESCO in its Report " Ethical Implications of Emerging Technologies ",30

which looks into the ethical, legal and societal implications of different technological choices.

Examples of the misuse of ICT to restrict human rights include:

o Encryption technologies: Data encryption technologies produced by softwareindustry leaders, such as AVG, Cisco Systems , Dell, HP, IBM and others are legitimately usedto protect commercially sensitive information and communications. However, the functionality of such technologies can be easily abused, including by criminal groups looking to maintainingprivacy of communication. For example, in 2002 BBC reported that the National Hi-Tech CrimeUnit and their colleagues in Europol had broken into an Internet paedophile ring known as theShadows Brotherhood. The group's activities centred on a website, which had an archive of child abuse images. When uploading and downloading images to and from the site, they used

sophisticated encryption techniques, often hiding obscene material in apparently innocentpicture files 31

o Biometrics: Biometrics is an emerging technology that measures and analysesunique characteristics of individuals, including both physical and behavioural. Examples includeDNA, facial patterns and fingerprints recognition software. Industry leaders in advancedfingerprint and palm print technology include companies such as Cogent , L-1, Motorola , NECand Sagem . On the one hand, this technology can help governments to limit travel by criminalsor suspected dangerous persons. On the other, it could enable building a complete profile of aperson, which could be used for illegitimate purposes

o Radio frequency identification (RFID): RFID is a technology that enables data

exchange from a small wireless device, called an RFID tag, which is equipped with a computer chip and antenna. It could be useful in the area of product tracking to manage supply chain andinventory. However, the use of RFID tags on moving objects when embedded in the uniformsof employees can lead to allegations of breach of privacy of employees. For example, in 2005Cisco began selling RFID servers that work with RFID chips embedded in uniforms to trackemployee whereabouts. However, according to v3.co.uk , this technology was criticised byLiberty, who claim that " [it] undermines employee privacy even further and reinforces the slur that workers cannot be trusted" 32

o Computer hardware: In January 2010 Voice of America News reported that a USfederal district court allowed a claim against IBM and Fujitsu ICL to proceed under the AliensTort Claims Act. The companies are accused of supplying technology which the South African

authorities used to create "passbooks" for the black population that were used to control their movement, employment and residence .33 According to the legal counsel for the victims, asreported by CorpWatch , "apartheid could not have been maintained in the same manner without the participation of the defendants". 34 According to Telegraph , IBM contended that it wasnot the company's place to tell clients how to use its products 35

Misuse of chemicals and fertiliser
http://unesdoc.unesco.org/images/0014/001499/149992E.pdfhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn30%23_ftn30http://www.avg.com/gb-en/homepagehttp://www.cisco.com/http://www.dell.com/http://www.dell.com/http://welcome.hp.com/country/uk/en/cs/home.htmlhttp://www.ibm.com/us/en/http://www.ibm.com/us/en/http://www.ibm.com/us/en/http://news.bbc.co.uk/1/hi/sci/tech/2082657.stmhttp://news.bbc.co.uk/1/hi/sci/tech/2082657.stmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn31%23_ftn31http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn31%23_ftn31http://www.cogentsystems.com/http://www.l1id.com/http://www.motorola.com/http://www.nec.com/http://www.nec.com/http://www.sagem.com/http://www.sagem.com/http://www.v3.co.uk/vnunet/news/2127277/cisco-slammed-rfid-staff-trackerhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn32%23_ftn32http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn32%23_ftn32http://www1.voanews.com/english/news/africa/Apartheid-Case-Tests-Reach-US-Courts--83937782.htmlhttp://www1.voanews.com/english/news/africa/Apartheid-Case-Tests-Reach-US-Courts--83937782.htmlhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn33%23_ftn33http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn33%23_ftn33http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn33%23_ftn33http://www.corpwatch.org/article.php?id=4856lhttp://www.corpwatch.org/article.php?id=4856lhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn34%23_ftn34http://www.telegraph.co.uk/news/worldnews/northamerica/usa/5128938/US-court-allows-apartheid-claims-against-IBM-and-carmakers.htmlhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn35%23_ftn35http://unesdoc.unesco.org/images/0014/001499/149992E.pdfhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn30%23_ftn30http://www.avg.com/gb-en/homepagehttp://www.cisco.com/http://www.dell.com/http://welcome.hp.com/country/uk/en/cs/home.htmlhttp://www.ibm.com/us/en/http://news.bbc.co.uk/1/hi/sci/tech/2082657.stmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn31%23_ftn31http://www.cogentsystems.com/http://www.l1id.com/http://www.motorola.com/http://www.nec.com/http://www.sagem.com/http://www.v3.co.uk/vnunet/news/2127277/cisco-slammed-rfid-staff-trackerhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn32%23_ftn32http://www1.voanews.com/english/news/africa/Apartheid-Case-Tests-Reach-US-Courts--83937782.htmlhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn33%23_ftn33http://www.corpwatch.org/article.php?id=4856lhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn34%23_ftn34http://www.telegraph.co.uk/news/worldnews/northamerica/usa/5128938/US-court-allows-apartheid-claims-against-IBM-and-carmakers.htmlhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn35%23_ftn35


