Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents

Memorandum submitted by the Ministry of Justice

1.  How do the activities of UK businesses affect human rights both positively and negatively?

  It is now often recognised that businesses can affect the human rights of individuals, and there is an increasing public expectation for businesses to respect human rights. Therefore, in addition to the traditional areas of corporate social responsibility (the environment and sustainability) some UK companies are taking steps to incorporate human rights into their business practices and policies. This can take a variety of forms, however a trend has emerged of a company-wide constitution or code of best practice.

Preliminary desk research taken forward by my department has revealed that companies are taking proactive steps to produce their own human rights policies, statements of values, codes of conduct and pledges. However, policies and statements tend to be aspirational and overarching, with a blurring of corporate social responsibility and human rights.

  It should be noted that UK businesses have the potential to impact positively upon human rights. By promoting and respecting human rights in their activities, businesses can play a vital role in mainstreaming human rights and rebutting popular myths.

2.  How do these activities engage the human rights obligations of the UK?

  Under its international human rights obligations, the UK is required to secure certain rights to people within its jurisdiction. For this purpose, these rights may be split into three types.

  A "negative obligation" is an obligation not to interfere with a certain right or freedom. A right may be absolute or may be limited or qualified in some manner, which in turn affects the extent of the corresponding obligation. In general, the state's responsibility for negative obligations extends only to state functions. The European Court of Human Rights has developed extensive jurisprudence as to the scope of state responsibility under the European Convention on Human Rights (ECHR). The doctrine of state responsibility also applies under international human rights law, but is less widely used given the absence of as developed a system of enforcement in individual cases as under the ECHR.

  A "positive obligation", by contrast, obliges the state to take certain reasonable steps to secure the enjoyment of a certain right to people within its jurisdiction. In the case of absolute or limited rights, this may involve taking steps through the law to prevent one person from engaging in behaviour that may breach the right of another, an example of this is the law on offences against the person in respect of the right to life. in respect of certain qualified rights, such as the rights to respect for private and family life and to freedom of expression, the action required of the state may be more nuanced to reflect the balances that need to be struck, and may engage both law and policy.

  The third type of right is that requiring progressive realisation, for example economic and social rights arising from the UK's obligations under the International Covenant on Economic, Social and Cultural Rights. These too may require positive steps to be taken by the state. This will generally involve the disbursement of state resources and the administration of state policy so as to secure a minimum enjoyment of the right to all people within the jurisdiction and then a progressively greater enjoyment of the right by those people to the limit of available resources.

  The doctrine of state responsibility means that the activities of businesses do not generally fall directly within the scope of the state's negative responsibilities. However, where a state has delegated or relied upon a private body to fulfil its own obligations under the ECHR or has delegated a function which is clearly a function of the state to a private body, Strasbourg and UK jurisprudence provide that the state will remain liable for the acts of that entity which violate Convention rights. It remains, however, that this occasional private engagement of state responsibility is a limited exception to the general principle that a business trading as a private entity will not engage the state's negative obligations.

  So long as a business does not engage the State's negative obligations, it can for the purposes of a State's positive obligations be considered in theory indistinguishable from any other private person; in this respect, a business would be obliged in the same manner as any other private person to respect the laws promulgated by the State that fulfil positive obligations, and is subject like any other private person to the actions taken as part of State policy to secure a balanced enjoyment of qualified rights to all people. However, it is inevitably the case that the power of certain private corporations is such that their potential impact on the fulfilment of positive obligations is greater than that of a single private person; in this respect, it is therefore particularly important that the laws take account of this greater power, and that the corporation both respect the law and engage in the formulation and delivery of State policy. However, it is important to note that the obligation remains with the State, and it is therefore for the State to formulate its laws and policies in a suitable manner that achieves the required outcome.

3.  Are there any gaps in the current legal and regulatory framework for UK business which need to be addressed, and if so, how?

