Memorandum submitted by Synergy Global
Consulting
Synergy Global Consulting (Synergy) works
with organisations to improve the way they understand and manage
their relations with society, with a particular focus on the extractive
industries and their operations in developing countries. With
offices in Oxford, UK; Johannesburg, South Africa and Abu Dhabi,
UAE, Synergy has worked in over 40 countries working with
private sector companies (including many UK companies), civil
society organisations and governmental departments (notably the
Department for International Development—DFID). Within its
line of work Synergy has had the experience of helping extractive
companies understand and manage potential human rights impacts
and risks.
INTRODUCTION
Synergy welcomes the Joint Committee on Human
Rights' decision to inquire into business and human rights. Acknowledging
the progress which has been made over the last few years advancing
the multi stakeholder dialogue on business and human rights, Synergy
welcomes steps which are now being taken to operationalise these
dialogues, including the work of the Secretary General's Special
Representative (SGSR) John Ruggie, and the engagement of the UK
Joint Committee on Human Rights.
Synergy has based its response to this call
for evidence on the knowledge, experience and understanding of
the human rights and business context gained from working with
both UK and non-UK extractive companies with operations outside
the UK. Most human rights cases that involve businesses tend to
occur outside of the UK and within the infrastructure, energy,
textiles and extractive industries sectors. This has been reinforced
by John Ruggie both in his 2008 "Protect, Respect, Remedy"
report and its 2009 successor "Business and human rights:
Towards operationalising the 'protect, respect and remedy' framework
recently submitted to the Human Rights Council". While acknowledging
the need to encourage UK based companies to manage their human
rights risks for UK based operations, Synergy believes the spirit
of the Ruggie framework is predominantly focused on addressing
the most serious forms of human rights abuse that tend to be most
prevalent in areas of weak governance. Synergy has extensive experience
operating in areas of weak governance and engages at both a field
and policy level with the types of human rights risks, which companies
face when operating in such environments. As such our submission
of evidence will focus on UK companies operating outside the UK
and will cover:
1. An understanding of the current context, including
the key drivers for change.
2. Recommendations for Her Majesty's Government
(HMG) to influence these drivers and to support UK companies operating
outside of the UK in managing their human rights risks.
THE CURRENT
CONTEXT
The role of the state in protecting individuals
from corporate sponsored abuse is at the centre of the international
debate on business and human rights. In both his 2008 and
2009 reports Ruggie iterates that the State duty to protect
against third party abuse is overtly grounded in international
human rights law.[279]
Despite this Ruggie maintains that "the business and human
rights domain exhibit(s) considerable legal and policy incoherence"
both horizontally across government departments and vertically
in failure to adopt and implement international law and policy.[280]
According to Ruggie, this "results in ambiguous and mixed
messages to business from Governments and international organizations".[281]
The second element of Ruggie's business and
human rights framework concerns businesses' responsibility to
respect human rights. Human rights violations by businesses are
routinely brought to public attention by civil society groups
and the media. Many high profile UK extractive companies have
been accused of complicity in various human rights violations
as a result of their operations outside the UK. Within this context,
UK companies operating outside the UK are having to engage with
human rights as a result of a series of key drivers, outlined
below:
BUSINESS DRIVERS
— Improved practices in companies: Companies
are increasingly considering human rights in business practices.
This is particularly notable in companies that have both learned
from experience but have also been influenced by individual actors
within those companies that have recognised the business and moral
imperative for engaging with human rights.
— Role of investors and shareholders: There
is increasing recognition that human rights provisions need to
better inform UK sponsored investment into countries of weak governance
to ensure that such investment does not undermine the ability
for such countries to adhere to international human rights commitments,
as well as to ensure management of the material financial risks
that human rights issues can pose. HMG has influence on this through
regulation of the financial sector in the UK and through its shareholdings
in various financial institutions.
— Role of civil society: The UK is in many
ways at the forefront of the business and human rights debate
with a host of NGOs including Amnesty International, Global Witness,
ActionAid, CAFOD, Christian Aid, RAID, CORE Coalition, The Corner
House, Environmental Justice Foundation, Friends of the Earth,
Greenpeace, Oxfam, International Alert and trade unions including
the TUC engaging with and pushing the business and human rights
debate forward and in some cases initiating consumer pressure
campaigns to affect change.
