Written evidence from Amnesty International
UK
Amnesty International is a worldwide movement of
people who campaign for internationally recognised human rights
to be respected and protected. Our vision is for every person
to enjoy all of the human rights enshrined in the Universal Declaration
of Human Rights and other international human rights standards.
Our mission is to conduct research and take action to prevent
and end grave abuses of all rights - civil, political, social,
cultural and economic.
1. SUMMARY OF
RECOMMENDATIONS
Amnesty International urges the BIS Committee to
address the following issues with regard to the UK government's
policy and actions on trade and investment:
Issue 1
How to ensure that the UK's approach to trade and
investment promotion does not compromise human rights.
Issue 2
How to ensure that the UK's policy on trade and investment
reflects the "due diligence" framework for the operations
of multinational corporations that has been developed by the UN
Special Representative on Business and Human Rights, Professor
John Ruggie.
Issue 3
How to address the reputational and financial consequences
faced by UK companies that fail to respect human rights in their
overseas operations.
Issue 4
How to improve the accountability and oversight of
the UK's Export Credits Guarantee Department (ECGD) for the human
rights impacts of projects and transactions that ECGD supports.
Issue 5
How to ensure that the UK's policy on trade and investment
contributes to higher standards for companies at inter-governmental
level.
Issue 6
How to ensure that all treaties underpinning trade
and investment that UK is a signatory to, whether Bilateral Investment
Treaties (BITs), regional investment treaties, economic partnership
agreements or free trade agreements can be framed in a way that
does not undermine the international human rights law obligations
of any of the States that are party to such agreements.
2. BACKGROUND
2.1 Amnesty International is submitting evidence
to this inquiry, because there are human rights implications arising
from the UK's trade and investment strategy and policies. While
this submission addresses specific issues of relevance to the
UK, it is informed by the broader context of the interface between
human rights and international trade and investment.
2.2 The integration of human rights into international
trade and investment is a topical issue in the light of the growing
body of evidence on the ways in which international trade and
investment affects human rights, enhancing rights under some circumstances
and undermining rights under others.[1]
It is a development issue in so far as the integration of the
norms, standards and principles of the international human rights
system into the superstructure of inter-State trade and investment
can influence plans, policies and processes of development.[2]
It also engages general principles of international law and contract
law with regard to mechanisms for embedding human rights into
international trade and investment agreements and for adjudicating
disputes.[3]
2.3 The term "human rights" is used
here to refer to those standards that are guaranteed through international
legal instruments, in particular the International Bill of Rights,
various regional human rights instruments, customary international
human rights law, general principles of international human rights
law, case law, and officially documented opinions of the bodies
established to monitor the implementation of these rights.
3. SPECIFIC
ISSUES AND
RECOMMENDATIONS
3.1 Amnesty International urges the BIS Committee
to consider steps that can be taken to ensure that the UK's approach
to trade and investment promotion does not compromise human rights
- 3.1.1 The suggestion that the UK's focus
on trade and investment promotion should not compromise human
rights reflects the recommendations of the House of Lords and
House of Commons Joint Committee on Human Rights (JCHR) in their
December 2009 report "Any of our Business? Human Rights
and the UK Private Sector". The JCHR drew attention to
the need for a UK strategy on Business and Human Rights. Such
a strategy would ensure that the UK's trade and investment policies
are consistent with the UK's international human rights obligations,
and with the evolving policies that different Government departments
are adopting in the sphere of business and human rights.
- 3.1.2 Ensuring that human rights are taken
account of in the UK's trade and investment strategy would require
at the very least the following to be in place:
- (a) Country desk officers and staff within
UK missions should understand the human rights context of UK companies
operating in their countries. The FCO-initiated Toolkit on Business
and Human Rights is an important step in this direction, but it
needs to be supported by training and awareness-raising, so that
missions can intervene in contexts where UK companies are alleged
to be contributing to human rights abuses, and can engage effectively
with companies on these issues.
- (b) Trade-promotion delegations should be
aware of and find ways of raising human rights issues with their
hosts, especially when these are relevant to the trade and investment
activities of UK companies operating in the host country.
- (c) There should be joined-up thinking on
business and human rights across Government departments, including
the Department for Business, Innovation and Skills (BIS), the
Foreign and Commonwealth Office (FCO), the Department for International
Development (DFID) and the Ministry of Justice (MoJ). Different
governmental bodies relate to these issues in different and sometimes
inconsistent ways. There is the need for all Government departments
and agencies relating to trade and investment to consider how
to encourage and incentivise companies to address their human
rights impacts. For example, UK Trade and Investment (UKTI), an
arm of the Government that promotes international trade and investment
by UK companies, does not address human rights issues in its country
briefings. Colombia is described misleadingly on UKTI's website
as "enjoying a long tradition of economic and political
stability". Human rights are not referred to amongst
the challenges for businesses operating in Colombia, despite the
many UK companies that have had their reputations tarnished because
of associations with human rights violations in that country.
