Memorandum submitted by the Institute
for Human Rights and Business
The Institute for Human Rights and Business
welcomes this opportunity to submit the Institute's views in relation
to your Session 2008-09 No.21 on business and human
rights, and in particular the mandate and work of the Special
Representative of the United Nations Secretary-General (SRSG)
for business and human rights, Professor John Ruggie.
The Institute (registered in the UK but with
a global remit, operations, and perspective) is chaired by Mary
Robinson, the former UN High Commissioner for Human Rights.[419]
The Institute brings together expertise from business, government
and civil society. We find great utility in the Protect, Respect
and Remedy framework developed by the SRSG and endorsed unanimously
by the United Nations Human Rights Council last year. The current
international financial and economic environment we all now face
has strengthened, not diminished, the need for a common framework
of universal social values, good governance and accountability
in relation to business activity. Human rights are ideally placed
to provide such a framework.
We will tackle the eight questions posed by
the Committee in the order presented.
IN RELATION
TO THE
DUTY TO
PROTECT HUMAN
RIGHTS
1. How do the activities of UK businesses
affect human rights both positively and negatively?
Business is a significant economic and social
actor, and as such has potential—and real—positive
and negative impacts on the full range of human rights as delineated
in the International Bill of Rights and the related Conventions
and expert opinions of the United Nations and International Labour
Organisation. This covers the spectrum of civil, political, economic,
social and cultural rights and includes internationally recognised
labour rights. UK businesses have positive and negative impacts
in a number of spheres of influence. These include:
— Through their direct operations, within
the UK or overseas, in respect of their own product development,
marketing, human resources, logistical, capital allocation, financial,
legal and other functions;
— Impacts on their own workforces, customers,
shareholders or other stakeholders, such as the communities surrounding
operations or the public more generally;
— Through the activities of suppliers,
partners, associates, contractors or others with whom the business
has a contractual arrangement;
— Through the action of others, including
businesses and governments, with whom the UK business may have
a beneficial relationship. (The notion of "complicity"
is indeed complex; but a business in close proximity or relationship
with a perpetrator of human rights abuse runs the risk of complicity,
if the business has assisted the abuse in any way, and has known
about it and done nothing to prevent it from occurring).
If the above categories were self-evident and
the relationships clearly understood, then the work of the Joint
Committee, and indeed our own, might be relatively clear-cut.
However, there are a number of complexities which make the relationship
between UK (as well as all other) companies and human rights less
clear:
— What are the additional precautions a
business should take, and what, if any, additional responsibilities
may they have, when a government is unwilling or unable to fulfil
its obligation to protect human rights? A state may be unable
to protect human rights due to resource constraints, or lack of
control over the territory—particularly in conflict situations—or
may be unwilling to do so, due to, inter alia, corruption, conflict,
discrimination, lack of accountability, and/or weak governance.
— How should business operate when national
law or custom is in conflict with international human rights norms?
— What are the duties of the state, and
responsibilities of a business, when the business in question
is state-owned, partly state-owned or operated; or when the business
is performing traditional state functions, notably public service
provision?
— Do the responsibilities of companies
change when they are small and medium-sized and require the state
to provide resources to help them meet their responsibilities?
— How should governments and businesses
deal with dilemmas created between competing claims of different
rights-holders or conflicts between specific rights themselves?
Clearer analysis and greater consensus around
such issues in relation to specific business sectors and geographies
is critical in order to determine meaningfully the positive and
negative effects of UK businesses on human rights.
2. How do these activities engage the
human rights obligations of the UK?
The complexity of the relationship between business
and human rights requires the UK Government to think carefully
about all its international human rights commitments in relation
to business. This includes the human rights covenants and conventions
of the United Nations and ILO, the European Convention on Human
Rights and also international humanitarian law (eg the Geneva
Conventions) and international criminal law (eg the Rome Statute)
commitments to which the UK is party. These matters are not only
of concern to the Foreign Office and Department for International
Development, but to all domestic UK Government Departments engaged
in social and economic provision within the UK as well as the
administration of justice.
Several countries have taken steps to ensure
greater policy coherence between different government departments
with regard to business and human rights. Some governments have
appointed ministers responsible for cross-department information
sharing and coordination; others, such as France and Sweden, have
appointed ambassadors to foster greater integration of human rights
principles and standards between government departments: including
those addressing business and other trade and economic related
issues. In some countries, like Kenya and South Africa, it is
the National Human Rights Institution that has played this coordinating
role. In the UK, there is great need and great opportunity for
one or both of these approaches to be harnessed.