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Certain chemical products, including those intended for agricultural use, can if used in illegal or

inappropriate ways, result in human rights violations. Although a wide range of chemicals are subject

to legal restrictions, this is by no means always the case.

For example, ammonium nitrate fertiliser is used for raising crops. Nonetheless, it can be easily

adapted in order to render it explosive. In 2009, globalsecurity.org reported that ammonium nitrate

fertiliser is used to make about 95% of bombs in Afghanistan. 36 In 2005 this type of fertiliser was also

reported by the National Counter Terrorism Security Office (NaCTSO) of UK to have been used in a

number of terrorist bombings, including in Bali in 2002, Oklahoma City in 1995 and New York in 1993. 37

In 1996 victims and families of the victims of the April 1995 Oklahoma City bombing initiated legal

proceedings against ICI Explosives USA, Inc., alleging that it supplied "explosives grade" ammonium

nitrate used in the bombing, and of failing to add an ingredient to render it inert. The company

maintained the fertiliser was sold in the less volatile pellet form instead of a powder, and that it would

not have been possible to render it inert through the addition of other substances. 38 The case was

subsequently dismissed by the court.

Misuse of civilian products in a security or conflict context

A range of ostensibly civilian or dual-use products can be used in conflict and security enforcement

contexts to violate human rights. Dual-use products are goods, software or technology that can be

used for both civil and military applications. Although most developed countries have export controls

on certain types of dual-use products, some will not necessarily be subject to any export restrictions.

Common examples of misuse in this category include:

o Transport equipment (for example the use of civilian-spec vehicles by state actors toassist in security or military operations that result in human rights violations)

o Telecommunications equipment (for example the use of satellite telephone byillegitimate armed groups in remote areas to maintain operational integrity and to assist inoperations that result in human rights violations)

o Engineering equipment (for example the use of earth moving equipment to destroycivilian property)

o Other specialised electronic equipment (for example civilian satellite navigationequipment used by military forces to coordinate/enhance operations that result in human rights

violations)o Computer hardware or software used in manufacturing of military goods

Examples of the misuse of ostensibly civilian or dual-use items include the following:

o An electrical cattle prod is a handheld device commonly used to make cattle or other livestock move by administering a relatively high-voltage, low-current electric shock. However,there have been a number of reports alleging its use as a tool of torture. For example, on 28
http://www.globalsecurity.org/military/systems/munitions/explosives-anfo.htmhttp://www.globalsecurity.org/military/systems/munitions/explosives-anfo.htmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn36%23_ftn36http://www.secureyourfertiliser.gov.uk/threat.htmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn37%23_ftn37http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn38%23_ftn38http://www.globalsecurity.org/military/systems/munitions/explosives-anfo.htmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn36%23_ftn36http://www.secureyourfertiliser.gov.uk/threat.htmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn37%23_ftn37http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn38%23_ftn38


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April 2009, Human Rights Watch sent a letter 39 to the attention of the President of the UnitedArab Emirates, expressing concern about the torture of Mohammed Shah Poor allegedlycarried out by a member of the royal family police officials including the use of an electriccattle prod

o The use of Caterpillar D-9 bulldozers by Israeli military forces for the illegal demolition

of houses in Gaza, as described above, is a real example of the misuse of heavy engineeringequipment for illegitimate purposes. Caterpillar executive stated that the company "does notsell products to the government of Israel in sales that are not approved by the U.S.government." 40 However, according to the Palestinian Center , though the money used topurchase the bulldozers came from the US through Foreign Military Sales Financing, the factthat the sales are direct commercial sales by Caterpillar to the IDF was confirmed by a 23 May2005 letter from Matthew A. Reynolds, Acting Assistant Secretary for Legislative Affairs toCongressmen Jim McDermott 41

