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Accounting for human rights

The Accounting Auditing and Accountability Journal (AAAJ) has published a special issue entitled The Past, The Present and The Future of Social Accounting for Human Rights co-edited by Ken McPhail, Professor of Accounting at Alliance MBS.

The study of business and human rights has become a rapidly emerging field since the United Nations endorsed the so-called ‘Guiding Principles’ on Business and Human Rights in 2011.
The first principle re-affirms that nation states are the primary duty-bearers under international human rights law and requires them to have effective laws and regulations in place to address business and human rights related issues. The second stipulates that corporations have a responsibility to respect rights that is independent of the states’ obligations, while the third stresses the need for both judicial and non-judicial access to remedy where rights have been violated.

The Principles represent a significant shift in the organisational and institutional context within which accounting operates, such that accounting will both shape and be shaped by the requirement for companies to take on a responsibility for human rights. As well as contributions from Prof McPhail, the issue also features a joint paper from Alliance MBS academics Dr Noemi Sinkovics, Lecturer in International Business and Management, PGR student Samia Hoque, and Rudolf Sinkovics, Professor of International Business.

Their study looks at the Rana Plaza disaster in Bangladesh in 2013 in which more than 1,000 people were killed when a garments factory collapsed. Drawing on case studies of three medium-sized suppliers in the garment manufacturing sector, the paper sets out to investigate the intended and unintended consequences of compliance and auditing reforms that followed the accident. The paper shows how the pressure for compliance has resulted in the prioritisation of measurable standards to the detriment of the socially-grounded needs of workers. As Dr Sinkovics explains: “With these three companies, the primary motivation for the adoption of CSR standards was the hope that they could increase their competitiveness and attract more buyers. Although compliance has had some positive benefits in terms of improved working conditions, due to the lack of resources the firms were not able to maintain their social value creating activities. There were also no contingency plans for unskilled workers who lost their jobs as a result of the compliance and who are now barred from the labour market.

Find out about our Business and Human Rights Executive Programme: Managing Risks, Pushing Innovation.