3.2 Amnesty International urges the BIS Committee
to press for the UK's policy on trade and investment to reflect
the "due diligence" framework for the operations of
multinational corporations that has been developed by the UN Special
Representative on Business and Human Rights, Professor John Ruggie
- 3.2.1 The Mandate of the UN Special Representative
on Business and Human Rights offers the prospect of bringing about
a significant improvement in the human rights impacts of companies
globally. The UK should promote and support the UN Special Representative's
Guiding Principles when they are presented to the Human Rights
Council in June 2011, as this will help create a level playing
field on human rights, ensuring that responsible UK companies
are not undercut by laggards operating to lower standards.
- 3.2.2 The UK should support the creation
of a mechanism at the June 2011 Human Rights Council to take forward
Professor Ruggie's Guiding Principles, with regard to each of
the three pillars of his framework - the Duty of States to Protect
human rights; the Responsibilities of Companies to Respect
human rights and the need for victims to have access to Remedy.
3.3 Amnesty International urges the BIS Committee
to consider the reputational and financial consequences faced
by UK companies that fail to respect human rights in their operations
abroad, and how the UK can do more to hold these companies accountable
- 3.3.1 Outward investment by UK companies
that fails to respect the human rights of those individuals and
communities affected by the investment does carry costs for the
UK. This is particularly the case in areas of conflict, where
many UK companies have suffered, reputational damage, experienced
significant increases in their operating costs, and in some case
have been unable to continue their operations.
- 3.3.2 Given the number and range of transnational
companies based in the UK and the capacity of these companies
to have significant impacts on human rights globally, the fact
that there is at present only sporadic regulation of the extra-territorial
impacts of corporate activity contributes to a serious regulatory
failure. There are some spheres of activity in which UK companies
are already subject to UK regulations that have extra-territorial
effect, such as bribery and corruption, financing of terrorism,
trafficking, and anti-competitive activity. Currently, however,
the UK has not taken steps to regulate the extra-territorial human
rights impacts of UK companies to ensure greater protection of
human rights globally.
- 3.3.3 Research undertaken by Amnesty International[4]
and its partners in the Corporate Responsibility (CORE) Coalition
reveals that UK companies have committed or contributed to human
rights abuses in many countries and contexts.[5]
In some cases the company is the primary agent of the abuse, while
in other cases it is the company's relationships with third parties,
such as governmental agencies and security forces, that has given
rise to the abuse.
- 3.3.4 The UK government, via the UK's National
Contact Point under The OECD Guidelines for Multinational Enterprises
(located within BIS), has declared several UK companies to be
in breach of the Guidelines.[6]
One of these companies, Vedanta Resources, was recently denied
a licence to operate a mine in Orissa, India, and was refused
permission to expand its existing refinery there on account of
adverse impacts on human rights. The company has admitted that
this is having significant consequences. This has been reflected
in its share price, which has underperformed the market since
these licences were refused. It has also led to concern amongst
investors, some of whom have divested their shareholding.
3.4 Amnesty International urges the BIS Committee
to consider steps to improve the accountability and oversight
of the UK's Export Credits Guarantee Department (ECGD) for the
human rights impacts of projects and transactions that ECGD supports.
This should be done with regard to the following:
- 3.4.1 The extent to which fundamental policy
decisions have been taken by the ECGD without any assessment of
their impacts on human rights despite evidence that there is a
human rights dimension to those policy changes. One such policy
decision is the downgrading of the ECGD's Business Principles,
which were introduced in 2000 to ensure that the ECGD's conduct
is consistent with the UK's international obligations. Another
policy decision is the removal of certain types of transactions,
such as those falling under the remit of the Letter of Credit
Guarantee Scheme (LCGS), from screening procedures that might
identify prospective human rights abuses. Amnesty International
takes the view that the failure of the ECGD to conduct an impact
assessment of its proposed policy changes represents a failure
to take reasonable and proactive steps to protect human rights.
- 3.4.2 The alignment of the ECGD's policies
with steps that the UK government is taking to address the human
rights impacts of UK companies operating abroad, including initiatives
located elsewhere within BIS, FCO and MoJ.
- 3.4.3 The recommendations of UK Parliamentary
Committees that have scrutinised the ECGD's activities, in particular
those contained in reports of the Environmental Audit Committee
(October 2008) and of the Joint Committee on Human Rights (December
2009). There appears to be a growing gap between the views of
Parliament and those of Government with regard to the conduct
of the ECGD.
