Memorandum submitted by Scottish Human
Rights Commission (SHRC)
INTRODUCTION AND
COMMENT ON
UNSRSG RUGGIE'S
FRAMEWORK OF
PROTECT; RESPECT
AND REMEDY
Business has become an increasingly powerful
social, economic and political actor yielding unprecedented power
and influence in an ever more globalised and privatised society.
The international, regional and national system of human rights
protection, originally conceived as protecting individuals from
abuses of state power, has struggled to keep pace with the impacts
of business in the protection of human rights.
The United Nations Secretary General's Special
Representative (UNSRSG), Professor John Ruggie report of April
2008 "Protect, Respect and Remedy: a Framework for Business
and Human Rights" was unanimously welcomed by the Human Rights
Council Governments and for the first time provides structure
for the protection of human rights from violations of business.
The SHRC would like to submit the following
observations which are explored more fully in our responses to
the JCHR questions below:
— The UK has an opportunity to demonstrate
leadership in developing a framework of action around the "state
duty to protect" human rights from the violations of business
which feeds into the business "responsibility to respect"
and focus on "access to remedies" for victims.
— Beyond the baseline responsibility of
business to "do no harm" we promote an approach which
harnesses the potential for business to contribute to the realisation
of human rights through social and environmental sustainability.
In this way business may contribute to the "social and
international order" (Article 28 Universal Declaration
of Human Rights) under which human rights can be realised
for everybody.
— The regulatory framework for business
accountability could be improved upon in many ways. For example,
by clarification of the meaning of "public authority"
under s6 of the HRA 1998, increased obligations under UK
company law, public procurement regulation guidance, the removal
of hurdles where possible to extraterritorial liability of parent
companies, and the strengthening of non-judicial mechanisms of
accountability.
— While companies should be encouraged
to conduct the "due diligence" requirements as set out
by the UNSRSG this should be viewed as the starting point of embedding
a human rights culture in business. The SHRC promotes a "human
rights based approach" to business which seeks to instill
human rights considerations into all business processes and decisions.
— The SHRC recognises that non judicial
mechanisms to address alleged breaches of human rights have an
important role to play in increasing corporate accountability
for human rights but also is aware of their inherent limitations
and does not see them as a substitute for judicial accountability.
— The SHRC can play a role in promoting
best practice to government, business and through the International
Coordinating Committee of National Institutions for the Promotion
and Protection of Human Rights. (ICC).
RESPONSES TO
CALL FOR
EVIDENCE QUESTIONS
THE DUTY
OF THE
STATE TO
PROTECT HUMAN
RIGHTS
1. How do the activities of UK businesses
affect human rights both positively and negatively?
The negative impacts of business on human rights,
both in the domestic context and also when UK companies are operating
abroad, have been well documented largely through civil society
campaigns and a few high profile legal cases. Many of the most
egregious and widespread abuses by companies can be identified
as being most prevalent in certain sectors and in relation to
certain rights (eg in a domestic context in the care sector and
the right to physical and psychological integrity under Article
8 ECHR, or when operating abroad the extractive sector and
the right to water, an adequate standard of living and the right
to health etc; or the information communications technology sector
and the right to freedom of expression and privacy etc). It is
clear, however, that business can potentially impact on all
internationally recognised human rights as recognised by the
UNSRSG Report of 2008.
The positive impacts of business, however, must
not be overlooked in terms of economic growth, sustainable development,
technological innovation etc. The SHRC promotes a view of business
that recognises the positive role that business can play in the
realisation of human rights by adopting business models which
put social and environmental sustainability at the core of business
strategy.
It is apparent that where business can see the
benefits brought by integrating human rights into their management
systems and business models that human rights will become less
a matter of business risk and more as business opportunity.
We believe that business, while having a baseline
"responsibility to respect" as identified by Professor
Ruggie, also should be viewed as having increasing responsibilities
to evolve their business practices in recognition of their place
in a changing world order which calls for increased sustainability
and accountability. Article 28 of the Universal Declaration
of Human Rights states that "Everyone is entitled to a
social and international order in which the rights and freedoms
set forth in this Declaration can be fully realised." The
implications of Article 28 must be that business should be
held to account for human rights violations and must evolve their
practices to take their place in a world order that promotes the
realisation of human rights for everybody.
