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

Memorandum submitted by the Institute of Directors


  1.  The Committee has identified an important area of concern, and the Institute of Directors is very happy to contribute to the debate. This evidence is submitted in response to the call for evidence that the Committee issued on 6 March 2009.

  2.  Questions of the observation of human rights by businesses can arise in two very different contexts. The first context is where a national legislature legislates for the observation of human rights within that country. In such cases, the questions are those of the proper extent of such law and of the extent to which the legislation of human rights is the best way to achieve policy objectives. The second context is where the relevant legislature, judiciary and business activities are not all in the same country. Then there are important questions as to the legitimacy of extra-national legislation and judicial process. We tackle each of these two contexts separately in what follows.


  3.  The call for evidence specifically refers to business operations within the UK. We here discuss the usefulness of human rights legislation in this purely national context.

  4.  There is a serious danger of extending the language and the legislation of human rights to areas where they do not belong, and in consequence imposing new burdens on business that will ultimately harm everyone except those who make a living out of enforcing or litigating regulations.

  5.  The main legal point of reference is the June 2007 House of Lords decision in YL (by her litigation friend the Official Solicitor) (FC) v Birmingham City Council and others. This case did however turn on the narrow question of whether a private care home was performing functions of a public nature, and there was a 3:2 majority view that it was not. There was no decision on whether YL's human rights were in fact violated or at risk of violation, although there were obiter dicta on the potential for violation of the rights of care home residents, notably in Baroness Hale's speech (paragraph 58). Baroness Hale mentioned the risk of inhuman or degrading treatment, of loss of liberty and of loss of privacy and of family contact. She noted that it would be possible for rights to be violated without the crimes of ill-treatment or of neglect being committed.

  6.  Two main questions arise.

7.  Should private contractors providing services on behalf of the state be brought within the scope of human rights law as it applies to the state when it provides services directly?

  8.  An argument in favour is that if this were not so, the state could evade human rights obligations simply by contracting out services. An argument against is that one would lose the opportunity to save money by contracting out on the basis that the required services were well-defined but the private contractor was allowed to provide those services in the most efficient way possible, without being burdened by a civil service mentality. Another argument against is that subjection to human rights law could be taken to excuse the state from defining standards of service properly. That is, it would encourage lazy contracting by the state.

9.  When an action or a failure to act might be regarded as a violation of a human right, but might also be regarded as a failure to provide a high enough level of service, to what extent should human rights law apply?

  10.  The point here is that a violation of human rights is naturally taken very seriously, whereas a failure to provide a high enough level of service would normally merit an apology, improved service and some modest compensation. The question is, is there a line to be drawn so that some acts or omissions, while they could be construed as violating human rights, should be regarded as not sufficiently grave for human rights legislation to apply? This is a serious issue because the European Convention defines rights in such broad terms that minor failings with modest consequences could be construed as violating human rights.

  11.  It is our view that there is a strong case for drawing such a line. Litigation is unnecessarily encouraged, and costs are driven up, by the invocation of human rights law. Human rights law can be a valuable weapon against ministers and officials who misbehave. But it should not be invoked in disputes that should be settled by informal compromise.

  12.  If a line is to be drawn, one must ask where. One guideline might be that one should identify the sorts of conduct that a reasonable person might expect to count as criminal offences, even if they do not actually count as offences and even thought the Human Rights Act 1998 itself explicitly does not create criminal offences (section 7(8)). Another guideline might be that one should identify the sorts of conduct that a reasonable person who was unaware of the narrow criteria that were laid down in Rookes v Barnard 1964 (discussed in Kuddus (AP) v Chief Constable of Leicestershire Constabulary, [2001] UKHL 29) would think merited the award of exemplary damages.


  13.  If it is proposed that there should be some requirements on business activities in a country that are imposed from elsewhere, that raises wider issues. It is necessary to go back to first principles.

  14.  Liberal democracy has developed on the basis of a clear division between civil society, government and business (Habermas, 2001). The specific role of business is to contribute to the wellbeing of society by generating wealth, creating jobs and paying taxes. In addition, firms gain legitimacy by operating within the framework of applicable law and prevailing moral values (ie hard law and soft law). However, it is not the role of firms to enforce law or to impose their moral preferences or norms on the rest of society. The latter are the responsibility of government and civil society respectively.

  15.  Considerations of human rights affect corporate behaviour to the extent that they impose a binding legal requirement on companies, or provoke a response due to the demands of widely accepted societal values and moral principles.

  16.  This model may function in a straightforward manner in a national context. But beyond the nation state, there are not yet sufficiently strong global governance institutions that can define and impose laws and enforcement mechanisms.