  As discussed above, there is no requirement for a business to comply with the obligation under section 6 of the Human Rights Act 1998, save where it is exercising a function of a public nature within the meaning of section 6(3). However, the Government believes that it is good practice for companies to use the Act as a framework in their business policies and practices.

4.  Does the UK Government give adequate guidance to UK businesses to allow them to understand and support the human rights obligations of the UK? If not, who should provide this guidance?

  The Ministry of Justice is currently undertaking a project, in partnership with the Department of Health, to establish an understanding of how UK businesses engage with human rights, and whether there is a need for further guidance on how companies can embed human rights within their business practices. Phase 1 of the project consists of a scoping study, conducted via questionnaire and in-depth interview with companies from a range of sectors. Once the scoping study has been completed the need for any further guidance will be considered, based on the study's findings.

5.  What role, if any, should be played by individual Government departments or the National Human Rights Institutions of the UK?

  Individual Government departments and National Human Rights institutions should take steps to ensure and promote human rights in business where appropriate. Government Departments and other public sector bodies can take steps to exclude firms with a poor human rights record from tendering and, where relevant, ensure appropriate human rights issues are covered in the contract. Where necessary, Government departments, after consultation with small businesses and their representatives, should also produce information and guidance on best practice.

  The Foreign and Commonwealth Office and the Department for Business, Enterprise and Regulatory Reform are currently producing a toolkit on business and human rights for FCO and UK Trade and Investment posts, in order to create awareness of and promote, amongst other tools, the Organisation for Economic Co-operation and Development (OECD) Guidelines on Multinational Enterprises (a set of corporate responsibility standards for companies which include a provision on human rights) among UK posts overseas. The toolkit gives guidance on how the activities of multinational enterprises may infringe human rights, how to promote the OECD guidelines and how to deal with complaints using the OECD National Contact Points.

  Since 2003, the Department for Business, Enterprise and Regulatory Reform has introduced legislation that makes it unlawful for employers to discriminate against employees on the grounds of their religion or belief, sexual orientation or age. Any employee who feels discriminated against on one of these grounds may make a claim for redress to an Employment Tribunal.

  Several Government Departments are playing an active role in the Private Sector and Human Rights Project outlined in the previous question. Representatives from some private sector organisations are also engaged, including the CBI and the Federation of Small Businesses. Race for Opportunity, a third sector organisation that works with public and private sector employers on equality issues, is also actively engaged with the project. Once the scoping study has been completed, its findings will inform the consideration of the potential roles of individual Government Departments, the Equality and Human Rights Commission and private sector organisations in taking this work forward.

6.  How should UK businesses take into account the human rights impact of their activities (and are there any examples of good or bad practice which the Committee should consider)? How can a culture of respect for human rights in business be encouraged?

  UK businesses can adopt various tools to take into account the human rights impact of their activities, including human rights risk assessments, codes for suppliers and contractors and policy analysis. The Private Sector and Human Rights Project will consider the current awareness of UK businesses of human rights and how a culture of respect for human rights in business can best be encouraged.

  A good practice example of such a voluntary tool is the OECD Guidelines for Multinational Enterprises. The Guidelines are a set of recommendations for responsible business conduct addressed by the OECD members (and 11 additional adhering countries) to multinational enterprises. The Guidelines (Chapter 11(2)) clearly encourage enterprises to "respect the human rights of those affected by their activities consistent with the host government's international obligations and commitments': A unique feature of the Guidelines is the establishment of National Contact Points by the adhering countries. The UK National Contact Point (UK NCP) has been very active in raising awareness of the Guidelines amongst UK businesses and civil society and also in implementing the Guidelines' complaint procedure. The outcome of the complaint process is a final statement which is published on the UK NCP's website ( and, since May 2007, also deposited in the Libraries of Parliament. The final statement may either state whether a UK company (or its subsidiary overseas) has breached the Guidelines (and, in this case, will make recommendations to rectify the situation), or reflect the successful outcome of the mediation offered by the UK NCP. An example of the former is the final statement on Afrimex (August 2008), and an example of the latter is the final statement on G4S (December 2008), both published on the UK NCP's website. The Government is currently considering what follow-up there should be after the UK NCP has closed an investigation under the Guidelines.