2. How do these activities engage the human
rights obligations of the UK?
The UK is under various international treaty
obligations to respect, protect, fulfill and promote human rights.
It also has duties under the European Convention on Human Rights
and Fundamental Freedoms (1950) which have been incorporated into
domestic law through the Human Rights Act 1998 and the Scotland
Act 1998.
The UNSRSG has highlighted the "state duty
to protect" against the human rights violations of business.
This has legal and policy dimensions and includes taking all necessary
steps to prevent, investigate and punish violations of human rights,
and to provide redress. This duty is increasingly recognised as
applying to both the activities of business operating nationally
as well as the activities of transnational business operating
abroad.
The SHRC would promote a progressive interpretation
of the "state duty to protect" which includes recognition
of extraterritorial grounds of jurisdiction where appropriate
and also lends support and guidance to Ruggie's other "pillars"
of "the corporate responsibility to respect" human rights
and "access to remedy" for victims of human rights violations.
3. Are there any gaps in the current legal
and regulatory framework for UK business which need to be addressed,
and if so, how?
The Meaning of Public Authority under the
Human Right Act 1998: The SHRC welcomes the recommendations
of the JCHR Ninth Report of Session 2006-07 regarding urgent
action and legislative solutions to clarify the meaning of "public
authority" under the HRA 1998 in accordance with Parliament's
intention when passing the Act, and in light of the increasing
contracting out of public services to private service providers.
We welcomed the amendment to the Health and
Social Care Bill which sought to close the legal loophole created
by the case in the House of Lords of YL v Birmingham City Council
which ruled that private and voluntary sector care home providers,
including those caring for local authority funded clients, should
not be considered as performing public functions under the HRA.
It remains of concern, however, that people who arrange and pay
for their own residential care remain outside the scope of the
HRA. Furthermore other vulnerable groups, such as prisoner detainees
or those detained under Mental Health legislation, who are users
of contracted out public services are not covered by this amendment
and further legislative action is urgently required to clarify
the interpretation of "functions of a public nature"
in s6(3)(b) HRA.
Public Procurement: The UK's public sector
purchases supplies, services, and works contracts in compliance
with the procedural requirements of EU and UK public procurement
law. We believe that better use could be made of public procurement
law to both prevent the UK's public sector from purchasing in
a way which is detrimental to respect for international human
rights and to encourage private sector businesses to satisfy the
terms of public contracts in compliance with human rights norms.
Company Law: The introduction of the
"enlightened shareholder value" duty in the UK Companies
Act 2006 which requires directors to have regard to the longer
term factors including the interests of employees, suppliers,
consumers and the environment is welcome. However we consider
that it may be possible to introduce more progressive and far
reaching legislative provision which requires business to minimise
any negative aspects of their business activities regardless of
shareholder value.
Extraterritorial jurisdiction: Often
when human rights violations are committed by multinational companies
there may be many barriers to local remedies being sought by victims.
There have been attempts by victims to bring claims directly against
parent companies in their "home states".[128]
It appears there may be legal hurdles, however, to establish liability
of parent companies for the wrongdoings of their subsidiaries
and the doctrine of the "corporate veil" creates problems
for claimants. An examination of viable ways to remove hurdles
to establishing the liability of parent companies would be helpful
in increasing corporate accountability.
Non Judicial Grievance Mechanisms: It
is possible to bring complaints under the OECD Guidelines before
the UK national Contact Point ("NCP"). It is considered,
however, that while the NCP procedure provides a valuable route
of recourse for victims the process lacks transparency and legal
force and has no mechanism to provide compensation to claimants.