  17.  For example, the existing corpus of international law has been developed as a legal framework for the interactions of nation states (Kingsbury 2003). Its direct application to non-state actors such as corporations is still underdeveloped. As a result, no specific regulations exist that can be used to hold corporations responsible for human rights violations or the support of repressive regimes (Taylor 2004). International conventions—such as the UN Convention on Human Rights—may represent a universal normative standard for corporations, but they cannot be enforced on them.

  18.  One response to this legal vacuum is for individual nation states to impose legal restraints in foreign jurisdictions. For example, in recent years, the US government and US courts have begun to develop laws or apply existing laws beyond their own national borders. They have punished US and non-US companies for corruption via the Foreign Corrupt Practices Act, for human rights violations via the Alien Tort Claim Act, and for financial fraud via the Sarbanes-Oxley Act.

  19.  However, this is not an approach with which we agree. Such a transnational application of US law serves to weaken the sovereignty of other national governments. In addition, it lacks legitimacy in the eyes of non-US citizens. If enforced by one country (or a few countries), human rights could easily become seen as an appendage of the foreign policy of that country, or an attempt to achieve cultural hegemony. There are arguments that would undermine the objection that is based on cultural hegemony. One can argue that it is legitimate, from your own standpoint, to claim that your approach to human rights issues is objectively superior to the approaches of others, but the validity of such arguments is debatable except in the most egregious cases of human rights abuses by, or with the connivance of, foreign regimes.

  20.  Some global corporations have responded by entering political domains that have traditionally belonged to state actors (Walsh, Weber, and Margolis 2003). For example, corporations have started human rights initiatives, such as the Business Leaders Initiative on Human Rights of British Petroleum, ABB and other companies. Furthermore, they have proposed initiatives of self-regulation in order to fill the described vacuum of global governance (Scherer, Palazzo, and Baumann 2006).

  21.  However, the entry of corporations into the political domain is an equally unsatisfactory solution. Companies lack the political legitimacy to act in this area. Furthermore, the firm's primary duty is to promote the success of the company. Although this will involve incorporating ethical and social responsibility considerations into the decision-making process, firms should not seek to become quasi-governmental bodies. Government is the primary institution concerned with the welfare of society as a whole. It should also seek to hold a monopoly on the enforcement of law (as argued by Max Weber), and not rely on companies to fulfil that function.

  22.  Consequently, the legitimate enforcement of human rights at a transnational level is the proper function of appropriate international governmental bodies that command a high level of support amongst the community of nations. If these do not exist, they should be created. Human rights are universal values that exist independently of nation states. Consequently, an appropriate global governance framework should be designed to enforce them. However, it is not the role of companies to undertake this task, or to act as a trans-national police force for human rights in the interim.

  23.  There are also more specific arguments why enforcement should be a matter for international bodies. International documents that set out rights do so in general terms, so that the rights are open to interpretation. It would be fruitless to seek universal agreement on interpretations, but one should at least seek interpretations that are widely agreed. Only an international body would have the authority to say that a right should be interpreted in such a way that a given course of conduct should be regarded as a violation of that right. It is particularly clear that interpretations can differ between countries, and legitimately so, in relation to environmental rights and labour rights. The international interpretive body might well be the court that heard specific cases, because the consensus that could be obtained in the text of interpretations that were not prepared for specific cases is probably to a large extent reflected in the documents that have already been published. Moreover, if one were to say that it was appropriate for a court of one jurisdiction, rather than an international court, to interpret human rights, one would have to accept that it was appropriate for the courts of any jurisdiction to do so, or produce a further argument why not. Absent such a further argument, the decisions of courts of oppressive regimes would then come to be accepted as respectable.


Habermas, J. (2001). The Postnational Constellation. Cambridge, Mass.: MIT Press.

Kingsbury, B. (2003). The International Legal Order. In P. Cane, and M. Tushnet (Eds.), The Oxford Handbook of Legal Studies: 271-297. Oxford: Oxford University Press.

Scherer, A. G., Palazzo, G., and Baumann, D. (2006). Global Rules and Private Actors. Towards a New Role of the Transnational Corporation in Global Governance. Business Ethics Quarterly, 16: 505-532.

Taylor, K. M. (2004). Thicker than Blood: Holding Exxon Mobil Liable for Human Rights Violations Committed Abroad. Syracuse Journal of International Law and Commerce, 31(2): 274-297.

Walsh, J. P., Weber, K., and Margolis, J. D. (2003). Social Issues and Management: Our Lost Cause Found. Journal of Management, 29: 859-881.

Signed for and on behalf of the Institute of Directors

April 2009

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