  The UK NCP is also responsible for promoting the OECD Risk Awareness Tool for Multinational Enterprises in Weak Governance Zones, which aims to help companies that invest in countries where governments are unwilling or unable to assume their responsibilities, It addresses risks and ethical dilemmas that companies are likely to face in such weak governance zones.

  The UK has also been a driving force behind a number of other initiatives designed to promote business responsibility for human rights. These include:

    Voluntary Principles on Security and Human Rights (VPs)—Set up in 2000 by the Foreign and Commonwealth Office and the US State Department, the VPs aim to provide guidance to companies in the extractive industry, on ensuring the safety of their personnel and security of installations in insecure environments, while at the same time promoting standards of corporate responsibility with regard to human rights.

    Professor John Ruggie (United Nations Special Representative on Human Rights and Transnational Corporations) is looking at reducing the risks of negative human rights consequences of international business activity in conflict zones as part of his overall human rights mandate. The Foreign and Commonwealth Office's Conflict Group act as the main point of contact on this particular piece of his work, with support from the Department for International Development and the Department for Business, Enterprise and Regulatory Reform.

    The Kimberley Process (KP) was designed to combat the trade in conflict/rough diamonds. The UK played a leading role in setting it up in 2003. The Government Diamond Office (GDO), run by the Foreign and Commonwealth Office, works closely with participants, industry and civil society to ensure that it remains effective and credible.

  The UK Government has also supported businesses' own efforts to improve global understanding of the relationship between business and international human rights standards. For example, the Department for International Development provided seed funding to the Business Leaders Initiative on Human Rights to support the development of an international Institute for Human Rights and Business. The Institute is supported by a wide range of international stakeholders, including governments, businesses, the UN Global Compact and non-governmental organisations (NGOs). The purpose of the Institute is to provide a source of global expertise in the area of business and human rights. The institute will build a body of knowledge to help define the responsibilities of different duty bearers, and provide services to help build the capacity of business and others to uphold human rights in practice. The Institute was launched in early 2009 and its Executive Board is chaired by Mary Robinson, former UN High Commissioner for Human Rights.

  The Private Sector and Human Rights project being taken forward by the Ministry of Justice and the Department of Health aims to establish an understanding of the engagement of UK businesses with human rights within their domestic operations, and will consider whether a need for further guidance for businesses exists on how to embed human rights within their UK practices.

  Should UK businesses' responsibility to respect human rights vary according to:

    — whether or not they are performing public functions or providing services which have been contracted out by public authorities; is it clear when the Human Rights Act 1998 does and does not apply directly to businesses?

  In terms of legal responsibility, as noted in the response to question 2 in the discussion of negative obligations, State responsibility under international law can extend to

  certain functions of non-state actors where those functions are considered state functions. At the international level, businesses have no direct obligation to respect human rights when they are not operating within the scope of state responsibility.

  The Human Rights Act 1998 defines the scope of the duty under section 6 not to act incompatibly with the Convention rights by reference to "public authority", a concept analogous but not identical to state responsibility. Section 6 provides that "public authority" includes a person exercising public functions and the Committee will be well aware of the jurisprudence in this area. In the majority of cases, it is clear whether a certain function is or is not of a public nature. While the issues considered by the House of Lords in YL v Birmingham City Council and others have been the subject of much attention, it should not be overlooked that, for the most part, it is clear both in law and in practice when a function should be considered a function of a public nature. It is only at the very margins of the concept that certainty may not exist; however, such marginal uncertainty would be an inevitable consequence of the duty having been defined in any manner other than by reference to a list of those subject thereto. In the Government's view this does not obviate the overall success of the duty under section 6 in developing an effective general domestic mechanism for the provision of remedies for breaches of human rights.

