Memorandum submitted by Business for Social
Responsibility
Thank you for the opportunity to provide evidence
to the Joint Committee's inquiry on business and human rights,
one of the most important human rights debates of our time.
A leader in corporate responsibility since 1992,
Business for Social Responsibility (BSR) works with its global
network of more than 250 member companies to develop sustainable
business strategies and solutions through consulting, research,
and cross-sector collaboration. Our membership includes 17 multinational
companies based in the UK and many more with significant operations
in the UK. With six offices in Asia, Europe, and North America,
BSR leverages its expertise in human rights, economic development,
environment, and transparency and accountability to guide global
companies toward creating a just and sustainable world.
We welcome the Joint Committee's decision to
acknowledge the framework for business and human rights proposed
by John Ruggie, the UN secretary-general's special representative
on business and human rights, as a significant step forward in
the effort to clarify the responsibilities of state and non-state
actors for human rights.
We can only overcome the considerable challenges
we still face in this area if all actors, including government,
businesses, and civil society collaborate to develop effective
solutions to these challenges. This is why we strongly support
the Joint Committee's inquiry into this subject and its approach
to seek input from a variety of stakeholders.
The UK has been and continues to be at the forefront
of this important progress. Many UK businesses and the UK government
have catalyzed leadership initiatives on human rights and thus
helped set best practice standards for managing company human
rights impacts. It is critical that both the government and companies
continue this leadership on human rights, as much work remains
to be done.
Over the past decade, we have seen significant
progress in the business and human rights sphere. Where once multi-stakeholder
dialogue on human rights was rare, now, several initiatives are
thriving, from the Extractives Industry Transparency Initiative
and the Voluntary Principles on Security and Human Rights, of
which the UK Government is a co-founder, in the energy and mining
sectors; to the Ethical Trading Initiative, the Fair Labor Association,
and SA8000 on labor rights; to the newly founded Global Network
Initiative on free expression on the Internet. All of these initiatives
capture the promise of dialogue, debate, and collective action.
Where once there was little or no institutional
support for advancing business support for human rights, now there
is the UN Global Compact and the International Finance Corporation's
social standards, both of which include human rights standards.
Where once there was little human rights information
available and accessible for business, we now have the rich resource
of the UK based Business & Human Rights Resource Centre. A
large number of companies have established institutional support
for the human rights debate.
While there are several signs of important progress
in strengthening corporate human rights practices, much work remains
to be done. Below, I will outline important areas for further
debate as we see them, seeking to answer the Committee's specific
questions, and following the Committee's suggestion of using the
Ruggie framework's three pillars as an outline:
1. THE STATE
DUTY TO
PROTECT HUMAN
RIGHTS
Weak Governance and Rule of Law
Human rights protections remain the primary
responsibility of states. This responsibility includes governing
corporate human rights impacts through effective regulation and
enforcement. Yet, many governments remain unwilling or unable
to effectively protect their citizens' human rights. Companies
operating in those countries risk becoming complicit in government
human rights violations. Further, the most difficult human rights
dilemmas companies face often involve a conflict between domestic
law and international human rights protections.
The UK government could help address this challenge
in a number of ways. Wherever possible, the government should
include human rights and specifically corporate human rights issues
in its public diplomacy and dialogue with other nations, aimed
at helping to close the gap between international human rights
standards and domestic law or its enforcement. This would also
support businesses in addressing some of the most difficult dilemmas
in this area. By supporting capacity building, training and education
projects, financially and operationally, to strengthen rule of
law and governance, the UK government could help address critical
root causes of human rights violations around the world.
Policy Integration and Alignment
As John Ruggie has stated, too often human rights
are compartmentalized in one government agency or department tasked
with advancing them. Yet, many business and human rights dilemmas
arise outside of the traditional public policy forums for human
rights. International trade policy, regulations on foreign direct
investment, development aid, export credit mechanisms, and corporate
law can all have significant implications for corporate human
rights impacts. The UK Government should consider assessing to
what extent its current corporate regulatory regime aligns with
its human rights policies and ensure that human rights are an
important consideration in revising all aspects of that regime
in the future.
