Jens Munch Lund-Nielsen Business Voice

Jens Munch Lund-Nielsen, Lead Group Advisor, CSR, A.P. Moller Maersk

Getting started - Value-chain risk analysis - High risk contexts - Engaging key functions

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A.P. Moller Maersk Group consists of 10 different businesses which includes Maersk Line (the world’s largest container shipping line), Maersk Oil, Maersk Drilling, A.P.M. Terminals that operates 60 ports around the world and retails in Northern Europe, as well as some different offshore service companies.  We have 110,000 employees worldwide and an annual revenue of $60 billion. This diversity of industries is also part of the challenge when we’re defining our human rights framework.  When I joined the company had just signed up for the UN Global Compact and that was done and prepared by a gap analysis across all the business units based on the 10 principles of the Global Compact. 

In our sustainability strategy we included the establishment of a Sustainability Council and this council has the participation of senior leadership from across the Group’s largest businesses.  The Sustainability Council is chaired by Claus Hemmingsen who is the CEO of Maersk Drilling and one of our 6 members of the Executive Board of Directors. 

Leading up to the endorsement last year of the Guiding Principles in the United Nations we conducted a high-level gap analysis where we included assistance from people that had been part of John Ruggie’s team and, based on the outcome of their work, the Council endorsed a two-year programme which is running for 2012 and 2013 where our aim is to understand the Guiding Principles requirements in full and translate them into a business context and into a business language that we can work with internally.  One of the initiatives we took after this was also to seek the membership of GBI so we can learn from other companies and have somebody to discuss dilemmas with.  

So in this two-year programme we have four focus areas and they are also defined and described in our annual Sustainability Report.  First of all we wanted to understand and map the potential larger impacts that Maersk has on human rights throughout our full value chain.

We hired the Danish Institute for Human Rights to help us with this work and they conducted workshops in each of our 10 business units so in each workshop we would make sure to include people that would represent different business functions and then they were guided through a pre-defined set of 32 scenarios that focuses on all parts of our value chain and on all the human rights.  I would call this an informed dialogue and through this informed dialogue, including people who understand the daily business, we started to build a mutual understanding of ‘where is it that we might have some human rights impacts’, ‘what is it that we maybe haven’t seen before’ and it was confirmed, which is no surprise I think, that it is in relation to our supplier base that the risks are the highest. 

One other example that came up is related to the contents of the containers we move.  As a shipping company you function like a postal service.  That means that we are not allowed to open the container and we can only know about the contents of the container from the bill of laden that the customer is responsible for filing.  So the challenge for us is that our services can be misused to transport illegal goods, or dual-use goods that might be used in conflict zones and against people. This is an example of an operational dilemma we face where we need to collaborate with police, customs and other relevant authorities to mitigate these impacts.  I think the Guiding Principles do provide some demarcation of how to interpret our responsibility for such cases. 

A second issue we are looking into is to understand if the Guiding Principles provide some sort of protection for operating in extreme risk countries. So in partnership with the Danish Institute for Human Rights, the Institute for Human Rights and Business in London and some other companies around the world, there is currently work going on to apply the Principles in Myanmar/Burma. There is a very very high international awareness and focus on this country, so applying the Guiding Principles in collaboration with others, the first outcome is to mitigate any potential harmful impact of our own operations, but there is also another outcome which is to protect our reputation from actually operating in such high-risk environments.

A third thing we are looking into to understand these Guiding Principles and how they should be interpreted in our company are the issues around operational-level grievance mechanisms and how such mechanisms should be tailored into our business context.  The fourth thing we are looking into in this two-year programme is around legal and contractual consequences of the human rights agenda.  How will this agenda modify the contracts and relationships that we have with our business partners?  That is one of the open questions that there is still not a very clear answer on. 

At the present time I think it is clear from the work we have done until now that there are internal barriers in a company for engaging on a human rights agenda including this full scope as described in the Guiding Principles and one of the structural barriers comes from the number of different business functions that will have a stake in this area.  From legal departments, human resources, business development etc., all will have a stake in these risks and these impacts and a large part of the human rights agenda is currently mainstreamed into what I would call classical programmes which run fine – issues of labour practice, anti corruption, responsible procurement and so on.  But when you are starting to unfold the full agenda and when you are looking at the full scope of potential human rights that the company can somehow be related to, they are cases that do not fall in the normal realms of these different business functions.  So it’s about finding new avenues for different functions to collaborate and reach decisions – that is one of the challenges of this agenda, and they need to reach decisions on issues that traditionally are not considered within their daily scope, so there’s a translation issue of the human rights agenda to translate the relevance of the agenda into the daily work of these business functions.

As for the case I mentioned before for the potential use of our containers for dual-use products – in such a case it will include input from different functions such as our legal function, our security function, our sale and customer relations, public affairs and so on.  It will be a concerted effort from all functions to make this work.  I believe that a large part of the future development of this agenda is to translate expectations into these different internal functions and to ensure incentive structures follow the responsibility on this agenda.  So in Maersk, our aim is that by end of 2013 we will be able to understand all this in full and have built the corresponding structures in the company to respond to these risks with a constant care.

Extract revised for written version from audio file recorded in September 2012