  Further to such general human rights provisions, however, it should be recalled from the earlier discussion (question 2) of positive obligations and rights of progressive realisation that a substantial part of the framework of our law and of Government policy exists indirectly so as to protect or promote the enjoyment of such rights. Businesses that operate under the law of the UK will inevitably indirectly participate in the protection or promotion of such rights by respecting laws and regulations, and on occasions by participating in the general framework of the delivery of essential services and functions to the public. Doing so may well amount to no more than the performance of their ordinary business functions, but it should nevertheless be recalled that human rights as a broad field of Government activity is not limited only to those laws and policies that bear the title, especially where economic and social rights are concerned.

    — whether they are operating inside or outside the UK;

  The responsibility of UK companies to respect human rights should not vary according to whether they are operating inside or outside the UK. However, in practice this may be the case, as UK companies operating overseas are required to respect local laws, which may vary according to the international human and labour rights instruments that host countries may have ratified.

    — the size, type or nature of their business?

  UK businesses should have an equal responsibility to respect human rights. The amount of resources that are available to address human rights issues may vary from business to business and sector to sector, however all UK businesses should be encouraged to engage and address human rights in their policies and practices regardless of their size, type or nature of business.

    — How, if at all, should the current economic climate affect the relationship between business and human rights?

  The current economic climate has put pressure on UK businesses to make cutbacks. However, although this may mean that businesses are concerned about investing resources in developing new human rights policies, there remains a strong business case for companies embedding human rights within their practices. In addition to potentially improving their corporate image, companies may enjoy potential benefits of protecting the human rights of their employees in terms of their staff turnover and retention, sickness rates and motivation.

7.  Does the existing legal, regulatory and voluntary framework in the UK provide adequate opportunity to seek an appropriate remedy for individuals who allege that their human rights have been breached as a result of the activities of UK businesses?

8.  If changes are necessary, should these include:

    Judicial remedies (If so, are legislative changes necessary to create a cause of action, or to clarify that a cause of action exists, or to enable claims to proceed efficiently and in a manner that is fair to claimants and respondents);

    Non-judicial remedies (for example, through the operation of ombudsmen, complaints mechanisms, mediation or other non judicial means). If non-judicial means are appropriate, are there any examples of good or bad practice which the Committee should consider?

    — Government initiatives, whether by legislation, statutory or other guidance or changes in policy;

    — initiatives by business or other non-Government actors.

  Recalling the discussion in question 6 about the legal framework put in place by the Government to fulfil its positive obligations to secure the protection of certain human rights, the Government is confident that adequate opportunity exists through these means for activities of businesses that have breached these laws, and hence may have led to a breach of an individual's human rights, to be challenged in court. The same would be true of regulatory frameworks where appropriate. it is not always necessary for there to be a remedy for the individual: indeed, where the breach is not one that falls within State responsibility for negative obligations, there will be no direct relationship under human rights law between the alleged originator of the breach and the person who is claiming that their rights have been breached. This is a proper consequence of the predication of human rights law upon the responsibility of the State, and of the proper role of the State in acting to ensure that all people within its jurisdiction are able to enjoy their rights. If a remedy should exist, therefore, that remedy will often be a remedy against or supplied by the State.

  The Government therefore considers that, taking in combination the human rights protections for matters within the scope of State responsibility, such as under the Human Rights Act, and the protections developed as a direct or indirect consequence of the positive human rights obligations of the State, including obligations to fulfil rights of progressive realisation, there exists in the UK the correct legal framework to protect the rights of individuals.

  However, as previously discussed, the Government encourages all organisations, whether public or private, to consider whether and how they could adopt a rights-based approach to their interface with the public, and believes that the Human Rights Act can provide a useful framework for businesses to embed human rights within their practices.

20 May 2009

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