Covid-19 pandemic accelerates business drive to automation

Tom WickerFriday 21 August 2020

Since the global lockdowns began, this hasn’t involved a conveyor belt of eye-catching new inventions. The pandemic’s true impact is that ‘people are finally using a lot of the technical means already available to them,’ says Guy Harles, Co-Chair of the IBA Corporate and M&A Law Committee and a founding partner at Luxembourg-headquartered Arendt & Medernach.

The new Covid-19 era has forced companies out of the comfort zone of tradition. From socially-distanced video meetings to being able to sign e-documents in acquisitions or supply chains remotely, speed and convenience are two major advantages of automation. Along with the relative security of data-encrypted files over paper, ‘it’s saving a lot of money, as transactions become quicker,’ says Harles.

Singh predicts that the long-term move towards automation will be strongest in sectors focused on the supply of goods and services. They will be ‘trying to avoid reliance on supply chains that are more susceptible to global shocks.’

It will also be in preparation for the necessity of reducing the ‘duration of human-to-human contact’, in anticipation of another pandemic.

Singh points out that, prior to Covid-19, many countries had already adopted ‘just walk out’ technology, which enables shoppers to bypass tills and cashiers and just leave the store after choosing their items. ‘These types of technology will possibly increase in the future,’ he says, with obvious implications for staff in those shops.

Technology has undoubtedly transformed our lives, creating unprecedented opportunities in areas ranging from freedom of expression to travel, trading to global commerce. However, many fear there’s a risk of leaving sections of society – and a workforce – increasingly disenfranchised as technology develops.

‘It’s true that automation may also have negative effects on individuals, communities and governments,’ says Singh. ‘A job loss entails serious economic, social and psychological hardship and suffering.’

He adds that where a region, community or people is reliant on a single industry, the consequences of automation can be ‘almost catastrophic’.

Elise Groulx Diggs is Co-Chair of the IBA Business Human Rights Committee and Associate Tenant at Doughty Street Chambers in London. The pandemic is ‘the perfect test case for business and human rights,’ she says. ‘And it exposes the strategic weaknesses and pitfalls in our society, our supply chains, and our path of economic development.’

At first glance, she says, the socioeconomic benefits of automation ‘might seem very appealing to business enterprises when it eliminates the problem of having a sick workforce. In rich countries it can also eliminate having to have any social nets for your workers.’ But in some poorer parts of the world, ‘it could be totally devastating. It’s just compounding the economic crisis.’

Groulx Diggs fears that ‘a massive human rights crisis’ will follow if mass unemployment is created by an unregulated automation drive that simply exacerbates pre-existing patterns of economic exploitation of the poor.

In regards to preventing or mitigating this outcome, ‘the problem is always enforcement,’ says Groulx Diggs. ‘Governments have not been enforcing the labour and modern slavery laws that have been adopted around the world to press these companies to do what they’re supposed to do.’

She is sceptical about how closely the United Nations Guiding Principles on Business and Human Rights are implemented by most business corporations. ‘You have a group of the usual suspects of companies that are always doing or trying to do the right thing – but it’s just a fraction,’ she says.

Automation utilising cutting-edge technology presents further potential challenges, says Martijn Scheltema, Member of the IBA Business Human Rights Committee Advisory Board and a partner at Dutch law firm Pels Rijcken. While the use of AI in document searches or courtroom discovery increases productivity, it has ‘definite human rights implications’ when used to monitor workers in warehouses or distribution centres, says Scheltema.

Scheltema is part of an IBA group that is currently exploring how the principles of due diligence within the OECD Guidelines for Multinational Enterprises could be adapted to ‘prevent, as much as possible, potential human rights abuses’ in the AI supply chain, from its development to its commercial usage. ‘There’s a lot of attention on this topic, especially in Europe.’

For Groulx Diggs, as we move forward with automation and AI, ‘we absolutely need to have a regulatory framework. I know that the Council of Europe has a taskforce and expert panels dealing with these issues and they appear to be doing very good work,’ she says. ‘They appear to want to tailor regulations to the guarantees of the European Convention on Human Rights.’

Harles strikes a note of cautious optimism. ‘It’s a changing world. But I don’t think we will create more unemployment because of it,’ he says. He cites the development of communication technology. ‘If we still had old telephones, the whole world would be assisting with switchboards. As technology evolves, we’ll need new competencies.’ New jobs may arise, as development drives change.

The situation precipitated by Covid-19 has arguably brought us to a crossroads on our ongoing journey to automation. How governments, regulators and businesses move forward will determine the balance of commercial gain and human cost when it comes to replacing some jobs – and people – with technology.