3. Are there gaps in the current legal
and regulatory framework for UK business which need to be addressed,
and if so, how?
Whilst the UK Government has signed and ratified
most of the core international human rights Conventions, there
is very little recourse for British or other citizens to take
action against UK registered companies under most of these. Even
within the context of the European Convention on Human Rights,
the extra-territorial applicability to the actions of business
is very limited. The one mechanism available for this purpose,
the National Contact Point (NCP) of the OECD Guidelines on Multinational
Enterprises, has no legal standing at present. The NCPs, it should
be noted, are meant to provide mediation between parties in dispute
that can be settled in a non-judicial setting. While such a mechanism
may be appropriate in dealing with certain kinds of rights-based
disputes, they are frequently inappropriate in cases of grave
abuses, which often require legal recourse and, in some cases,
prosecution. A recent case,[420]
involving a UK-registered company operating in the Democratic
Republic of Congo, in which the NCP found that the company had
breached the Guidelines and issued recommendations for remediation
only to have the recommendations summarily ignored, shows the
gap that exists in the UK's regulatory framework.
Another concern is what SRSG John Ruggie has
termed the lack of 'horizontal' and 'vertical' integration of
existing human rights policies with those relating to trade, investment,
corporate governance, finance and other government policy that
impacts on business.[421]
The UK Government itself could do much more to align policies
and practices, such as ensuring that export credit guarantees,
political risk insurance schemes, advisories to businesses, agreements
UK companies sign as investors with host governments, or bilateral
investment or trade treaties, are consistent with existing or
future human rights commitments. It is distinctly inconsistent
that the UK Government encourages overseas governments to improve
their human rights record, if other areas of international policy
prohibit or undermine efforts to do so in relation to UK or domestic
businesses.
Setting up a national commission on Business
and Human Rights would constitute one potentially useful way through
which the UK Government could explore strategies aimed at closing
existing legal and regulatory gaps. The Institute would also encourage
the UK Government to work in partnership with other EU states,
and harness the commitment of the Commission, Parliament and Council
of the European Union to achieve a greater alignment of policy
in these areas. As many businesses (including the Business Leaders
Initiative on Human Rights[422])
have made clear, businesses value clarity and consistency. They
look for greater certainty and a level playing field across international
borders with regard to human rights relevant issues. Many governments
today tend to view 'business and human rights' exclusively as
an aspect of corporate social responsibility. While many CSR initiatives
are valuable, their (often) voluntary status[423]
has resulted in approaches that give inadequate attention to legal
matters connected to international human rights standards and
obligations.
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?
Our own experience of working closely with UK
companies around the world indicates that adequate guidance is
largely absent. Whilst there is very good work within specific
business sectors[424]
in raising awareness and developing best practices, as well as
the guidance provided by several voluntary organisations[425],
the state duty to protect human rights requires the UK Government
to take a much more strategic position than has been the case.
At a recent meeting organised by the Swiss Department of Foreign
Affairs, the Institute was invited to present its views on state
responsibility in 'fragile zones'.[426]
Activities the UK Government can initiate immediately
include extending guidance information and training offered by
UK Government departments to their own staff being posted overseas
- in particular to oversee UK involvement in those business sectors
and those countries where the risk of abuse and complicity is
highest. Improved sharing of human rights intelligence and capacity-building
by UK Government missions overseas are urgently needed, in particular
in countries with insufficient domestic/national protection of
human rights.
The Institute urges the UK Government either
to create a UK Commission to deal with the issue of awareness
or capacity amongst others, and/or to increase the remit and capacity
of the Equalities and Human Rights Commission to do so.
5. What role, if any, should be played
by individual Government departments or the National Human Rights
Institutions of the UK?
In addition to the points already made under
Question 4 above, the UK Government should be mindful also
when the State Duty to Protect in relation to business requires
greater alignment at the European and global levels. Evidence
shows that there is a need for much greater extra-territorial
accountability of companies in relation to human rights. What
is less clear is how much of this should be advanced at the domestic
level, at the European level or through inter-governmental organisations
such as the United Nations, OECD or perhaps even WTO or the Bretton
Woods institutions.[427]
Certain actions require global co-operation, others can be advanced
unilaterally - such as clarifying how the UK's existing treaty
obligations relate to UK business operating overseas.
It has been noted that the UK Equalities and
Human Rights Commission does not yet play the active role in the
field of business and human rights as National Human Rights Institutions
have done in countries such as Denmark, South Africa or Kenya.