o A 2001 report of the International League for Human Rights (ILHR) entitled " ShadowReport on Algeria"[42] sheds light on the terrorist activities of the Islamist armed groups inAlgeria who for years controlled different parts of Algeria's territory. It is alleged, that the armedterrorist campaign was supported by satellite communication facilities that enabled operationalintegrity, among other things

o A total of 47 companies based in the US were mentioned in the April 1997 HumanRights Watch (HRW) Report " US Companies and the Production of Antipersonnel Mines "43 asmanufacturers of land mines and their component parts. This included companies such asLockheed Martin, GE and Motorola. Some of the companies, including GE and Motorola, weresimply manufacturing components, such as computer chips, integrated circuits and sensors,that another government contractor would then put together to make a mine or cluster weapon.Seventeen companies, including Motorola, informed HRW that they would no longer producecomponents for anti-personnel land mines

o In its 2007 Citizenship Report , GE noted that despite previous statements to thecontrary, one of its recently acquired business units GE Sensing & Inspection Technologies had been supplying a sensor for use by a US manufacturer of a next-generation' cluster weapon. These weapons had in turn been supplied to the US military. The sensor had originallybeen designed for use in cardiac diagnostic and corrective procedures and is in widespreadmedical use. GE noted that of more than 250 million sensors produced each year, only 15,000were used for cluster munitions. In light of the discovery of these sales, GE said it would notaccept any new orders for sensors to be used in cluster weapons and would not renew thecontract with the customer for this product. GE noted that the discovery of these saleshighlighted the data-gathering challenges faced by a company of its size and complexity 44

Examples of Emerging Economy Scenarios:Examples of scenarios companies might face when operating in emerging economies could be

different depending on a particular product, its potential uses and the human rights record of a given

country. The following are some examples which help to illustrate how to identify the risk of product

misuse in a particular country.
http://www.hrw.org/node/82751http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn39%23_ftn39http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn39%23_ftn39http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn40%23_ftn40http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn40%23_ftn40http://www.thejerusalemfund.org/ht/a/GetDocumentAction/i/2954http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn41%23_ftn41http://www.ilhr.org/ilhr/reports/shadow/index.htmlhttp://www.ilhr.org/ilhr/reports/shadow/index.htmlhttp://www.hrw.org/en/reports/1997/04/01/exposing-sourcehttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn43%23_ftn43http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn43%23_ftn43http://files.gecompany.com/gecom/citizenship/pdfs/GE_2007_citizen_07rep.pdfhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn44%23_ftn44http://www.hrw.org/node/82751http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn39%23_ftn39http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn40%23_ftn40http://www.thejerusalemfund.org/ht/a/GetDocumentAction/i/2954http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn41%23_ftn41http://www.ilhr.org/ilhr/reports/shadow/index.htmlhttp://www.ilhr.org/ilhr/reports/shadow/index.htmlhttp://www.hrw.org/en/reports/1997/04/01/exposing-sourcehttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn43%23_ftn43http://files.gecompany.com/gecom/citizenship/pdfs/GE_2007_citizen_07rep.pdfhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn44%23_ftn44


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Given that product misuse can happen in a very broad range of situations and can affect a wide range

of rights, the list of countries analysed below and the risks of product misuse considered under each

country headline are exemplary rather than exhaustive.

China: According to the US Department of State's 2009 Human Rights Report, the Chinese

government fails to respect the right to privacy, including of correspondence, and freedom of speech. It

monitors telephone conversations, fax transmissions, e-mails, text messages, and internet

communications. Human rights activists, journalists, unregistered religious figures and former political

prisoners are particular targets. During 2009 the government increased its efforts to monitor Internet

use, control content, restrict information, and block access to foreign and domestic Web sites. To that

end, the government launched the Golden Shield' project that used elaborated firewalls purchased

from Cisco.

Laws and regulations forbid the termination of pregnancies based on the sex of the foetus.

Nonetheless, the intersection of official birth limits with the traditional preference for male children,

particularly in rural areas, means many families use ultrasound technology to identify female foetuses

and terminate these pregnancies. GE has faced this challenge when selling its ultrasound technology

to end-users in China.

India: The law prohibits torture and generally does not allow authorities to admit coerced confessions

in court. However, NGOs and citizens allege that authorities use torture to extort money, as summary

punishment and to coerce confessions. The Asian Centre for Human Rights (ACHR) June report

Torture in India 2009 points out that "torture in police custody remains a widespread and systematic

practice in India." Amnesty International 2010 Report mentions numerous cases of misuse of wielding

lathis by the police to injure civilians. Considering this, there is a high risk that security equipmentintended for law enforcement and detention could be misused to inflict torture.