3.5 There is the need for all Government departments
and agencies relating to trade and investment to consider how
the UK can promote stronger international frameworks for governing
the human rights impacts of companies through the inter-governmental
bodies of which the UK is a member. There are four significant
inter-governmental processes at UN, OECD and World Bank level
that offer opportunities for the UK to press for higher and more
effectively implemented standards:
- 3.5.1 The UN Human Rights Council will determine
in June 2011 what steps, if any, should be taken to give effect
to the Guiding Principles on human rights for companies and for
States that will be put forward by the UN Special Representative
on Business and Human Rights.
- 3.5.2 The revision of the OECD Guidelines
for Multinational Enterprises, undertaken by the OECD, is being
led within the UK by BIS (i.e. UK National Contact Point). There
is a real prospect of these Guidelines containing an explicit
human rights chapter. We would like to see the UK pressing for
a strong human rights framework to be incorporated into these
Guidelines.
- 3.5.3 The harmonisation of social and environmental
standards for export credit agencies (known as The Common Approaches)
is being undertaken at OECD level. The current review provides
an opportunity for integration of human rights into the screening
procedures adopted by all the export credit agencies of OECD States.
We would like to see the UK pressing for the Guiding Principles
of the UN Special Representative on Business and Human Rights
to be incorporated into the revised Common Approaches.
- 3.5.4 The World Bank's private sector lending
arm, the International Finance Corporation (IFC), is currently
reviewing its Performance Standards for companies it lends to.
The UK as a Shareholder and Board Member of the IFC has an important
role to play in pressing for human rights to be integrated into
these Performance Standards.
3.6 Amnesty International urges BIS to address
the need for all treaties between States that underpin trade and
investment, whether Bilateral Investment Treaties (BITs), regional
investment treaties, economic partnership agreements or free trade
agreements, to be framed in a way that does not undermine the
international human rights law obligations of any of the States
that are party to such agreements. The UK should ensure that all
of its agreements are consistent with this principle, including
any investment agreements negotiated by the European Union on
behalf of member States.
- 3.6.1 The human rights implications of investment
agreements are related to a particular feature known as the "stabilisation
clause". From the investor's perspective, the aim of such
a clause is to ensure that future changes in the legislation of
the host State do not vary the terms of the contract or the basis
on which the investment was made. Such clauses are intended to
immunise the foreign investor from a range of interventions by
the host State that impose costs beyond what was written into
the contract. These can arise from a range of matters such as
taxation, environmental controls and other regulatory requirements,
including those that might be necessary for the protection and
fulfilment of human rights. The rationale for such a clause is
that the host State's sovereignty gives it the legislative power
to alter the effect of the State-investor contract in a way that
will undermine the profitability of the investment. It is in the
interest of the foreign corporation to neutralise this power.[7]
- 3.6.2 From a human rights perspective, the
problem arises when the rights of foreign investors under such
agreements come into conflict with the State's duty to protect
human rights under international law.[8]
Amnesty International believes that States should not promote
or enter into treaties that place constraints on their ability
to give effect to their international human rights obligations,
or on the ability of other states to do so.
January 2011
1 S Aaronson and J Zimmerman, Trade Imbalance: The
Struggle to Weigh Human Rights Concerns in Trade Policymaking
(2007) Back
2
M Robinson, "What Rights Can Add to Good Development Practice"
in Alston, P and Robinson, M. (eds) Human Rights and Development:
Towards Mutual Reinforcement (2005) Back
3
J Hu, "The Role of International Law in the Development of
WTO Law", in Journal of International Economic Law,
(2002) Vol.13 No.4, p753-814; M Sornarajah, The International
Law on Foreign Investment (2010) Back
4
Nigeria: Petroleum, Pollution and Poverty in the Niger Delta,
Amnesty International, 2009; Don't Mine us Out of Existence:
Bauxite Mine and Refinery Devastates lives in India, Amnesty
International, 2010 Back
5
Five case studies of UK companies were published by the Corporate
Responsibility (CORE) Coalition and the LSE in The reality
of rights: Barriers to accessing remedies when business operates
beyond borders, 2009 Back
6
http://www.bis.gov.uk/policies/business-sectors/low-carbon-business-opportunities/sustainable-development/corporate-responsibility/uk-ncp-oecd-guidelines/cases Back
7
M Sornarajah, The International Law on Foreign Investment
(2010, p281-282) Back
8
Stabilization Clauses and Human Rights (2008); this paper
was the output of a research project conducted for the IFC and
the UN Special Representative on Business and Human Rights Back
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