Posted: 17 Jun. 2020

Business and human rights dilemmas in the midst of COVID-19

A guide for senior executives in New Zealand - June 2020

New Zealand and COVID-19

The COVID-19 pandemic has catapulted the world into an unprecedented crisis. At its heart, the pandemic is a human tragedy, sadly with loss of life. New Zealand was one of the countries that was hit the latest with the virus outbreak and lessons learnt from other countries overseas were applied. The country used strict measures to protect its people from the deadly disease and placed the protection of the individual life at the highest priority. With the government’s quick response and measures of complete lockdown, New Zealand can now operate freely in its own bubble.

Nevertheless, Covid-19 and its effects are expected to be felt for many years to come. The Organisation for Economic Co-operation and Development released a report in June in which New Zealand was listed one of the countries most hit by COVID-19 with an estimated drop of almost 30% in activity (compared to US with 25%, Australia with 22% and Ireland with 15%).

Human rights most impacted by business during COVID-19 (non-exhaustive)

— Right to life

— Right to health

— Right to equality and non-discrimination  

— Right to education

— Right to freedom of movement and

— Liberty

— Right to work and enjoy just and favourable conditions of work

— Right not to be subjected to slavery, servitude or forced labour

— Right to privacy and confidentiality


Human rights at risk in the crisis

The UN Guiding Principles on Business and Human Rights (UNGPs) state that businesses should ‘avoid causing or contributing to human rights impacts’ but also ’seek to prevent or mitigate impacts directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts’. COVID-19 is challenging businesses to keep people healthy and safe while maintaining continuous operations globally. Leaders are being tested in their commitment to respect human rights and turning these principles into effective policies and processes.

Efforts to combat the spread of COVID-19 have resulted in severe restrictions of many human rights. This creates a new and very different operating context for businesses.  The Deloitte Global Community of Practice on Business and Human Rights has recently published this report about the dilemmas companies have faced to protect the human rights from their employees, and other stakeholders. In New Zealand, we see the following human rights most at risk of being adversely impacted by the COVID-19 crisis.

Protecting the right to life and right to health has become a central priority. One dilemma for businesses is how to strike the right balance between keeping people healthy and safe while maintaining operations. While some businesses have been faced with the challenge of keeping people safe while working from home and protecting their mental health and safety, others have been required to protect essential workers from potential infections from the virus.

A further dilemma facing business leaders is how to abide by the lockdown regulations while ensuring employees are not left behind, particularly those for whom the workplace is a safe haven. There is a ‘crisis within a crisis’ for vulnerable adults and children isolated in coercive or violent households, unable or afraid to access services due to scaled down service delivery or fear of infection. For vulnerable people, restrictions on the right to freedom of movement can have grave consequences for their personal safety, mental health and wellbeing. The lockdown has prompted many business leaders to consider the personal situation of their employees.

Businesses have a responsibility to respect the right to work, including just and favourable conditions of work. COVID-19 has forced many leaders to face challenges in maintaining employment security while also managing cash flow; adapting to remote working while also ensuring productivity; asking people to adapt to increased business pressures while also respecting wellbeing. Approaching these rights in a non-discriminatory manner is critical to ensure that inequalities are not magnified by the crisis.

Looking beyond direct employees, business leaders are also considering the impact of decisions on workers throughout the supply chain. Cancellations, delays in order payments, as well as new demand, can have enormous repercussions for suppliers, often affecting the most vulnerable workers. A supply chain in demand will likely require forced overtime, whereas those with stoppages will likely face unpaid wages. The disruption and economic uncertainty facing workers may lead to an increase in labour exploitation and conditions of slavery, servitude or forced labour.

The crisis is also accelerating questions around the right to privacy and confidentiality with the increase of personal surveillance for contact tracing purposes and ‘check-in’ tools for employees. It is important that these mechanisms are not extended beyond necessity. Furthermore, with businesses being forced to rapidly increase their use of digital capabilities, this brings another set of challenges in relation to online privacy and cyber attacks.

Prioritising human rights in a crisis

The March 2020 Trust Barometer from Edelman showed that stakeholders are paying increased attention to how businesses act during the COVID-19 crisis. 71% stated that “Brands and companies placing their profits before people during this crisis will lose my trust forever.”

