This page presents an introduction to and analysis of the dilemma. It does so through the integration of real-world scenarios and case studies, examination of emerging economy contexts and exploration of the specific business risks posed by the dilemma. It also suggests a range of actions that responsible companies can take in order to manage and mitigate those risks.
Governments have an obligation to protect, respect and fulfil human rights. This includes taking progressive steps towards the achievement of everyone's right to an adequate standard of living, including adequate housing. In turn, companies are expected to respect the right to adequate housing by ensuring their operations do not impact on this right (e.g. through forced evictions, arbitrary interference with individual's privacy and family, arbitrary restrictions of the freedom of movement, etc.). Where a company provides housing to its workers, it must ensure that it satisfies minimum criteria, such as security of tenure, availability of services, materials, facilities and infrastructure, affordability, habitability, accessibility, location and cultural adequacy.
Given that a company has the potential to have a more direct impact on this right when directly providing housing to its workforce, there is the potential for the lines of state and business responsibility to blur.
For example, does a company have a duty to provide workers with adequate housing (e.g. in the form of company-provided accommodation) when setting up operations in remote areas that lack infrastructural development, or is this a state responsibility? This question becomes more pertinent when a company is operating in a country where the government has a reduced capacity to realise the right, certainly in the time scale of the business operations.
Companies might be uncertain about requirements in terms of the freedoms, entitlements and criteria that constitute ‘adequate housing'. The associated risk is that business partners or suppliers might also be unaware of these requirements or not consider it their responsibility to adhere to international human rights law in this respect.
Types of worker accommodation range from temporary exploration and construction camps to permanent dormitories (see "Types of worker accommodation" in the background to the dilemma section). A company will generally offer housing to employees and their families where the number or type of workers required for specific business operations cannot be sourced from or accommodated within local communities. As a result, company-provided housing is often associated with the importation of an additional (often migrant) workforce into an area.
Typical scenarios might include the following:
Responsible companies are most likely to encounter this issue among their business or supply chain partners (e.g. see the Nike example above, which demonstrates the due diligence challenges associated with auditing and monitoring an extensive supply chain and the associated risks of complicity in violations of the right to adequate housing). This is particularly the case if a company has limited monitoring ability over an extensive and complex supply chain.
The potential challenges associated with the failure of an employer or its partners to provide adequate housing include:
Apple accused of failing to provide adequate living conditions for workers
In a 2016 report, ‘Apple making big profits but Chinese workers' wage on the slide', NGO China Labour Watch (CLW) highlighted the poor living conditions at one of Apple's major suppliers, Pegatron Shanghai, which produces iPhones for the brand. The report stated that investigators observed poor living conditions, including overcrowded dormitories of up to 14 people, mould growing on the walls and bed bugs. CLW has published reports on the factory every year since 2013 and many of the poor working and living conditions identified in previous reports persist. CLW's investigation alleges 23 categories of legal and ethical labour rights violations at Pegatron Shanghai.
Migrant workers in Southern Italy's agricultural sector experience poor living conditions
In 2016, various news reports highlighted the poor living conditions of migrant workers on fruit and vegetable farms in Southern Italy. Every year thousands of migrant workers travel to the region for seasonal work during the harvest. Many end up living in makeshift structures and squalid camps with no running water or electricity. The camps are often not serviced by municipal waste collectors and so piles of rubbish are left throughout camps. A 2012 investigation by the Ecologist Film Unit, initially exposed the exploitation and poor living conditions that many migrant workers face in southern Italy and accused Coca-Cola of sourcing oranges from this region. In response Coca-Cola upgraded its supplier assessment process to check on the recruitment and employments conditions of migrant workers.
Crowded and unhealthy accommodation at Chinese Microsoft supplier factory
In April 2010, a report by the Institute for Global Labour and Human Rights highlighted the poor working and living conditions of teenage ‘work-study students' at KYE Systems, an electronics factory in Dongguan, China, which supplies multinational computing giant Microsoft, among other companies.
In terms of worker housing at the factory, the report stated that each dormitory of around 14 feet by 23 feet in size housed 14 young employees sleeping on narrow bunk beds. Workers were not provided with bedding, phones, air-conditioning, televisions or electrical sockets in the rooms, which reportedly became very uncomfortable during the hot, humid summers. Workers had been known to sleep on newspapers on the roof in order to escape the heat. In addition, there were only 20 toilets and 6 hot water taps between the 300 workers on each floor. Single employees were not permitted to live outside of the factory compound.
This case highlights the risks associated with sourcing products from suppliers that do not ensure that vulnerable groups of employees have a safe and secure place to live in dignity and that exploit young workers under the guise of ‘work experience' .