— Role of international standards and multi
stakeholder initiatives: HMG and UK based companies support a
number of international standards and initiatives that address
the link between business and human rights including the Global
Reporting Initiative, the UN Global Compact, the Voluntary Principles
on Security and Human Rights, the Extractive Industries Transparency
Initiative, various certification initiatives, eg SA8000, Fair
Trade, and various initiatives for fair trade, and ethical and
responsible mineral extraction. There has also been an increase
in the number of multi stakeholder initiatives and partnerships
aimed at facilitating the engagement of UK companies with human
rights including the International Business Leaders Forum and
the Business Leaders Initiative on Human Rights.
LEGISLATIVE AND
GOVERNANCE DRIVERS
— Role of home country government legislation
and governance: At present efforts are clearly being made by HMG
to address business engagement with human rights through legislative,
policy and governance based initiatives. The role of the Alien
Tort Claims Act on influencing the behaviour of some US-based
companies demonstrates the potential influence that effective
home country legislation could have.
— Role of host country government legislation
and governance: Most of the worst cases of business related human
rights violations occur in countries of weak governance. Much
of the UK's overseas aid programme is already focused on improving
governance and therefore has potential to help host states improve
their capacity to protect human rights.
In seeking to ensure businesses respect human
rights, some arguments emphasise strengthening and creating further
legislative drivers, whilst others argue that current business
drivers are sufficient and more appropriate to the business sector.
Synergy believes that both a strengthening of legislation and
the development of a more enabling business and human rights environment
are necessary to ensure companies uphold their responsibility
to respect human rights.
As part of its duty to protect, a government
clearly has the duty to ensure businesses uphold their responsibility
to respect human rights. As such, HMG needs to address its role
within business and human rights drivers and identify specific
actions that would ensure UK companies operating outside of the
UK in fulfilling their responsibility to respect human rights.
RECOMMENDATIONS
The following recommendations detail specific
actions that could be undertaken by HMG to support UK companies
in fulfilling their human rights responsibilities. These recommendations
are based on Synergy's field and policy level experience, including
our work with DFID. They also draw on a variety of recommendations
and frameworks including:
— John Ruggie's 2008 Report: "Protect,
Respect and Remedy: a Framework for Business and Human Rights"
and the recently published 2009 follow up, "Business
and human rights: Towards operationalising the 'protect, respect
and remedy' framework";
— DFID's 2006 White Paper;
— The International Development Committee
report on Private Sector Development (Fourth Report of Session
2005-06);
— National Roundtables on Corporate Social
Responsibility (CSR) and the Canadian Extractive Industry in Developing
Countries: Advisory Group Report 29 March 2007;
— Outputs from the Mining, Minerals and
Sustainable Development (MMSD) programme; and
— The OECD Guidelines for Multinational
Enterprises and Risk Awareness Tool for Multinational Enterprises
in Weak Governance Zones.
HMG demonstrably has influence over the level
of engagement companies operating outside the UK have with human
rights, and is already taking a wide variety of actions in this
area. However, these actions can sometimes be overlapping and
occasionally contradictory. We hope that this enquiry will help
identify all of these different government actions and be an important
step in developing a coordinated, consistent and strategic government
approach to this issue.
1. Supporting improved practices in companies
1.1 Encourage UK-based companies to endorse
SGSR John Ruggie's Protect, Respect and Remedy framework.
1.2 Encourage companies to include a specific
commitment to human rights in their statement of business principles
and codes of conduct.
1.3 Encourage companies to produce explicit
human rights policies and ensure that they are integrated, monitored
and audited.
1.4 Support the development and implementation
of Human Rights Impact Assessments. that can be integrated into
other assessment activity.
1.5 Encourage companies to put in place
necessary management systems to ensure that assessment outcomes
are integrated into business decision making.
1.6 Encourage companies to develop monitoring
and reporting mechanisms to track performance, notably producing
public reports according to GRI standards.
1.7 Encourage companies to develop grievance
mechanisms to ensure that specific rights holders affected by
company activities have access to remedy.
2. IMPROVING
THE ROLE
OF INVESTMENT
2.1 Promote human rights due diligence of
business investments made by financial institutions in which HMG
has a shareholding (eg IFC, EBRD, CDC and Actis).and UK banks.
