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A PARTNER AFRICA CASE STUDY

FiftyEight & Partner Africa: Emerging Market Perspectives on Business and Human Rights Measures and Economic Development

"Local companies will either risk being cut out of European markets, as they are struggling to keep up with existing and upcoming requirements from both certifications and legislation."

About the project

This research, commissioned by the FCDO, was independently delivered by FiftyEight, an organisation working to address exploitation in supply chains, with local research partners, Partner Africa in Kenya and Ghana, and River Inc in the DRC. The research sought to understand potential challenges, opportunities and unintended consequences of business and human rights measures in global supply chains. Measures in scope included voluntary standards – such as the United Nations Guiding Principles on Business and Human Rights (UNGPs) and OECD guidelines and guidance – existing and upcoming legislation from across the globe, including the EU Corporate Sustainability Due Diligence Directive (CSDDD), and relevant certifications.

As part of this project, Partner Africa was commissioned to identify the impact of business and human rights legislation and other measures on local stakeholders, mainly producers and suppliers, in Kenya and Ghana. Partner Africa’s work has focused specifically on the tea, horticulture, floriculture and coffee sectors in Kenya and the cocoa, cashew, and apparel sectors in Ghana.

Signals from businesses suggest these measures can be a powerful tool in ensuring human rights are respected across global supply chains. However, stakeholders in Emerging Markets and Developing Economies (EMDEs) could be negatively impacted by these measures. For instance, international buyers may be discouraged from investing, financing, sourcing, and expanding in new territories due to fear of reputational damages, legal consequences, customs restrictions, and other administrative burdens.

Through desk-based research and 57 stakeholder interviews, with over 70 interviewees from Kenya and Ghana, Partner Africa mapped out the local impacts – including unintended consequences – of business and human rights measures. Partner Africa also looked at the challenges and opportunities of aligning local legislation, policy and business responses with international standards stemming from these measures.

Business and human rights measures have positive impacts on livelihoods and efficiency

The research found that business and human rights measures can have a positive impact, particularly by improving workers’ livelihoods and increasing efficiency. Interviewees said, for example, that they were able to build better relationships with their employees, and in turn gain a competitive advantage when accessing markets and buyers – as buyers, particularly in Europe, will require them to show compliance with at least certain certifications and legislation covering human rights.

Business and human rights measures do not account for implementation at the local level

Local producers and suppliers struggle with ensuring they comply with these measures, or simply with showing their compliance. According to almost all interviewees, local businesses need to show increased compliance with human rights standards stemming not only from certification but also from new and developing legislation.

Local stakeholders reported that they want to comply with these measures, but struggle to do so for two main reasons: first, buyers often share requirements but no financial and/or technical support, meaning local businesses know they are supposed to comply with new standards, but do not know how to undertake this in practice. However, this is not always the case, and additional technical support is sometimes provided by civil society or industry organisations. Second, local businesses face growing costs for compliance, which they argue is not sustainable in the long run.

For example:

  • Stakeholders are concerned over the impact of deforestation regulations such as the EU Deforestation Regulation (EUDR) and the UK Forest Risk Commodities regulation – as they have difficulties understanding what the law requires and currently have few systems in place to show compliance. Of particular concern was the requirement of geolocation.
  • Local companies fear reporting non-compliance to human rights standards, as they feel that international companies prefer to disengage, or generally avoid sourcing from at-risk areas (such as conflict-affected and high-risk areas).
  • Producers want to receive premiums for compliance. By paying higher prices for products that are produced ethically, local businesses can ensure they have the financial means to comply, as well as to improve workers’ and communities’ livelihoods.
  • Human rights requirements do not take into consideration local contexts. For example, some stakeholders flagged that producers often do not own the land they work on, which can make long-term investment into putting structures in place for compliance difficult.
As a result, almost all interviewed stakeholders flagged that local companies will either risk being cut out of European markets, as they are struggling to keep up with existing and upcoming requirements from both certifications and legislation. A few stakeholders flagged businesses are already looking into alternative markets, particularly in Asia, with less strict business and human rights requirements.

Partner Africa’s recommendations

Based on these findings, Partner Africa identified several recommendations for local companies and international buyers, local and other governments. The report and full recommendations can be accessed here.

To local companies, Partner Africa recommended:

  • investing in putting in place policies and processes to show human rights issues are tracked and addressed throughout operations
  • aiming to build direct relationships with buyers
  • engaging with workers
  • looking for support at the local level.

To international buyers, Partner Africa recommended:

  • getting ready to pay higher prices for products
  • building direct relationships with suppliers
  • ensuring ethical disengagement is the last resort
  • engaging with industry and other initiatives.

To local goverments, Partner Africa recommended:

  • strengthening local laws
  • helping local companies with capacity-building
  • working with other governments.

To other governments, Partner Africa recommended:

  • engaging with local stakeholders
  • providing support through funding
  • sharing knowledge.

COMMENT FROM FIFTYEIGHT:

“Partner Africa were exceptional to work with, providing deep knowledge and expertise along with being great communicators, highly responsive, and producing strong results against the brief. Their network and insights from their experience working with a range of sectors and companies were invaluable – particularly their understanding of and ability to articulate the perspectives of buyers, suppliers and others along the value chain.”

"Local stakeholders reported that they want to comply with these measures, but struggle to do so for two main reasons: first, buyers often share requirements but no financial and/or technical support, meaning local businesses know they are supposed to comply with new standards, but do not know how to undertake this in practice."

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