Indian women are subject to discriminatory practices and customs. According to the US Department of

State's 2009 Human Rights Report, female feticide continues to be an acute problem. Together with

extreme poverty, weak enforcement of laws, the availability of technology to detect the sex of an

unborn baby could facilitate the practice of female sex-selective abortions. GE has faced this

challenge when selling its ultrasound technology to end-users in India.

Iran: According to the US Department of State's 2009 Human Rights Report, the government's poor

human rights record degenerated during 2009. Although the constitution and law prohibit torture therewere numerous credible reports that security forces and prison personnel tortured detainees and

prisoners particularly after the presidential elections of 2009. The use of drugs during interrogations

to weaken the mental health of detainees was also reported. Taking this into account, the misuse of

security and law enforcement implements and/or neuroleptics for the purpose of inflicting torture or

other forms of ill-treatment could be a significant risk in Iran.
http://www.state.gov/g/drl/rls/hrrpt/2009/eap/135989.htmhttp://www.state.gov/g/drl/rls/hrrpt/2009/eap/135989.htmhttp://www.achrweb.org/reports/india/torture2009.pdfhttp://www.achrweb.org/reports/india/torture2009.pdfhttp://www.achrweb.org/reports/india/torture2009.pdfhttp://thereport.amnesty.org/sites/default/files/AIR2010_EN.pdfhttp://thereport.amnesty.org/sites/default/files/AIR2010_EN.pdfhttp://www.state.gov/g/drl/rls/hrrpt/2009/sca/136087.htmhttp://www.state.gov/g/drl/rls/hrrpt/2009/sca/136087.htmhttp://www.state.gov/g/drl/rls/hrrpt/2009/nea/136068.htmhttp://www.state.gov/g/drl/rls/hrrpt/2009/nea/136068.htmhttp://www.state.gov/g/drl/rls/hrrpt/2009/eap/135989.htmhttp://www.achrweb.org/reports/india/torture2009.pdfhttp://www.achrweb.org/reports/india/torture2009.pdfhttp://thereport.amnesty.org/sites/default/files/AIR2010_EN.pdfhttp://www.state.gov/g/drl/rls/hrrpt/2009/sca/136087.htmhttp://www.state.gov/g/drl/rls/hrrpt/2009/sca/136087.htmhttp://www.state.gov/g/drl/rls/hrrpt/2009/nea/136068.htm


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The government severely restricts the right to privacy and civil liberties, including freedom of

expression. Security forces monitor the social activities of citizens and telephone conversations. The

government also monitors Internet communications, especially via social networking sites such as

Facebook, Twitter and YouTube.

Russia: According to the US Department of State and Amnesty International, there are numerous,

credible reports that law enforcement personnel engaged in torture, abuse, and violence to coerce

confessions from suspects. Some of the methods were reported by in Amnesty International 2002

Report on the Russian Federation to have been carried out by misusing handcuffs.

The law prohibits arbitrary interference with privacy, including government monitoring of

correspondence, telephone conversations and other means of communication without a warrant.

However, according to the US Department of State's 2009 Human Rights Report there were

allegations that government officials and others engaged in electronic surveillance without judicial

permission. Considering the above-mentioned misuse of law enforcement equipment to inflict torture

and surveillance technology to intrude on rights to privacy, including freedom of expression and

correspondence, the sale of security enforcement products could pose a risk in Russia.

Risks to Business:

Legal risks

In general, MNCs are relatively unlikely to face primary legal liability for human rights violations arising

as a result of misuse of their products. This is due, for example, to:

o The fact that any harm will necessarily be committed by a third party

o Basic legal concepts that focus on the perpetrator rather than the objects used tocommit violations

o The multiple uses to which different products can be applied (i.e. both legitimate andillegitimate)

o The fact that companies will have generally complied with all legal requirementswhen selling their products

Where liability can still arise it could be generally one of the two types: civil or tort (for complicity in

inflicting damage resulting from a wrongful act) or criminal (where countries recognise the criminal

liability of companies, for complicity in the commission of a prohibited crime or an offence).

