Micro, Small and Medium-sized Enterprises provide the foundation for all modern economies, and are recognized globally on 27 June, MSME Day. They account for over 70 percent of businesses and more than 50 percent of jobs around the world. More than 99 percent of the total business population in Ukraine and are crucial for achieving the SDGs.
The war in Ukraine has forced half of all Ukrainian businesses to completely shut down. Most of the remaining 50 percent have been forced to operate well below capacity. If the war deepens and protracts further, up to 90 percent of the population of Ukraine could be facing poverty and vulnerability to poverty.
Today, as the war hampers the livelihoods of all Ukrainians, human rights, gender equality, and non-discrimination should be at the centre underpinning all socio-economic response and recovery plans. The UN Guiding Principles on Business and Human Rights (UNGPs) provide a clear framework for this, and an opportunity to address the challenges that lie before us.
There is a significant need to support the MSMEs (and indeed the entire corporate sector) to sustain the economy of Ukraine affected by the war. However, as witnessed during the COVID-19 pandemic and the armed conflict in Donetsk and Luhansk regions, along with the economic risks, the risks of human rights violations is heightened during warfare. Therefore, to ensure sustained livelihood and jobs for the most marginalized, including women and youth, it is crucial to ensure responsible business conduct at times of war.
Such an approach should be implemented within the framework of the UN Guiding Principles on Business and Human Rights - the universal accepted guidelines for states and companies to prevent and address adverse human rights impact by business operations. This is especially important in the context of Ukraine's current candidate status to join the European Union. The EU is the driving force in implementing the UNGPs in Europe and through its engagement with non-EU countries. Stepping up the UNGPs implementation and responsible business conduct could mitigate the negative impacts of the war, bringing immense benefits for Ukraine in the form of decent job creation, addressing outward migration, economic sustainable and equitable growth, improved livelihoods, women's economic empowerment, and reduced inequalities and progress in all SDG indicators.
Business and human rights: what did we learn in 2021
In 2021, the United Nations Development Programme (UNDP) analyzed the implementation of the UN Guiding Principles on Business and Human Rights in Ukraine to get a sound understanding of adverse business-related human rights impacts.
Since conducting a National Baseline Assessment on Business and Human Rights in 2019 in Ukraine, which mainly focused on UNGPs Pillar 1, UNDP found a need to fully understand and document the challenges, barriers and needs - as well as the opportunities -for both duty bearers (government and businesses) and rights holders. We, therefore, embarked on the following four assignments: 1)A stakeholder mapping/analysis and lessons learned mapping/analysis; 2) A rights holder study; 3.) A sector/market study; and 4) An international best practice study on BHR.
The 2021 research outlined the overall trends/needs/barriers for duty bearers and rights holders, and provided a deep dive into the ICT, retail and agricultural sectors/markets to understand the key constraints - as well as identify the opportunities to adhere to responsible business conduct.
According to the 2021 research, the most common human rights abuses in business in Ukraine are related to violations of the labour rights of workers, including informal employment, poor working conditions, a lack of guarantees of occupational health and safety, violations of minimum and living wage legislation, and environmental degradation.
The study also identified the categories of rights holders that are most vulnerable to violations of labour rights, such as people with family responsibilities, especially women, elderly people, people with disabilities, representatives of the LGBTIQ+ community, children, young people (especially those with no work experience) and other social groups. According to the study, rights holders often find it challenging to protect their rights and to seek justice in case of adverse human rights impact by businesses. In particular, with regards to accessing decent work, it was noted that officially registered persons have access to legal remedies, however, several respondents stressed that this access is rather limited. For workers who are employed informally, most are not able to protect his/her rights and access remedy.
The understanding of BHR is limited among both rights holders and duty bearers (government, local government and businesses), as well as within oversight institutions and the judiciary. To address the barriers there is an immense need for organizational capacity assessment, awareness raising of duty-bearers, rights-holders and businesses on the practical implementation of the UNGPs. This includes targeting oversight institutions, the judiciary and bodies, responsible for the access to effective and transparent remedies.
UNDP Ukraine's next steps
The 2021 research helped UNDP and its development partners to draw up a coherent road map to accelerate the UNGPs in Ukraine.
In April 2022, UNDP joined a new global project funded by the Government of Japan which is aimed at improving human rights standards in business by promoting the implementation of the UN Guiding Principles on Business and Human Rights. This new initiative will help 17 countries, including Ukraine, to better equip governments and companies to understand and act upon their duties and responsibilities to prevent abuses such as forced labour, land grabbing and discrimination. The project interventions are designed to respond to the particular context of the war setting and will serve two main purposes: First, it will guide companies to carry out heightened Human Rights Due Diligence (HRDD) to assess, prevent and mitigate adverse impacts; and it will help the Government of Ukraine to develop relevant policies and integrate Business and Human Rights principles into strategic human rights documents tackling business-related human rights abuses. The project will build on the findings and recommendations from the UNDP 2021 research and the 2019 National Baseline Assessment on Business and Human Rights.
Background:
UNDP in Ukraine promotes human rights norms and values in Ukraine paying particular attention to the UNGPs implementation. In 2021, under the Human Rights for Ukraine project, UNDP launched a pilot initiative "Business and Human Rights in Ukraine - Accelerating Sustainable and Equitable Development through Implementation of the UN Guiding Principles on Business and Human Rights" to identify baselines, gaps and opportunities and to fully understand the current situations of rights holders and duty bearers.
In 2022, UNDP launched a new global project "Human Rights Due Diligence in Global Supply Chains: Leveraging the UN Guiding Principles on Business and Human Rights for a Just Recovery" funded by the Government of Japan.
These initiatives are part of the Human Rights for Ukraine project, which is being implemented by the UNDP Ukraine and financed by the Ministry of Foreign Affairs of Denmark during 2019 - 2023.