Infringement of the right to adequate housing carries a number of risks including:
Many countries have ratified at least one international treaty relating to adequate living conditions (particularly in relation to housing) and have relevant local legislation protecting this right. This means companies may face legal action and associated reputational, financial and/or other risks if they breach local and international laws in this respect. The consequences of legal action can include legal costs and substantial damage payments, as well as civil and criminal sanctions (for example where poor housing standards result in injury or death or compromise the enjoyment of other human rights). Whether a legal case is successful or not, it can also result in the use of valuable management time and reputational damage for the company.
In September 2009, for example, Israel's National Labour Court rejected an appeal by the Nir Am Cohen Vegetables cooperative and its directors. The directors had been convicted for illegal employment of migrant workers under unsuitable working conditions and fined 1.46 million shekels (US$380,000). Accommodation provided to the migrant workers was reported by to consist of cardboard and wooden platforms covered in plastic, without a fixed structure, beds or bedding. No kitchen facilities, sanitation or lighting were provided.
In May 2016, dormitory operator KT Mesdorm Pte Ltd was convicted in Singapore for intentionally aiding three companies to breach a work pass condition by housing their respective foreign workers in overcrowded accommodation at the Blue Stars Dormitory that it operates. This violation contravened the Foreign Manpower Act in Singapore and as a result, the operator was fined USD300,000. An official inspection of the dormitory found that the dormitory had exceeded the approved occupancy limit and thus over-taxed the available infrastructure and amenities. As a result, workers were living in unsanitary and unhygienic conditions.
Infringement of the right of employees to adequate housing can result in adverse publicity, including through sustained or high-impact NGO and trade union campaigns, local activism or negative publicity by journalists (see the Nike example above). The poignant and tangible nature of substandard housing can be a compelling tool for activists when conveyed as a symbol of the treatment of the work force in general terms. These sorts of press reports have the potential to tarnish a company's reputation, which can result in reduced sales and loss of market share.
For example, a July 2008 report, The Heavy Load, published by the Liberian NGO Save My Future Foundation (SAMFU - supported by the International Labor Rights Forum), alleged that rubber company Bridgestone/Firestone houses plantation workers in accommodation unchanged since it was built in 1930. The report alleged that the houses mainly consisted of a single room that lacks electricity, running water, indoor kitchens, toilets, living rooms and adequate roofing. Many are reported to leak when it rains.
SAMFU alleged that new accommodation built by the company to house some employees also lacked similar facilities. In the plantations, clean water is reported to be scarce, with an average of two hand pumps shared between 500 persons.
A lack of adequate housing can lead to deterioration in the health of workers. For example, overcrowding and limited access to clean water and sanitation facilities can increase the risk of exposure to diseases, which is likely to result in heightened absenteeism and/or lower productivity. In November 2009, for example, it was reported by the Detroit News, in an article entitled "H1N1 Outbreak hits migrants" that 216 farm workers at 10 labour camps in Michigan, US, became sick with the H1N1 virus. Overcrowding of housing facilities is said to have contributed to the outbreak.
The provision of inadequate or excessively-priced worker housing also has the potential to undermine employee motivation and may induce poor worker/management relations. Acrimony in the workplace may result in reduced productivity, supply chain disruption (e.g. as a result of protests and strikes over living and working conditions), and a diminished ability to recruit and retain capable workers.
Compliance with international law and/or adherence to best practice can be achieved by carrying out human rights due diligence, including through the application of a company policy on adequate housing that aligns with international instruments related to the right to adequate housing. These include the ILO's Workers' Housing Recommendation (No. 115), General Comment Four and Seven of the International Covenant on Economic Social and Cultural Rights and the ILO Helpdesk's Factsheet No. 6: Workers' Housing.
While the ILO encourages employers to help workers find independent accommodation, certain circumstances may require an employer to provide housing to its workers (e.g. when operating far from population centres or in the case of vulnerable groups of workers). Employers are expected to provide accommodation in a manner that is consistent with the right to adequate housing, including accommodation that meets basic health and safety standards.
A company housing policy can be augmented by regular site visits, impact assessments and a fully-operational grievance mechanism. These procedures should be geared towards ensuring compliance with company policies, as well as international and national housing standards.
The UN ‘Protect, Respect and Remedy' Framework for Business and Human Rights provides guidance on how to protect individuals and communities from corporate related human rights harm.
The framework is comprised of three key principles:
The framework states that in addition to complying with national laws businesses have a responsibility, in the context of the countries where they operate, to respect human rights through their own business activities and through their relationships with third parties – such as business partners and entities in their supply chains. To meet this responsibility, the framework notes that businesses should engage in human rights due diligence and specifies the main components of the process:
Policies: Including a human rights policy containing broad commitments, supported by more detailed guidance in specific functional areas
Impact assessment: Including assessments that explicitly reference internationally recognised human rights and are used by companies to avoid potential negative human rights impacts on an ongoing basis
Integration: Including the embedding of respect for human rights throughout a company
Tracking performance: Including regular updates of human rights impact and performance
The Guiding Principles for the Implementation of the UN "Protect, Respect and Remedy" Framework aim to provide "concrete and practical recommendations" about how businesses can operationalise their responsibility to respect human rights. According to the Guiding Principles, the responsibility to respect human rights requires responsible companies to:
The UNGPs apply to all States and to all business enterprises, both transnational and others, regardless of their size, sector, location, ownership and structure.