It remains less engaged in business and human rights than many
of the organisations accredited to the Paris Principles.[428]
This is mystifying and does not reflect the interests of either
UK business or civil society. It is worth noting that the newly-formed
Scottish Human Rights Commission intends to be active in the arena
of business and human rights.
IN RELATION
TO THE
RESPONSIBILITY OF
BUSINESSES TO
RESPECT HUMAN
RIGHTS
6. How should businesses take into account
the human rights impacts of their activities?
Business activities can have positive or negative
impacts on human rights. As the SRSG has noted, undertaking human
rights impact assessments before initiating a specific project
is necessary in some cases, and desirable in most cases. There
are instances when specific business actions cause abuses—for
example—pollution of the environment, use of security forces
that use disproportionate force, treating different consumers
differently and denying access to rights-linked essential services
where some consumers are not able to pay, such as water.
Timely risk assessment and due diligence can
reduce the likelihood of such abuses. But even businesses that
undertake such assessments, and perform due diligence, may find
that some of their activities lead to human rights abuses, even
when not intended.
Some examples of bad practice include:
— Approaches that promote knee-jerk or
damage limitation strategies (such as a business dropping a supplier
when reports of use of child labour emerge, regardless of the
impact on workers or the community or consideration of the potential
for the business to influence future practices of the supplier
through increased training and other support);
— Simplistic and/or limited understanding
of human rights, or codes of conduct which include only references
to labour rights, or civil/political rights, but ignore the broader
international human rights agenda and the indivisibility between
rights;
— Exclusive preference for voluntary business
approaches rather than a more carefully considered analysis of
where mandatory regulation by government may be needed and more
effective not only in terms of costs to business but in terms
of results which are consistent with human rights obligations.
Some examples of better practice include:
— Approaches which integrate community
consultation and where impact on local communities can actually
be measured objectively and accepted by the communities themselves;
— Approaches that address the complexity
of human rights and the need to attempt to address some of the
systemic issues as well as their manifestations in the workplace;
— Multi-stakeholder approaches that bring
together business, government, trade unions and/or civil society
organisations to develop best practice within specific sectors
or to address specific challenges, such as labour practices or
use of security forces;
— Analogous multi-stakeholder approaches
focusing in-country in particular host countries where UK businesses
operate and/or address the value chain, or particular commodities:
such as cocoa, palm oil, cotton, diamonds or sugar.
The Institute for Human Rights and Business
does not take a specific view on the public authorities in relation
to the European Convention on Human Rights.[429]
It is clear, however, that the state duty to protect against human
rights abuses committed by third parties, including business actors,
is a legal obligation and is, as such, of a higher and different
nature of responsibility than the business responsibility to respect
all human rights. It should be stressed, however, that the responsibility
of a business increases when it operates in lieu of state (in
certain "weak governance zones") or when it takes over,
under contract, functions normally performed by the state (such
as through privatisation of essential services).
It is also the view of the Institute that UK
business should not restrict its responsibilities purely in terms
of the European Convention on Human Rights, given that the Convention
offers limited inclusion of economic, social and cultural rights.
The same level of responsibilities should apply to UK business
wherever it is operating. Similarly business responsibilities
do not change based on the level or size of corporate operations,
particularly when measured against the severity of impacts caused.
EFFECTIVE ACCESS
TO REMEDIES
7. Does the existing 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?
The short answer is 'no' - existing mechanisms
and frameworks are clearly insufficient. At the same time, there
is single no bullet—magic or silver—that can deliver
the necessary level of accountability and redress. A small number
of complementary mechanisms are likely to be needed, some domestic
others extra-territorial.
Whilst UK businesses need to be more accountable
for their actions, this should not be seen outside the context
of:
— The accountability of the UK Government
for its actions overseas;
— The accountability of businesses registered
in other jurisdictions - as diverse as Switzerland or China—whether
listed or not, whether owned by the state or the private sector;
— The accountability of other UK-registered
non-state actors, including NGOs.
8. Possible changes could include:
— Judicial remedies—The Institute
does not claim expertise in UK law. Never-the-less, it is clear
that it is not easy to bring business and human rights cases to
court where the extra-territorial application of laws become necessary
(the latter is essential while dealing with conduct of UK companies
overseas, particularly in areas of weak law enforcement). Whilst
the European Convention on Human Rights and the UK Human Rights
Act afford a range of protections to individuals, they are limited
in both their geographical reach and also applicability to business.[430]
The need for stronger judicial remedies is necessary, and the
Institute encourages further exploration of options, in consultation
with human rights organisations and relevant stakeholders.