This challenges all business leaders to ask these three questions:

· What are we doing to prevent adverse human rights impacts during the COVID-19 crisis?

· What are we doing to mitigate and/or solve them?

· How can we proactively respect and promote human rights?

For most businesses, a typical crisis plays out over three timeframes: Respond, where the business deals with the present situation and manages to continue; Recover, in which a business learns and emerges stronger; and Thrive, during which a business prepares for and shapes a ‘new normal’.

Each phase presents different types of human rights dilemmas for business.


Phase 1: Respond

Faced with the rapid changes and uncertainties caused by the COVID-19 pandemic, New Zealand businesses have been faced with competing priorities in their initial response.

As the pandemic continues, many are seeking assurance that business leaders are navigating these dilemmas responsibly. By formalising a human rights-based approach to decision-making during this first ‘Respond’ stage, New Zealand businesses can better understand different stakeholders’ views as well as the consequences of certain decisions. This approach can help build trust with multiple stakeholders and further catalyse the recovery.

One dilemma New Zealand businesses have been faced with is how to respond to the option to apply for the government’s subsidy fund - when was it deemed ethical to apply, and what was deemed ethical use of the funding received?


Phase 2: Recover

As businesses move beyond the immediate response to the pandemic, they’ll begin to prepare for recovery.

This phase is where New Zealand businesses should take a close look at the human rights impacts in their operations and supply chains and implement appropriate responses aligning to the recommendations of the UNGPs and to regulatory requirements like the Australian Modern Slavery Act. This can be done by, for example:

- Conducting human rights risk assessment

- Developing a roadmap

- Building capacity

- Monitoring, compliance and performance

- Reporting on performance

The COVID-19 pandemic challenges NZ business leaders to prepare for a new, complex and uncertain future. The decisions made during their crisis recovery phase will help determine how the business is sustained in the long-term. This could be seizing the opportunity to tackle discrimination in the workplace, to creating a family-friendly workplace culture and integrating mental health and wellbeing into health and safety practices. It could also include adapting to more ethical sourcing practices, or guiding the enhancement of data protection procedures to ensure the correct use and storage of personal data.


Phase 3: Thrive

At a certain point, most New Zealand businesses that have managed to recover will find themselves preparing to settle into a ‘new normal’. The crisis will have revealed fault lines that lay out the limits of traditional thinking, particularly when it comes to human rights. For example, the COVID-19 crisis has made it more obvious how hyper-connected the world is and how deep inequalities are, and likely will continue to be unless we adapt to the new social contract that is emerging.

As New Zealand businesses enter the final stage of the crisis, they should seek to build resilience for future disruptions with a human rights lens. Specifically, they can:

- Establish regular due diligence and stakeholder engagement

- Embed human rights into business culture and risk management

- Use a human rights lens to identify business opportunities and innovations

- Further embed human rights into sustainability strategies

- Apply a long-term lens to consider human rights impacts

Get in touch

Ian Tuke

Ian Tuke

Partner - Forensics

The term financial crime may sound a bit dramatic for a professional services environment, but that’s exactly what our team of 35 forensic practitioners within Risk Advisory spend their time on. I get a big kick out of coordinating our firm’s resources to help clients respond when they discover someone has crossed ethical lines, and help them better understand their own financial crime blind spots.

Monika Wakeman

Monika Wakeman

Director - Risk Advisory, Climate & Sustainability

I have worked globally in our Sustainability practice and have provided services to clients through a holistic view on sustainability. I bring forward the challenges and solutions for industry requirements to design and implement sustainability related initiatives. I am experienced in conducting various sustainability monitoring and measurement for reporting and bring a view regarding the risk management of effective monitoring and measurement. I also lead our Health, Safety and Wellbeing service and am experienced in integrating social and environmental requirements in reporting.

Marrit Mulder

Marrit Mulder

Manager - Corporate Responsibility

I work as a Manager in the Corporate Responsibiltiy team at Deloitte New Zealand. I love working closely with organisations to understand and address social and environmental impacts. My background is in creatively designing, implementing and assessing end to end sustainability and ethics strategies and programmes, including culture, human rights, modern slavery and climate change.