It is noted that an "Initial Review of
the Operation of the UK National Point (NCP) for the OECD Guidelines
for Multinational Enterprises" was published in January 2009 setting
out a review of the effectiveness of changes to the UK NCP. It
is hoped that the published procedures, statements of cases, improved
capacity and prioirtisation of awareness raising of the guidelines
will improve the functioning of the UK NCP. It is also hoped that
the UK NCP will continue to consult with stakeholders to improve
its effectiveness.
The SHRC would be in favour of further discussion
and consideration to be given to the establishment of a UK body
to deal with issues of human rights violations committed by subsidiaries
of UK companies in other countries which is complementary to existing
civil and criminal liability processes.
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 SHRC believes that a multi—stakeholder
approach to establishing guidance for business on upholding human
rights can often be the most effective way of ensuring accountability
through building a common framework of understanding of responsibilities.
The role of government is crucial for the success
of many of these initiatives in trying to bring abut a level playing
field of regulation for business internationally and ensuring
the most progressive standards are universally applied.
5. What role, if any, should be played by
individual Government departments or the National Human Rights
Institutions of the UK?
There is an important role for government departments
to promote best practice in human rights, initiate legislative
form and liaise with other governments on the issue of business
and human rights to work towards a level playing field of accountability.
In particular the Department for Business Enterprise and Regulatory
Reform (BERR), the Department for International Development (DFID),
the Department for Environmental Food and Rural Affairs (DEFRA)
and the Foreign Commonwealth Office (FCO) have key roles to play
in this regard. Where Government departments can assist in the
capacity building of other jurisdictions to hold business to account
through the building of political will and capacity this is welcome.
An example of progressive change could be the
promotion by the Office of Government Commerce (in England and
Wales) and The Scottish Procurement Directorate (in Scotland)
of guidelines that would encourage the public sector to purchase
by reference to human rights standards. The current legal framework
for public procurement permits the public sector to select tenderers
and award contracts to those who can demonstrate compliance with
human rights standards where these are linked to the contract
being procured. (An example might be the private sector running
of public sector care homes) At present there is no appropriate
guidance to assist the public sector realise the potential for
human rights compliant public procurement.
The Export Credits Guarantee Department could
also require companies to comply with the OECD Guidelines and
require adequate due diligence o their human rights impacts in
order to receive credit.
The National Human Rights Institutions of the
UK (NHRIS) can play a role in the promotion of best practice both
to government, business and within the global network of NHRI's
under their individual mandates.
The SHRC participates in the International Coordinating
Committee of National Institutions for the Promotion and Protection
of Human Rights (ICC). SHRC has been elected as representative
of the European group of NHRI's on two ICC steering committees
both of which may be of relevance in this context: human rights
and climate change, and on human rights and the business sector.
THE RESPONSIBILITY
OF BUSINESSES
TO RESPECT
HUMAN RIGHTS
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?
The UNSRSG recommends that the responsibility
to respect human rights requires a scheme of due diligence which
includes a human rights policy; impact assessments; integration
of policies throughout the company and monitoring and auditing
processes to track ongoing developments. While these processes
may be seen as core to meeting the baseline responsibility to
"do no harm" it could be further be explored how these
due diligence components can go further than being risk management
tools, reaching into the core of the business and becoming an
enabler of deeper change in business culture. For example, human
rights impact assessments may assess not only social risk but
also the creation of business opportunity.
The SHRC believes an underlying human rights
based, or rights aware, approach, can give concrete expression
to the concept of accountability. This means business must be
encouraged to take an approach which takes an understanding of
the human rights of stakeholders who are "rights holders"
as the starting point; identifies where the responsibility for
the protection of those rights lies and the legitimate role that
business can play in furthering the realisation of rights in the
communities and societies in which they operate.
A rights based approach to business must also
be underpinned by some of the core rights based principles such
as participation and empowerment of local communities, accountability,
non—discrimination and transparency. This approach can be
embedded in all due diligence processes and business culture.