Where liability is imposed on companies, it can arise under national laws prohibiting the misuse of

particular goods, as liability may extend not only to the end-user but also to manufacturers and

distributors. For example:

o India and China have both outlawed the use of ultrasound for gender selectionabortions. In India, liability potentially extends to manufacturers and distributors. According to
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the Wall Street Journal , this allowed prosecutors in the city of Hyderabad in India to bring acriminal case against the GE joint venture with Wipro an Indian outsourcing partner of GE, aswell as Erbis Engineering Co., the medical-equipment distributor in India for Japan's ToshibaCorp. The district government alleged that the companies knowingly supplied ultrasoundmachines to clinics that weren't registered with the government and were illegally performing

sex-selection tests. The penalty is up to three months in prison and a fine of 1,000 rupees45

Some states have also committed themselves to imposing liability on sellers of products that can be

misused to engage in illegal activity as part of their international obligations. For example:

o Articles 6 and 11 of the Council of Europe Convention on Cybercrime of 2001 call onstates to criminalise the sale of devices that can be misused to interfere with confidentiality,integrity and the availability of computer data. Article 12 specifically calls on signatories to adoptlegislative measures to provide for corporate liability for committing offences covered by theConvention. It entered into force on 1 July 2004. As of 23 August 2010, 30 countries membersof the Council of Europe, among them Denmark, Finland, France, Germany and Norway, andUS have ratified it 46

o Articles 3, paragraph 1 (c) and 2 of 2002 Optional Protocol (OP) to the Convention onthe Rights of the Child on the sale of children, child prostitution and child pornography call oneach State party to ensure not only that producing, distributing, dissemination, importing,exporting, offering, selling or possessing child pornography are fully covered under its criminalor penal law, but also that the same shall apply to "complicity or participation" in any of thisacts. Where a signatory country has reflected this in its laws, it could arguably be possible for courts to impose liability not only on those who engage in child pornography, but alsomanufacturers and sellers of devices that facilitate access to images of child abuse. 139countries are parties to the Protocol, including Austria, Belgium, Canada, France, Germany, UKand the US 47

Companies can be found complicit in human rights violations committed by others by courts when theyknowingly assist or benefit from the human rights violations. The standard for knowledge could both be

an actual knowledge or what a company should have known' under the circumstances.

Most cases of complicity in human rights violations as a result of product misuse are likely to require

manufactures and sellers of products to anticipate reasonably foreseeable misuses of their products.

The degree of knowledge required from manufacturers and/or sellers is both an actual knowledge and

what a manufacturer and/or seller should have known under the circumstances given the country

context where the products are sold, the business relationships of the company, and the human rights

impact of the product itself.

Allegations of complicity will arguably be stronger when the product misused to inflict human rights

violations has a limited number of applications or is not widely circulated (but rather subject to a certain

export control or licensing criteria). For example, it would arguably be easier for the company to

identify the risk of special security equipment being misused to inflict torture rather than plastic pipes or

bottles, which are also commonly used by security officers and prison guards in emerging economies

as instruments for torture.
http://online.wsj.com/article/SB117683530238872926-LiU9GakeaOizutC66_h_JCWU_kA_20080418.html?mod=crnewshttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn45%23_ftn45http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn45%23_ftn45http://conventions.coe.int/Treaty/en/Treaties/Html/185.htmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn46%23_ftn46http://www2.ohchr.org/english/law/crc-sale.htmhttp://www2.ohchr.org/english/law/crc-sale.htmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn47%23_ftn47http://online.wsj.com/article/SB117683530238872926-LiU9GakeaOizutC66_h_JCWU_kA_20080418.html?mod=crnewshttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn45%23_ftn45http://conventions.coe.int/Treaty/en/Treaties/Html/185.htmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn46%23_ftn46http://www2.ohchr.org/english/law/crc-sale.htmhttp://www2.ohchr.org/english/law/crc-sale.htmhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn47%23_ftn47


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The case of Frans Van Anraat is an example where the risk of product misuse was foreseeable given

the potential uses of the product and the country to which it was sold. Frans Van Anraat supplied

chemicals to the Saddam Hussein regime in Iraq, which used them to produce mustard gas. A former

Japanese business partner of Van Anraat told the court that the manufacturers had alerted him to the

fact that the substances he was buying could be used to make poison gas. The gas was presumablyemployed in chemical attacks on Kurdish villages in Iraq during the 1980s. Van Anraat was found

guilty of complicity in war crimes in 2005 by the Hague District Court and was sentenced to 15 year

imprisonment. In 2007, the Appeal Chamber confirmed the decision of the District Court and

condemned Van Anraat to 17 years of imprisonment .48

Although arms are not covered by the scope of this dilemma, the case of Guus Van Kouwenhoven is

another good example of foreseeability of product misuse. Van Kouwenhoven, a Dutch timber trader

and president of the Oriental Trading Corporation (OTC), was suspected of smuggling arms to former

