One may ask why, in this day and age of overzealous neoliberalism, does one expect moral housekeeping from multinational enterprises when there exists abundant evidence to negate such an expectation? To that effect, India published its Draft National Action Plan on Business and Human Rights in 2019, which is third among a set of guidelines that is meant to convey India’s willingness to accord corporate accountability and due diligence to human rights throughout supply chains. This follows the National Voluntary Guidelines on the Social, Environmental and Economic Responsibilities of Business in 2011, which were replaced by a marginally updated version of the same document now known as the National Guidelines on Regulation on Business Conduct.
However, the entire situation is a classic case of missing the woods for the trees. What is common to all three is their discretionary — as opposed to obligatory — nature in contrast to countries like Germany, France and Norway that have attempted to legislatively minimise the adverse environmental and social impacts that MNEs leave in their wake. With the European Union having passed the Corporate Sustainability Due Diligence Directive, the question that arises is whether this watershed moment with regard to regulatory compliance for MNEs is an opportune time for India to revisit its dormant NAP on BHR.
With cheap labour, abundant natural resources and low production costs, India now ranks 63 on the Ease of Doing Business Economy Rankings. Painting a disturbingly vivid picture of the vicious cycle of debt and physically debilitating jobs that provide a bare minimum income, an exposé by The New York Times claimed that out of “82,000 female sugar-cane workers in Beed [Maharashtra], roughly 20% had undergone hysterectomies.” Most of the women were employed by entities who supplied sugarcane to giants like Coca-Cola.
The Sivakasi region in Tamil Nadu has been infamous for the use of child labour in the production of firecrackers. Some reports claim the children employed have lost their fingernails while handling explosive substances without any protective gear. The latest report by a Standing Committee on Labour, Textiles and Skill Development presented before Parliament in 2023 found “one crore working children in the age bracket of 5-15 years”.
In 2004, Hindustan Coca-Cola Beverages Pvt Ltd was forced to initially halt and, then, permanently shut down its operations in Plachimada, Kerala, after its residents protested against land pollution and water contamination by the company. The Kerala state assembly passed a bill that mandated the establishment of a specialised tribunal to claim compensation of Rs 216.25 crore from Coca-Cola, but this was opposed by the Central government on the grounds that the state government had exceeded its jurisdiction by instituting a tribunal.
An interesting argument can be made about the dual role played by the Indian State. On one hand, India has made its stance clear by attracting MNEs to invest and establish manufacturing units through the Make in India scheme that has already garnered investments from Korean, Chinese and French giants like SAIC Motors, Kia and PSA. On the other end of the spectrum lies India’s role as a welfare State to protect, remedy and prevent human rights violations, a duty prescribed by the Constitution.
Accountability and enforcement of the law are the twin pillars that form the fulcrum of all remedy-oriented mechanisms intended to penalise a wrong. In its current form, the draft NAP pivots on the ‘expectation’ that companies would carry out human rights compliances. The draft NAP projects an ethical outlook instead of arguing that corporate human rights abuses trigger a non-negotiable, legal responsibility attributable to the company. Cleaning the supply chain has a cost that must be borne by businesses. Failing to do so must carry some punitive measures. Else, the law would fail to regulate corporate conduct.
Aaliya Waziri is an advocate at the Delhi High Court and author of In The Body Of A Woman: Essays on Law, Gender and Society