2.2 Engage, facilitate, and encourage businesses
and the financial sector to understand the linkages between human
rights performance and financial value and risk management and
help make this link more relevant to financial sector decisions.
2.3 Ensure that all investment agreements
undertaken to facilitate UK foreign investment are not undermining
a host countries ability to achieve its legitimate policy objectives,
including its international human rights obligations.
2.4 Work with country partners to ensure
that stabilisation clauses included within bilateral investment
treaties do not undermine the ability of the host country to impose
environmental and social regulation on foreign investors.
2.5 Improve advisory services provided by
FCO to UK companies investing abroad to ensure that they are aware
of their obligations under UK law, international law and the law
that they are operating in as well as international norms and
human rights standards.
3. CIVIL
SOCIETY ENGAGEMENT
3.1 Continue to support civil society organisations
that play an effective role in supporting business engagement
with human rights.
4. Supporting international standards and
multi stakeholder initiatives for business conduct.
4.1 HMG could consider making an overt statement
in support of Ruggie's Protect, Respect and Remedy framework.
4.2 HMG could consider the recommendations
outlined in Ruggie's Business and human rights: Towards operationalising
the "protect, respect and remedy" framework particularly
with regard to the State duty to protect both within the UK and
extraterritorially.
4.3 Continued support for FCO's lead role
in the implementation of the Voluntary Principles on Security
and Human Rights.
4.
HMG could use existing forums to enhance international
cooperation and peer learning with respect to the business and
human rights framework, including treaty bodies, the Human Rights
Council's Universal Periodic Review, National Contact Points under
OECD Guidelines and regional human rights mechanisms.
4.5 Work to make the OECD Guidelines for
Multinational Enterprises more effective in promoting responsible
business conduct, particularly in countries with weak governance,
including continuing to improve the effectiveness of the National
Contact Point.
4.6 Support the implementation of the OECD
Risk Awareness Tool for Multinational Enterprises in Weak Governance
Zones, and other tools for companies operating in fragile states.
4.7 Continue to provide input and support
towards incorporating a human rights framework within the World
Bank Group and the regional development banks standards and guidelines,
and the commercial banks' Equator Principles.
4.8 Encourage initiatives that aim to develop
and implement standards that improve the role of business in human
rights, including the Business Leaders Initiative on Human Rights.
4.9 Work with industry associations and
other stakeholders, to develop and distribute information tools
and targeted educational programmes to support the continuous
improvement of human rights performance among companies.
4.10 Support research partnerships for assessing
corporate behaviour and human rights.
5. UK governance, policy and legislation
5.1 Develop a formal policy on business
and human rights, and a cross Whitehall strategic plan for implementing
that policy.
5.2 Improve coordination between key UK
Government Departments, eg DTI, FCO, and DFID on business and
human rights.
5.3 Revise the Companies Act (2006) to ensure
UK companies operating outside the UK are required to undertake
full due diligence of their potential human rights impacts.
5.4 Provide guidelines to supplement the
Companies Act (2006) to ensure companies understand the due diligence
process and enable them to identify human rights issues as material
issues to disclose to shareholders.
5.5 Support the further integration of the
role of business and human rights into PRSPs.
5.6 Improve FCO's capacity to ensure that
UK companies operating abroad are aware of the local political,
social and cultural context in which they intend to operate, particularly
in weak governance zones.
5.7 Establishing an independent ombudsman
to provide advisory, fact-finding and reporting functions relating
to grievances raised against UK listed and financed companies.
6. Host governance and policy
6.1 Commission, support and conduct assessments
in weak governance countries to further determine the linkages
between business and human rights.
6.2 Based on these assessments, review HMG's
programmes in these countries.
Synergy Global Consulting Ltd
May 2009
279 SGSR John Ruggie Business and Human Rights:
Towards operationalising the "protect, respect and remedy"
framework April 2009 Back
280
Prepared Remarks by SRSG John Ruggie Public Hearings on Business
and Human Rights Sub-Committee on HR European Parliament Back
281
SGSR John Ruggie Business and Human Rights: Towards operationalising
the "protect, respect and remedy" framework April 2009 Back
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