The UNGPs have experienced widespread uptake and support from both the public and private sectors, and numerous companies have publicly stated their commitment to the Guiding Principles. The UN Guiding Principles Reporting Framework is also used by companies to report on how they respect human rights.
Companies can seek specific guidance on this and other issues relating to international labour standards from the ILO Helpdesk. This aims to help company managers and workers understand the ILO approach to socially responsible labour practices and to assist in the development of good industrial relations.
Specific actions for responsible business might include:
If a company or its suppliers frequently provide worker housing, it might consider developing and implementing a company-wide policy that addresses the right to adequate housing. When drafting a policy and plans of action, a company might contemplate engaging with UNHABITAT and other experts on the right to housing.
The policy should emphasise commitments that ensure protection of the following rights and entitlements:
Company housing standards could include guidelines on:
Human rights and adequate housing policies should ideally be supported by a full suite of procedures, including in relation to management, monitoring and reporting. A company might, for example, identify key performance indicators against which the implementation of the policy can be measured, including in relation to the upkeep, improvement and modernisation of worker housing (if required).
Similarly, a company might wish to ensure that each housing facility has a written and comprehensive management plan that is consistent with company policy. This plan could be implemented by a full-time accommodation manager – and conducted at each accommodation site. If accommodation is run and managed by a contractor, a company could include adherence to the management plan as a part of the contract and integrate it into supplier codes of conduct.
If a company constructs new worker accommodation, it is advisable that its initial assessment includes consideration of the impact of construction (e.g. on local services, community cohesion and safety). Any assessment could be benchmarked against company policies, as well as the international and national standards (building construction, health and safety, water and sanitation etc.). The aim could be to develop appropriate mitigation measures to address any adverse impacts identified (e.g. company responses on health and safety, security, living conditions, grievance mechanisms etc.).
In assessing impacts on the right to an adequate standard of living, including adequate housing, even if a company is not a client of the International Finance Corporation (IFC), a company might choose to follow the Workers' accommodation: processes and standards, developed by the IFC and the European Bank for Reconstruction and Development (EBRD). The guidance includes a Checklist on Workers' Accommodation which provides assessment questions on, for example:
In order to ensure compliance with company policies and procedures, a company could consider setting benchmarks against which to assess the performance of the accommodation manager/contractor. Assessments can be made through regular inspections and monitoring, the results of which should ideally be recorded and made available for review. Third party assessments might be considered where, for example, internal assessments have previously failed – and may result in negative publicity.
It is advisable that benchmarks meet or exceed the national regulations on adequate housing. Where such standards are known to be lower than international standards, a company should strive to meet the international standard where possible. Site visits could be conducted to ensure that company-provided accommodation provides security of tenure is adequate, affordable, accessible for certain vulnerable groups, adequately located and culturally appropriate.
Some of the benchmarks might include:
In countries where the company has suppliers and business partners, but not an actual presence, or where conditions are thought to be particularly poor, it may consider hiring compliance specialists to oversee and improve housing conditions.
For a company to responsibly address the potential risks associated with the provision of worker accommodation, it might require business partners, suppliers and contractors to comply with company human rights and housing policies as part of contractual or supplier obligations.
It might be advisable to set up appropriate reporting and monitoring mechanisms to ensure those who supply worker accommodation comply with company performance requirements. This process includes internal and independent site reviews assessed against pre-defined benchmarks based on the company housing policy, which are also in-line with international and national standards.
An additional measure to ensure compliance among business partners, including governments, joint venture partners and suppliers, could be to highlight the importance of the right to adequate housing, in particular the ILO's Workers' Housing Recommendation (No. 115), and their responsibilities with regards to their worker accommodation. Enhanced awareness can be accomplished through company-provided training based on its own policy and other best practice guidance. Where appropriate, companies should encourage business partners, suppliers and contractors to develop their own policies.
Where possible, a company should try to avoid charging fees for accommodation, food and transport, particularly where workers are provided with no alternative but to live in company-provided accommodation. Where the avoidance of imposing fees for rent, food and other services is unfeasible, a company could strive to ensure that fees are fair (e.g. equivalent to or less than the local market value) and do not compromise or threaten the enjoyment of other human rights. Where possible, fees covering utilities should be set at a fixed rate or benefits in kind should be provided. Written confirmation of fees charged and paid should also be provided to the worker.
