Sasol is a South African-based integrated oil and gas company, focusing on coal extraction and the production of chemicals and synthetic transportation fuels. Formed in 1950, Sasol employs more than 30,000 people. The company has embarked on an ambitious programme of international growth, with plants being established in Qatar and Nigeria, as well as Algeria, China, Australia, the US and India.

The Challenge
Several of the countries that Sasol has identified for possible investments have been singled out as having state institutions that breach human rights obligations. Because many of its proposed investments are in the form of joint venture partnerships with host country governments, Sasol runs the risk of being deemed complicit in any potential state abuses directly or indirectly associated with its projects.

As a natural resource company, Sasol has to go where the resources are located. This has brought additional concerns beyond complicity in human rights abuse. Sasol is challenged to fulfill its stated commitments to employee share-ownership in countries where it is not permitted, and to recognize collective bargaining where union activity is restricted. Operating in countries where the state violates privacy rights and screens personnel on the basis of their religious belief, gender or HIV/AIDS status brings another challenge. Finally, the company also experiences challenges in ensuring that government resettlement programmes related to their joint venture projects are done in accordance with internationally accepted norms.

The Actions
As Sasol expands into countries that have been criticized for their human rights records, and in light of the blurring responsibilities between companies and host governments, there is a need for more systematic management of human rights risks.

Sasol is convinced that the only effective route to long-term protection of human rights is to implement a company-wide management system. To date, Sasol has focused on five elements of the system:

• Providing human rights awareness and training programs. Initially, the emphasis is on human resources and project-related employees. Over time, the programs will reach all employees.
• Integrating human rights issues more formally in project and country risk assessments. Assessments are used for all projects, no matter how small or where they are planned.
• Further integrating human rights concerns in company policies and procedures. Because more than 80 percent of Sasol’s employees are based in South Africa, the initial focus is on black economic empowerment (BEE), a government requirement. BEE issues are included in supplier reviews.
• Consulting and communicating on human rights issues. This is achieved through focus groups, case studies, and publications such as the Annual Review, Sustainable Development Report, and an employee newspaper.
• Developing monitoring and assurance mechanisms.

The Benefits
In addition to the moral case for respecting human rights, there are various ways in which the company’s structured approach is beneficial.

By proactively identifying possible human rights concerns, Sasol is able to more effectively address potential risks. A poor reputation can affect government relations and impede Sasol’s ability to operate. On the opportunity side of the equation, initiatives such as the Equator Principles and the Dow Jones Sustainability Index have made it increasingly apparent that socially responsible practices can improve access to financial markets and reduce the cost of capital.

This case example was developed by Sasol for An Inspirational Guide to Implementing the United Nations Global Compact, which features 21 examples of how companies from a wide range of sectors and countries have approached the challenge of implementing the ten principles and engaging in partnerships for development.