Liberian President Charles Taylor in exchange for logging rights. The arms were allegedly used by

Taylor to back militias in Sierra Leone that murdered, raped and tortured civilians during the country's

civil war from 1991 to 2001. In 2006, Van Kouwenhoven was convicted by a Dutch court for trading

weapons for logging rights in Liberia in breach of a UN arms embargo, but was acquitted for charges

of complicity in war crimes. He was sentenced to eight years in jail. His conviction is currently under

continued appeal. 49

Simply doing business in countries or places with poor human rights record is not generally considered

a strong basis for claims of complicity. This is especially due to the lack of the link of causation

between a particular business activity and a certain human rights violation.

However, where the company appears to profit from the misuse of its product i.e. because its misusecreates a significant sales market and where the violation of the human rights would not be possible

without this product (or at least to such an extent), this may substantiate allegations of company

complicity in those violations.

Generally, in most of the cases sellers will have neither control nor influence on the end-users or re-

sellers. Where business is carried on by means of a contract or a licence, however, there may emerge

a relationship of control over the end-user or an actor in a distribution chain. Where companies fail to

use this control to ensure against the risk of the product misuse by the purchaser or the risk of the

intermediary selling it to a controversial user, this could be used to substantiate the allegations of

company's complicity in the wrongdoing.

In addition, companies can engage in sales through their agencies or by operating a branch or a sales

subsidiary in a country where the products are sold. The control they have over that entity can make

allegations of complicity in the wrongful acts of that actor stronger or weaker. This can also increase or

decrease the exposure of the parent company to the legal risks created by the actions of its branch or

a sales subsidiary.
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For example:

o Where business is carried by means of an agency or a company branch or via acompany representative, their actions will be generally directly attributable to the parentcompany

o Where business is carried on by means of a sales subsidiary with a separate legalpersonality, a potential wrongdoing on the part of the purchaser would potentially result in thedirect liability of the sales subsidiary rather than the parent company

In some cases, however, this legal separation can be ignored to allow the liability of the sales

subsidiary to pass to the parent company. The criteria applied to allow for the liability to pass in such

way are subject to the practices of the national legal system of the home country of the company.

Though rare, legal liability could extend to cover both corporate liability and personal liability of

directors/managers of the company. The criteria applied to allow personal liability of directors are

subject to the practices of the national legal system of the home country of the company.

For example, UK courts are generally unwilling to allow liability for the acts of a company to pass to

managers or directors. However, in cases where the directors personally control the company and

induce its tortious acts, and where the company is really the vehicle for the director's personal acts, the

separation between the company as an entity and its directors could be ignored to allow personal

liability.50

In the case of Doe v. Unocal 5 1 filed under the US Alien Tort Claim Act case, the court noted as a

general principle that both corporations and their executive officers can be held responsible for

complicity in human rights violations. The suit was initiated by the Burmese villagers against Unocal

who alleged that Unocal was complicit in various human rights violations carried out by the Myanmar Military, including forced labour, murder, rape, and torture, in connection with the Yadana gas pipeline

project.

Reputational risks

Even where companies do not face legal action, allegations of complicity can still expose them to a

range of negative impacts.

Risks can be of a short-term nature (e.g. operational disruptions as a result of refusals to continue

supplying the products to particular countries or end-users due to allegations of their misuse) or causeextended difficulties (e.g. shareholder pressure resulting in the review of the company's strategy or

sales policy).

Such risks can include:

o Consumer initiated boycotts resulting in reduced sales
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o Divestment by ethical and mainstream investors resulting in reduced access tocapital

o Negative press and activist campaigns resulting in brand erosion

o Loss of social licence to operate resulting in community animosity and higher costs

o Loss of political licence to operate resulting in non-cooperation by the governmentand diminished future business opportunities

A prime example of the risk of legal proceedings spurring bad publicity and consumer boycotts, even

when those proceedings are discontinued or get settled out of court, can be found in campaigns

launched against US-based company Caterpillar. The company was accused of selling bulldozers to

Israel knowing that they were being used to destroy Palestinian homes. According to the report of the

Palestinian Center " War Crimes Litigation in U.S. Courts: The Caterpillar Case ",52 these home

demolitions were in violation of national and international law. The tort claim against Caterpillar in the

United States and later another civil lawsuit , this time against the Israeli Defence Ministry, have

attracted attention and caused public outrage. The fact that the US government provided funding for

the purchase of Caterpillar bulldozers by Israel pre-empted the jurisdiction of the US court to decide on

the merits of the case. The civil lawsuit is still in progress.