Accommodation should not be used by employers as a sole means of payment (or for speculative profit), but where accommodation is considered part of an employee's wages a responsible company might ensure that housing arrangements are included in the employment contract.
International standards state that workers in company housing should have security of tenure, including through clearly stated terms and conditions. When a worker's contract of employment is terminated, for example, the worker should be entitled to a reasonable period of time to vacate the premises, in accordance with national law.
In order to provide an opportunity for workers to voice concerns over their housing conditions, a company should develop confidential and transparent grievance mechanisms (such as a whistle blowing hotline) through which employees can raise concerns over company-provided accommodation.
Grievance mechanisms should provide recourse to remedy for workers who have been housed inadequately by the company or one of its suppliers or contractors. In order to increase the effectiveness of grievance mechanisms as a means to identify and remedy problems before they escalate, a company should ensure that the process is available and communicated to all workers, in company-provided accommodation and through other company communications channels such as the company intranet/wiki(including in multiple languages where necessary). Companies might also consider encouraging suppliers to implement similar procedures within their own operations.
The International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right of everyone to "an adequate standard of living for himself and his family," including "adequate housing" - as does the Universal Declaration of Human Rights. Moreover, the right to adequate housing encompasses the provision of basic shelter and the right to live in security, dignity and peace. This includes not only the physical requirements for housing, but also a range of specific freedoms such as freedom from forced eviction, arbitrary interference, privacy or restrictions on the right to choose where to live.
In addition to these negative freedoms, the right to adequate housing entails positive entitlements such as security of tenure, property restitution and participation in decision-making related to housing concerns.
General Comment 4 of the ICESCR defines the various elements of the right to adequate housing as:
According to the International Labour Organization's (ILO) Workers' Housing Recommendation (No. 115) (1961): "It is generally not desirable that employers should provide housing for their workers directly." Employers should use alternatives where possible. The ILO Guidelines nonetheless recognise that there are exceptional circumstances in which an employer may need to provide accommodation – for example where a facility is far from population centres or the nature of the employment requires that the worker should be available at short notice. In such cases, it notes that:
The ILO recommends that worker housing standards, which provide a good guideline for companies, address the following:
Figure 1: Guidance from the IFC. Types of worker accommodation
Category |
Subcategory/examples |
Common characteristics |
Sectors covered |
Key issues |
Rural workers' accommodation |
Logging camp Off-farm accommodation |
Permanent or seasonal Remote |
Forestry Agriculture |
Worker access Monitoring difficulties |
Plantation housing |
Worker village Off-farm accommodation |
Permanent and long-term Families |
Agriculture |
Need to provide sustainable livelihoods Social infrastructures Living conditions |
Construction camp |
Worker camp Worker village Mobile worker camp |
Temporary Migrant workers Gender separation |
Extractives Utilities Infrastructure Manufacturing |
Enforcement of standards and monitoring difficulties Relations with communities Living standards Cost |
Mine camp |
Company towns Dormitories Integrated within existing communities Commuter |
Long-term Remote location Gender separation |
Extractives |
Relations with communities Remoteness Living standards Worker access Long shifts No rest periods |
Factory dormitory |
Permanent Urban Internal migrants |
Garments/textiles Manufacturing - toys and electronics |
Space Privacy Living standards Deduction of excessive rent from wages |
Other human rights that are typically associated with infringements of the right to adequate housing include:
Right to privacy (ICCPR, Article 17): Where worker accommodation is overcrowded, lacks adequate separation of the sexes or has inadequate access to sanitation facilities, employees may lack the right to privacy. This includes freedom from unreasonable interference in the enjoyment of one's private space.
Rights of minorities (ICCPR, Article 27): Members of minority groups may not be provided with accommodation that is culturally appropriate, including in relation to the nomadic way of living of some minority communities (e.g. the Roma communities). When designing worker housing, companies should consult with workers from minority groups to ensure it is culturally acceptable.
Right to a family life (ICESCR, Article 10): This right includes the ability of people to adopt a healthy work/life balance and to spend time with their family. This right is likely to be impacted if a company provides accommodation for a worker, but not for their family.
Right to health (ICESCR, Article 12): Poor housing conditions, including unhygienic and overcrowded accommodation with poor access to adequate sanitation and other facilities, can have a negative effect on worker health. For example, workers housed in these conditions are at particular risk of contracting communicable and air-borne diseases. A company may consider providing regular checks to ensure housing has adequate sanitation and refuse disposal.
Right to education (ICESCR, Articles 13 and 14): Where companies fail to provide housing to workers and their families within reasonable proximity to educational facilities or the payment of rent threatens or compromises this right (whether company provided or not), they risk infringing on this right. In circumstances where operations are located in remote settings or where education is not affordable, companies might consider providing internally-run educational facilities on location or other in-kind benefits.
@TalkHumanRights / @globalcompact
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