— Non-judicial remedies. The Institute
believes that judicial and non-judicial mechanisms can be complementary
if their remits are clear.[431]
There are strong arguments in favour of—and against—creating
a single Ombudsperson (as against a committee) - and that further
research is essential to develop the best model for the UK, in
order to achieve tangible results.
— Government Initiatives: The Institute
believes that prima facie the greatest need in the UK is for a
more strategic positioning of the government's approach and thinking.
Government activities often remain poorly aligned and sometimes
contradictory. A strong central focal point—at a senior
level - within the Government can help identify existing gaps
and the need for new legislation.
— Initiatives by business and non-Government
actors. The Institute supports civil society-led and business-led
activities within the sphere of business and human rights, provided
they are based on the underpinning principles of a rights-based
approach. Business tools and best practice are often best developed
by businesses themselves and correspondingly, civil society engagement
is critical for effective accountability mechanisms. The Institute
encourages the UK Government to take leadership where necessary
to underscore its commitment, to ensure quality control, and to
set an example in this sphere. It can do so by re-evaluating its
public procurement policies by requiring companies to follow a
specific human rights reporting code, impact assessment standard,
or other measure. Some other Governments have already selected
specific reporting or performance codes in relation to their own
procurement or the behaviour of state-owned enterprises.[432]
The Institute hopes this submission is helpful
and we would be happy to attend any hearing or provide more specific
evidence on any of the points raised.
Institute for Human Rights and Business
May 2009
419 The Institute's Board members are currently: Mary
Robinson (Chair), Chris Marsden (Vice-Chair), Bennett Freeman
(ex-U.S. State Department), Wambui Kimathi (Kenyan National Human
Rights Commission), Irene Khan (Secretary-General at Amnesty International),
Kavita Prakash-Mani (senior executive at Sustainability), Caroline
Rees (Director at Harvard Kennedy School), and Peter Woicke (ex-Managing
Director of the International Finance Corporation). A further
four Board members are to be appointed shortly. www.institutehrb.org Back
420
www.berr.gov.uk/files/file47555.doc Back
421
For example, the Foreign Office, DFID, and the then DTI had differing
perspectives on trade in conflict diamonds from African countries.
DFID was focused on poverty alleviation, and saw trade restraints
as interfering with artisanal miners' livelihood; DTI saw any
restraint as interfering with the policy of removing trade restrictions;
and the Foreign Office was leading the effort to get the Kimberley
Process Certification Scheme adapted quickly, to give meaning-and
teeth-to UN sanctions on diamonds from Sierra Leone and Liberia.
In the end, the three departments agreed, but after presentations
by human rights NGOs to representatives of DTI and DFID, to explain
the gravity of the situation. Back
422
www.blihr.org Back
423
There is no single agreed definition of Corporate Social Responsibility,
which indeed can be seen as one of the limitations of the term.
Some definitions, such as that currently adopted by the European
Commission, stress only voluntary approaches. Back
424
Such as, for example, the extractive sector, the apparel sector,
and a few commodities. Back
425
Such as: human rights NGOs, peace-building NGOs, development NGOs,
and business-focused associations and fora. Back
426
Five key areas of home government activity were outlined, namely
to: (i) Advise: Make information and legal implications accessible;
(ii) Warn: Public or private, as appropriate; (iii) Prevent: Restrict
trade, refuse export finance or access to political risk insurance,
deny concessional lending; (iv) Prosecute and Punish: Publicise
bad conduct, institute inquiry, remove supplier status, prosecute
in the face of evidence of clear breach of law, cooperate with
international tribunals; and (v) Promote: Lobby host government;
act in concert with others; train judges, police, army; channel
development aid to security sector reform; assist improved prison
conditions. Back
427
It is noted, for example, that the International Finance Corporation
(part of the World Bank Group) has an Ombudsperson for complaints
(including some aspects of human rights) in relation to projects
funded or part-funded by the IFC. Back
428
http://www.unhchr.ch/html/menu6/2/fs19.htm Back
429
As requested in the Call for Evidence Back
430
Unlike the rulings of the Constitutional Court in South Africa,
for example. Back
431
Many large-scale cases have their roots in smaller grievances
that have been poorly handled, or stem from protests/violence/escalation
that was generated due to a lack of effective grievance handling
for entirely separate issues. Non-judicial mechanisms have a huge
role to play in dealing with these lower-level grievances and
thereby helping prevent some of the egregious cases. Back
432
For example, the Swedish Government's requires its State Owned
Enterprises to report using Global Reporting Initiative (GRI)
indicators. Back
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