Different campaigns have been initiated against the company, including those by the Palestinian

Grassroots Anti-Apartheid Wall Campaign 53 and the HRW and AI supported consumer boycott of

Caterpillar goods .54

Likewise, in 2009, Nokia Siemens Network was subject to a consumer boycott in Iran following

accusations, including by Nobel prize-winner Shirin Ebadi 55, that it supplied the Iranian government with

software and technology used to monitor mobile telephone calls and text messages in the aftermath of the contested 2009 election. A press release 56 by the company stated that it provided lawful intercept

capability solely for the monitoring of local voice calls in Iran.

Activism and adverse publicity campaigns can result in lower share prices, as seems to have

happened in the case of Caterpillar, according to the Grassroots Palestinian Anti-Apartheid Wall

Campaign .57

Likewise, the case of Cisco's, where it was alleged that the company's software was misused in China

to impede the freedom of expression, shows how concern about share value as well as ethical

concerns may result in disinvestment by ethical and mainstream investors. Ahead of Cisco System'sAnnual General Meeting in November 2009, a group of 17 investors representing over 24 million

shares (US$580 million) used a shareholder proposal ,58 led by Boston Common Asset Management, to

urge the company to adequately manage human rights related risks in its operations The move,

introduced for a fifth successive year, was partly prompted by the fact that Cisco's general counsel has

been called on two occasions to testify before the US Congress to describe the company's allegedrole

in limiting freedom of expression in China (where it has investments of US$16 billion) and elsewhere.
http://www.thejerusalemfund.org/ht/a/GetDocumentAction/i/2954http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn52%23_ftn52http://www.thejerusalemfund.org/ht/a/GetDocumentAction/i/2954http://www.thejerusalemfund.org/ht/a/GetDocumentAction/i/2954http://www.cat.com/about-ushttp://talestotell.wordpress.com/2010/03/16/march-10-israel-civil-case-on-rachels-killing/http://stopthewall.org/cgi-bin/engine/exec/view.cgi/1/903http://stopthewall.org/cgi-bin/engine/exec/view.cgi/1/903http://stopthewall.org/cgi-bin/engine/exec/view.cgi/1/903http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn53%23_ftn53http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn53%23_ftn53http://www.ngo-monitor.org/article.php?id=527http://www.ngo-monitor.org/article.php?id=527http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn54%23_ftn54http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn54%23_ftn54http://www.techeye.net/business/nokia-siemens-hinder-iranian-human-rights-says-nobel-winnerhttp://www.techeye.net/business/nokia-siemens-hinder-iranian-human-rights-says-nobel-winnerhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn55%23_ftn55http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn55%23_ftn55http://www.nokiasiemensnetworks.com/press/press-releases/provision-lawful-intercept-capability-iranhttp://www.nokiasiemensnetworks.com/press/press-releases/provision-lawful-intercept-capability-iranhttp://www.nokiasiemensnetworks.com/press/press-releases/provision-lawful-intercept-capability-iranhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn56%23_ftn56http://stopthewall.org/cgi-bin/engine/exec/view.cgi/1/903http://stopthewall.org/cgi-bin/engine/exec/view.cgi/1/903http://stopthewall.org/cgi-bin/engine/exec/view.cgi/1/903http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn57%23_ftn57http://www.bostoncommonasset.com/news/cisco111009.htmlhttp://www.bostoncommonasset.com/news/cisco111009.htmlhttp://www.bostoncommonasset.com/news/cisco111009.htmlhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn58%23_ftn58http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn58%23_ftn58http://www.thejerusalemfund.org/ht/a/GetDocumentAction/i/2954http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn52%23_ftn52http://www.thejerusalemfund.org/ht/a/GetDocumentAction/i/2954http://www.cat.com/about-ushttp://talestotell.wordpress.com/2010/03/16/march-10-israel-civil-case-on-rachels-killing/http://stopthewall.org/cgi-bin/engine/exec/view.cgi/1/903http://stopthewall.org/cgi-bin/engine/exec/view.cgi/1/903http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn53%23_ftn53http://www.ngo-monitor.org/article.php?id=527http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn54%23_ftn54http://www.techeye.net/business/nokia-siemens-hinder-iranian-human-rights-says-nobel-winnerhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn55%23_ftn55http://www.nokiasiemensnetworks.com/press/press-releases/provision-lawful-intercept-capability-iranhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn56%23_ftn56http://stopthewall.org/cgi-bin/engine/exec/view.cgi/1/903http://stopthewall.org/cgi-bin/engine/exec/view.cgi/1/903http://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn57%23_ftn57http://www.bostoncommonasset.com/news/cisco111009.htmlhttp://human-rights.unglobalcompact.org/dilemmas/product-misuse/#_ftn58%23_ftn58