An example of good practice and a rights based
approach being applied by a Scottish business is that of Cairn
Energy plc in Rajasthan India in 2005.[129]
Following a discovery of oil in the dessert region of Rajasthan,
India the company faced a dilemma where it required saline water
to support the extraction of oil but did not want to infringe
the local communities' right to water. Applying a "rights-aware
approach" the Company identified that the primary duty bearer
for meeting the right to water lay with the government but that
it nevertheless must avoid violating the local communities' rights
and allegations of perceived complicity in a violation of the
rights to water. The Company therefore accepted its responsibility
and engaged with relevant stakeholders to reach an understanding
of the shared responsibilities towards the right to water. Cairn
then provided support through the application of technical know-how
in exploring for further fresh water aquifers, capacity building
in improved drilling and completion technology and promoting considerable
local knowledge of water conservation. In this way Cairn was able
to meet its human rights responsibilities through capacity building
with state government and turned a human rights "risk"
into a business opportunity.
Should UK businesses' responsibility to respect
human rights vary according to:
(a) 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?
As outlined above there is a need for clarification
around the application of the HRA, particularly for contracted
out public services to private providers.
It is considered that even where the HRA will
not apply directly business should be made aware of the horizontal
effect of the Act and the responsibility and business case for
respecting human rights.
(b) Whether they are operating inside or outside
the UK; the size, type or nature of their business?
The responsibility to respect rights applies
to all business regardless of where they operate, size, type of
business etc. It is clear, however, that the way in which business
should be encourage to meet its responsibilities may vary. The
opportunities for business to further the realisation of human
rights will vary greatly according to the nature of the business
activity, but the underlying premise and rights based approach
will remain the same.
(c) How, if at all, should the current economic
climate affect the relationship between business and human rights?
The current global financial crisis could undoubtedly
negatively impact the business commitment to human rights and
propagate a view of "corporate social responsibility"
as voluntary action in times of profitability, rather than central
to the core competency of the business and part of a long-term
commitment to deliver social change.
It is our view, however, that the current economic
climate should serve to reinforce the need to embed human rights
in sustainable business practices. There has been an identifiable
shift in the international order and a resulting recognition of
the need for increased state regulation of business and accountability
of all actors in society. The financial crisis should be viewed
as opportunity to embed to change and human rights into the culture
of business.
EFFECTIVE ACCESS
TO REMEDIES
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?
As outlined above it is considered that the
existing legal framework of regulation is piecemeal both for companies
operating in the domestic framework and abroad. This serves to
increase the need for supporting and complementary non judicial
mechanisms.
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 both claimants and respondents);
As outlined above it is considered there may
be cause for closer examination of the law around extraterritorial
jurisdiction and parent company liability for its subsidiaries
when operating abroad.
Non-judicial remedies (for example, through the
operation of ombudsmen, complaints mechanisms, mediation or other
non-judicial means). If non-judicial remedies 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;
As outlined above it is hoped that the UK NCP
will continue to consult with stakeholders and improve its effectiveness.
It must be recognised, however, that non—judicial
mechanisms such as the OECD NCP's have inherent limitations which
must be clearly articulated (for example they lack the legal powers
to carry out investigations or provide remedies to victims.) Non—judicial
mechanisms require to be complemented and supported by judicial
mechanisms to provide an effective remedy.
As outlined above the SHRC would welcome further
discussion around the establishment of a new body to investigate,
sanction and provide remedies for abuses committed by UK companies
abroad and/or the establishment of a supra-national institutional
structure such as an Ombudsman, as mentioned in the UNSRSG's report.
Initiatives by business or other non-Government
actors
In accordance with Ruggie's framework we note
an increased interest by companies in establishing company level
grievance mechanisms. We consider that while these can serve to
increase accountability and foster a culture of human rights within
an organisation, it must be ensured they operate in accordance
with certain rights based principles and are supported by a robust
legal framework of accountability. With regard to all non judicial
grievance mechanisms in order to secure legitimacy and credibility
the rights of victims must be paramount and multi stakeholder
scrutiny around their operation must be maintained.
128 eg Lubbe v Cape plc [2000] 1 WLR 1545 (HL) Back
129
Cairn Energy plc Corporate Responsibility Report 2005, p20 Back
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