Blog post by Francis Agbere (Oxfam Ghana)
Tuesday 28 March 2023
Except a handful of countries such as Kenya, Uganda and Nigeria, there is hardly any functioning plan grounded in the United Nation’s Guiding Principles on Business and Human Rights (UNGPs) on the continent. Ghana is currently in the early phases of setting up its framework which is even more why the timing is relevant to this briefing. While this effort may be deemed relatively late, strategically, it is progressive, and I share in this effort by Ghana for several reasons.
Firstly, Ghana hosts the Africa Continental Free Trade Area (AfCFTA) secretariat and owes it more to the continent to make progress in framing a UNGP-focused policy environment for business and human rights so that trade can thrive in a responsible environment. Ghana’s 1992 constitution under the directive principles of state policy, enjoins the state to protect and promote all forms of basic human rights; the discharge of which must be guided by international human rights instruments such as the African Charter of People and Human Rights and the like. One other and perhaps the most recent imperative is that Ghana’s trading partners such as the European Union continue to prioritize sustainability due diligence rules, the compliance of which are stringent by the day and increasingly focus on principles of business and human rights. I frame my thoughts on these briefly in the ensuing texts.
I daresay that the success of the AfCFTA will very much depend on domesticating the UNGPs and corporate governance, central to which are policy and practice standards on business and trade. What comes to mind immediately then is the need for Ghana as host to have an efficient and well enforced Business and Human Rights framework which will set out clear rules, guidelines and enforcement regimes for responsible corporate governance. It is the reason INGOs have played a collaborative role in shaping the space.
Here I note Oxfam in Ghana’s collaboration with Commission for Human Rights and Administrative Justice (CHRAJ) on the ongoing consultations to set up a national action plan for Ghana. On this, Oxfam is proud to be of support first, in the baseline process and now, as a representative to the national steering committee for the action plan and regional consultations across the country. I would imagine that for such a rights-based policy, there is a responsibility on all stakeholders including trading partners. This launches my second point that a functioning business and human rights policy regime is not only about the hosting role Ghana plays within the AfCFTA framework; it is also about responding to trends on corporate sustainability which our major trading partners and indeed the world, have prioritized. The European Union (EU) is one of such partners having imported up to €2 billion of goods in 2021 alone from Ghana.
One could argue that perhaps the EU is taking cue from a global trend which has seen an increase in investments in sustainability to $35.3 trillion in 2020 or responding to the demands of its consumers. Either way, this development is changing the conduct of business. The EU initiated a global directive on sustainability to ensure ethical and alternative business ecosystems that are deforestation-free. Interestingly, compliance to these directives is mainly effective January, 2023 and Ghana could find itself in a tussle with the EU on its major commodities such as Cocoa, the second highest income earner after minerals, if care is not taken.
Ghana has been there before when in 2015 Ghanaian vegetables suffered a ban in the EU market because of non-compliance to EU phytosanitary legislation and should rouse anyone’s memory of the risks of non-compliance. If history is a good Teacher, then Ghana must be a good student. The ongoing consultations on its policy framework on Business and Human Rights (BHR) have set a tone that appears to manage the potential risks of non-compliance. For instance, a stronger oversight role is planned and expected of private sector company Directors and boards. Another critical observation is that the consultations pivot a stringent rating regime that ensures that private sector companies are assessed and ranked based on compliance to sustainability efforts.
There is a tricky side to all of this which is: compliance to sustainability is not only an ethical issue; it is a poverty issue as argued by the world’s biggest cocoa producers, Ghana and Cote D’Ivoire. In part, low farmer incomes, is the reason these countries demand more from big cocoa multinationals if value chain sustainability is to be enhanced. Together the two countries account for about 60% of the global cocoa supply and have been asking for decent pricing and living wages for farmers. They made some progress in this regard, securing a deal with companies for a living income differential of US$400 per ton of cocoa produced. But there is a lot more that needs to happen to support farmer incomes as a livelihood and rights issue. In one of my papers titled ‘Small holder farmers should take their rightful place in agricultural value chains’, I discuss more about that.
Having said the above, I firmly believe that any such effort to introduce deliberate policy and plan as Ghana is doing now on business and human rights and compliance to sustainability, looks beyond the veil and consider the following:
Extractive Sector: Mining & Petroleum
- By far one of the sectors with advanced global efforts for enhanced governance practices is this sector. The Extractive Industry Transparency Initiative, Open Government Partnership, Kimberly process are but a few measures. While implementation of these and national laws have been quite sketchy, they have helped steel accountability. it is important that Ghana learns from the central theme of accountability in these processes and articulates similar in the National Action Plan. But most importantly, citizens in jurisdictions where EU companies conduct business should not only have the opportunity to seek redress in a court of competent jurisdiction as provided for in the EU sustainability directives, but should be resourced to do that. Proposals for a legal aid fund of some sort specially-designed to be accessible for all vulnerable groups including Persons with disability and women should be adopted to deal with potential land compensation, environmental destruction, and resettlement issues etc. Ghana can take cue from the Dutch National Action Plan on Business and Human Rights.
- Ghana consolidated its beneficial ownership legislations through the Companies Act, 2019 (Act,992). This law puts responsibility on companies to maintain records of true owners of companies doing business on Ghanaian soil. The aim is to enhance transparency and limit illicit activities that are potentially corrupt and abrasive to human rights directly and indirectly. Institutional coordination and information sharing provisions must be introduced in the proposed business and human rights action plan for Ghana. This will strengthen enforcement between the Registrar General’s Department with mandate to enforce Act 992 and the Commission for Human Rights and Administrative Justice (CHRAJ) with mandate to execute the proposed Business and Human Rights Action Plan.
- Second most important revenue source for government of Ghana after minerals is cocoa. But farmers have benefitted less by way of wages. For sustainability schemes to thrive, achieving a living income for farmers is arguably one of the surest ways. In a recent Oxfam study on living incomes in Ghana, it is revealed that sustainability strategies of selected cocoa multinationals do not deliberately mainstream living incomes for farmers in their income strategies. Consequently, up to 65% of farmers benefiting from company sustainability programmes had incomes failing to appreciate although they received premiums. Thus, the national action plan should strongly consider living incomes and gender mainstreaming as strong pillars in the reporting and investment activities of companies in Ghana.
The United Nations General Assembly (UNGA) affirmed a clean, healthy, safe and sustainable environment as a human right for the first time in July, 2022 effectively pushing the limits of sustainability further. To give voice and meaning to this, Ghana’s ongoing consultations must reflect this in the requirements for company boards and Chief Executive Officers to report on as part of their risk management priorities. Special attention must be placed on industries with huge environmental risks such as for mining, petroleum and agriculture.
It remains much to see what happens from 2023 and ahead on human rights governance vis-à-vis corporate governance, trade and sustainability. As a thematic enthusiast in the extractives and agriculture sectors, I am convinced that both government and private sector have a role to play and the time is now.