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Suggestions for Responsible Business:

Business has a responsibility, according to the UN's the "Protect, Respect and Remedy" policy

framework 59 ("the framework"), to respect all human rights. To meet its responsibility to respect human

rights, the framework states that a responsible company should engage in human rights due diligence 60

to the level commensurate with the risk of infringements posed by the country context in which a

company operates, its own business activities and the relationships associated with those activities. 61

The UN has further adopted a draft of the Guiding Principles for the Implementation of the UN "Protect,

Respect and Remedy" Framework .62 These aim to provide "concrete and practical recommendations"

for the framework's implementation. The draft Guiding Principles document has recently been posted

for public review until 31 January 2011.

The framework, as clarified by the draft Guiding Principles document specifies the main components of

human rights due diligence:o A statement of policy articulating the company's commitment to respect human

rights and providing guidance as to the specific actions to be taken to give thiscommitment meaning: This policy should be informed by appropriate internal and externalexpertise and identify what the company expects of its personnel and business partners. Thepolicy should be approved at the most senior level and communicated internally and externallyto all personnel, business partners and relevant stakeholders. In addition, it should be reflectedin appropriate operational policies and procedures

o Periodic assessment of actual and potential human rights impacts of company

activities and relationships: Human rights due diligence will vary in scope and complexityaccording to the size of a company, the severity of its human rights risks and the context of itsoperations. Impact assessment must be continuous, recognising that human rights risks maychange over time as companies' operations and operating contexts evolve. The process shoulddraw on internal and external human rights experts and resources. Furthermore, it shouldinvolve meaningful engagement with potentially affected individuals and groups as well as other relevant stakeholders

o Integration of these commitments into internal control and oversight systems:

Effective integration requires responsibility for addressing such impacts to be assigned to theappropriate level and function. It also requires appropriate internal decision-makingmechanisms, budget allocation and oversight processes

o Tracking of performance: Tracking of performance should be based on appropriate

qualitative and quantitative metrics and should draw on feedback from both internal andexternal stakeholders. In addition, it should inform and support continuous improvement

o Public and regular reporting on performance: When reporting, companies shouldtake into account the risks the communication of certain information may pose to stakeholdersthemselves, or to company personnel. In addition the content of the reports should be subjectto the legitimate requirements of commercial confidentiality
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o Remediation: Where business enterprises identify responsibility for adverse impacts,they should provide for or cooperate in their remediation through legitimate processes

The UN Global Compact has also developed a Self Assessment Tool on Product Stewardship to assist

companies to confront the challenges that may arise in process of producing and marketing goods with

adverse effects on human rights. The tool consists of a number of questions that companies areinvited to answer to improve existing policies and systems, build staff awareness, engage subsidiaries,

suppliers or other stakeholders, improve internal and external reporting. This could guide companies

as to the actions to be taken to prevent and/or mitigate the risk of the product misuse.

As a result actions for responsible business might include:

1. Adopting a product misuse policy

To prevent or mitigate the risk of product misuse a company could consider establishing a specific

product misuse policy committing the company to, for example:

o Abide by relevant national laws

o Where national laws are below international standards to follow higher internationalstandards

o Design products (where practicable) in such a way that their misuse is minimised

o Carry out due diligence on customers to a degree that is commensurate to the risk of misuse

o Where appropriate, carry out an assessment of the impact of the product, thecompany's commercial relationships and the context in which products are to be used

o Where appropriate, use terms of sale to maintain a degree of control over the use of a product

o Where practicable, provide for ongoing monitoring of the product's use

o Address complaints of the product misuse as they arise

o Regularly review the policy and supporting procedures as prompted by new concerns

As an alternative, companies might consider incorporating clauses to deal with product misuse (as

described above), in their pre-existing human rights policy. Any policy aimed at addressing product

misuse should be supported by relevant implementation mechanisms to ensure that its provis

Documents

Human Rights and Business Dilemma