Report: Lhasa hotel project fails international corporate responsibility standards

Thursday, 1 May 2014

Tibet campaigners cite failure to match UN, OECD and UK standards

A report issued to coincide with the Annual General Meeting of InterContinental Hotels Group (IHG) this Friday details the company’s repeated failure to demonstrate compliance with international corporate responsibility frameworks (1). The report focusses on the company’s plan to open a luxury hotel in Lhasa, Tibet, and raises concerns that the company has not undertaken due diligence with regards to the human rights impact of the project, leading to potential legal liability.

The Free Tibet report, Part of the DNA? (2), evaluates IHG’s performance in the hotel project against four global corporate responsibility standards: the United Nations Guiding Principles on Business and Human Rights; the OECD Guidelines for Multinational Companies; the UK government’s Business and Human Rights Action Plan; and the United Nations Global Compact (3). Copies of the report have been submitted to the relevant contact points for all frameworks.

The report finds that the company has breached each of these standards in regards to transparency and stakeholder engagement and has refused to demonstrate compliance with principles regarding:

• avoiding complicity with human rights abuses;
• conducting suitable human rights impacts assessments;
• consultation with the local community and relevant stakeholders;
• the implementation of measures to protect human rights of employees and prevent discrimination in recruitment.

The report also notes that even though IHG is a signatory to the voluntary United Nations Global Compact, it has declined on two occasions to respond to requests from the compact secretariat to demonstrate adherence to its principles in the case of the Lhasa hotel. (4)

According to the UK’s Business and Human Rights Action plan and other frameworks, “the risk of causing or contributing to gross human rights abuses” should be treated as a “legal compliance issue” (5). In addition, the report raises concerns about the company’s failure to provide information about measures to manage risks associated with the arrest of its Chinese partner in the Lhasa project. Exhibition & Travel Group chairman Deng Hong’s detention for investigation of fraud and illegal land deals has been linked to a high-profile corruption investigation in southern China (6).

Free Tibet director Eleanor Byrne-Rosengren said:

“IHG claims corporate responsibility is ‘part of its DNA’ but has chosen to ignore or reject every opportunity to show it has complied with frameworks that should govern the policies of every responsible multinational. It should be a matter of grave concern to IHG’s directors, shareholders and partners that its refusal to account for its actions suggests the possibility that the company has failed to undertake due diligence. What is this company hiding?

IHG trades on its high ethical standards and participation in global corporate responsibility schemes and then refuses to show that it lives up to their standards. It is a matter of concern to all of us that a flagship British multinational can behave with such disregard for its responsibilities.”

A demonstration by Free Tibet and Students for a Free Tibet will take place outside the AGM at London’s InterContinental Park Lane on Friday morning and representatives of both organisations attending the AGM will question the company’s board. (The AGM will also face a protest by the Unite union, over the living wage and union rights in the company’s London hotels. [7])

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A summary of the report can be downloaded at http://freetibet.org/files/corporate-responsibility-summary.pdf

More information about the campaign and the hotel at www.freetibet.org/intercontinental

Contact:

Free Tibet campaigns and media manager Alistair Currie
T: +44 (0)207 324 4605
E: Alistair@freetibet.org

Notes

(1) Part of the DNA? IHG and the failure of corporate responsibility in Tibet, can be viewed at www.freetibet.org/coroprate-responsibility A two-page summary can be viewed at http://freetibet.org/files/corporate-responsibility-summary.pdf
(2) The title quotes a statement by IHG CEO Richard Solomons in the introduction to the company’s online corporate responsibility report http://www.ihgplc.com/index.asp?pageid=812
(3) United Nations Guiding Principles on Business and Human Rights http://www.business-humanrights.org/media/documents/ruggie/ruggie-guiding-principles-21-mar-2011.pdf; OECD Guidelines for multinationals http://www.oecd.org/daf/inv/mne/48004323.pdf; UK Business and human rights action plan https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/236901/BHR_Action_Plan_-_final_online_version_1_.pdf; United Nations Global Compact http://www.unglobalcompact.org/AboutTheGlobal Compact/index.html
(4) Free Tibet press release, 10 April 2014 http://freetibet.org/news-media/pr/un-tells-intercontinental-hotels-group-stop-stonewalling-over-lhasa-hotel IHG has yet to respond to the second request.
(5) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/236901/BHR_Action_Plan_-_final_online_version_1_.pdf
(6) Free Tibet news release 13 November 2013 http://freetibet.org/news-media/pr/intercontinental-hotels-group-china-partner-arrested-fraud-charges and Daily Telegraph, 13 September 2013, http://www.telegraph.co.uk/news/worldnews/asia/china/10308029/Corruption-and-the-worlds-biggest-building.html
(7) Unite press release http://www.unitetheunion.org/news/global-hotel-chains-shareholders-face-protests-over-trade-union-rights-and-failure-to-pay-the-living-wage/