Memorandum submitted by Fund for Peace
There has been a movement in the human rights
community for legislative remedies to force companies to uphold
human rights standards as well as increased litigation against
companies accused of human rights violations. Enforcement of human
rights is best achieved through a focus on the desired outcome,
rather than on mechanisms. At the end of the day, the international
community should be most concerned with ensuring that the greatest
number of people enjoy the protection of their human rights. These
human rights include not only political and civil rights, but
access to those things that make life possible, like water, food,
employment, health and other needed services, and a healthy environment.
Protection of human rights is, of course, the
first responsibility of governments. Most cases against companies
accused of complicity in human rights abuses occur in countries
where the government either lacks the political will or the ability
to protect its own citizens' rights, or where the government is
itself a perpetrator of abuses. In these instances, while governments
are culpable, companies—guilty or not—may become the
focus of protest particularly when communities have no recourse
against their own governments while companies operating in the
area are visible and accessible.
If companies are indeed complicit in human rights
abuses, they should be held accountable. Legislation and litigation
focused on corporations run the risk, however, of taking attention
away from the governments whose duty it is to protect their citizens.
In some cases, the governments responsible for the abuses escape
censure and even benefit by having the corporation take the rap
for crimes the government committed and possibly continues to
commit. Rule of law and good governance should start with government;
corporations then have a duty to adhere to local law and community
standards.
In impoverished communities, people may be less
concerned whether it is the government or a corporation that is
building infrastructure or providing services. Their immediate
interest, understandably, is to have potable water, food for their
families, and educational and economic opportunities for themselves
and their children. Sometimes, in the most challenging environments
around the world, multinational corporations, including many British
companies, provide the only hope of attaining such human and social
benefits.
The most important foundation for the protection
of human rights is a binding social contract between a government
and its citizens. This social contract is created when the people
and companies pay taxes to the government, which in return delivers
services, including not only infrastructure, but security and
social services for livelihood and prosperity. If companies assume
this role, which may be necessary in some areas to obtain the
social license to operate, then a company has to consider carefully
how it can do this without possible negatively affecting the current
or future social contract between the government and its citizens.
Laws that are not well thought out could force companies into
this position without allowing them the flexibility to consider
ways to not only provide services but help build government capacity
and positively impact the potential for a stronger social contract
between the government and its citizens.
Furthermore, it is not yet clear how companies
can best contribute to the protection of human rights. It is not
likely that we will ever be able to develop universally accepted
international standards that are achievable in all instances.
Careful analysis is necessary to understand the needs and capacities
of local communities and the performance of host governments.
Laws forcing companies to apply a pre-determined standard to address
the wide range of human rights concerns that may exist could force
companies to make choices that are not in the long-term sustainable
interest of the communities.
The Fund for Peace is not against legislation
that could protect human rights and improve the behavior of corporations
across the board. Indeed, drafted properly we would support such
legislation. However, we have not yet seen legislation with practicable
application to companies operating in extremely varied and complex
environments that would lead to overall improvements in human
rights. Sanctions, for example, must be "smart"—that
is, designed to target perpetrators and not hurt innocent people
or organizations. In fact, if negative unintended consequences
are not anticipated, legislation could end up forcing companies
with the best practices out of an area to be replaced by companies
that have not adopted voluntary codes of conduct, developed and
implemented policies on human rights, undertaken appropriate social
and environmental audits, or made responsible investments in communities.
Companies have, in fact, been forced to leave areas through various
means already, as in the Sudan, which many recognize to have yielded
a worse result for the impacted communities.
Moreover, most of the innovative and successful
programs we have witnessed over the last decade come from companies
pro-actively adopting strategies that enable them to operate more
safely and sustainably in areas that lack public services and
the rule of law. While it is true that some change has come about
from the valued efforts of international NGOs in calling attention
to companies that were failing to meet their ethical obligations,
a lot of change has also come in response to necessities on the
ground.
We recognize a positive trend in corporations'
understanding of social, economic and political complexities and
an increase in their positive impact on human rights abroad, particularly
in the extractive industry. British companies are among those
who have played and continue to play a leading role in defining
the responsibilities of companies and how to achieve them. There
are still many challenges to face, and no one has all the answers.
In the protection of human rights and the appropriate role of
corporations, we believe there is much room for development and
innovation. We believe companies are increasingly undertaking
responsibility voluntarily and for their own reasons, and that
sustained engagement with business—not compulsory legislation
in a one-size-fits-all approach—is the way to move forward.
The role of business in the promotion of sustainable human rights
and better governance is an important one. In most instances,
it is far more effective to make them partners in this enterprise
than to resort to mandatory legal requirements that could result
in unintended negative consequences.
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