Legal Clarity
It is critical for companies to understand the
regulatory environment within which they operate. This is especially
true for an issue as complex as the human rights responsibilities
of business. A clear legal standard would help level the competitive
playing field, rewarding those companies that are already proactively
managing their human rights impacts. In this light, the UK Government
should seek to clarify the applicability of the Human Rights Act
1998 to private actors, including corporations: Questions
remain both on the applicability of the Act to businesses and
around the definition for public functions or services provided
by private actors. Added clarity here would be a very valuable
contribution to this debate, even beyond the specific UK legal
context.
2. CORPORATE
RESPONSIBILITY TO
RESPECT HUMAN
RIGHTS
Human Rights Impacts of Businesses
The human rights impacts of businesses, including
UK companies, are manifold: Companies can impact human rights
positively and negatively, directly or indirectly, they can impact
communities in their home state, in host countries, as well as
communities in other far away regions of the world, through the
company's operations or use of its products or services.
Examples of positive impact include job and
wealth creation, furthering the human rights to work and an adequate
standard of living, facilitation of the right to free expression
through information and communications technology and services,
and advancement of the right to health through development and
provision of medicines.
Negative human rights impacts can include substandard
working conditions in a company's supply chain, complicity in
a government's human rights violations, such as abuses by police
or security forces to protect a company asset, or severe pollution
of air and water, potentially harming the human rights to health,
food, and access to clean water.
Research conducted by John Ruggie's mandate
and presented as a supplement to Ruggie's June 2008 report
to the UN Human Rights Council showed that allegations of human
rights violations had been made against companies in virtually
all business sectors, all regions of the world, and alleging violations
of a wide variety of human rights, including civil and political,
labor, and economic, social and cultural rights.
Therefore it is our strong belief that the baseline
business responsibility to respect all human rights should be
the same for all companies, regardless of the type, nature and
size of their business. Most importantly, this baseline responsibility
does not vary based on where a company operates.
Due Diligence
To discharge their responsibility to respect
human rights, proactive measures are required from companies.
These measures, which John Ruggie refers to as human rights "due
diligence", should include key elements of a business management
system, including a formal policy, impact assessments, integration
of human rights throughout the business, and measuring and reporting
on impact. In practice, while the baseline responsibility should
be the same for all companies, the implementation will and should
vary depending on the type, nature and size of the company.
Additional Responsibilities for Companies Performing
Public Functions
It is important to stress that the responsibility
to respect all human rights, to do no harm, is a baseline responsibility.
Companies can and should go further in advancing human rights
were possible. In addition, where companies or other private actors
perform public functions or provide public services, additional
responsibility should apply. States are charged with the primary
duty to protect and fulfill human rights—where the state
passes on the provision of essential services that further human
rights to non-state actors, including companies, the responsibility
associated with the human rights in question should extend to
those private actors. For example, private prison operators should
be held to account for violations of the human rights of prisoners
in the same way that state actors could be held accountable.
Additional Efforts
In addition to the points raised above, we see
a number of specific areas in which the UK government, and other
governments, can take action to improve human rights conditions
relevant to business:
— Procurement policies: The UK government
should ensure that all its procurement is conducted in a manner
consistent with human rights principles. In doing so, it will
mirror best practice, and also help to create and expand commercial
incentives for companies globally to integrate human rights protections
into their operations.
— Widening the circle of engaged companies:
The London-based Business & Human Rights Resource Centre reports
that only 241 companies, out of 4,000 monitored, have
adopted formal human rights policy statements. Too many multinational
companies remain unwilling to take the risk involved with stating
their commitment to respect basic human rights principles. But
in 2009, the concern that mentioning the Universal Declaration
of Human Rights in corporate policy will bring unnecessary risk
of legal liability simply hasn't been borne out by experience.
— The UK government could encourage a culture
for respect by requiring or promoting public reporting on human
rights impacts by companies. The Global Reporting Initiative,
the most commonly accepted standard for social and environmental
reporting, already includes a number of human rights indicators
that could serve as a reference point. In addition, the government
can publicly acknowledge and reward the many UK companies that
have led and continue to lead in this area, through an awards
program, a speaker series, or another public event.
— Deepening the practical understanding
of what human rights means for business: Even for companies employing
leading human rights efforts, understanding and implementation
can remain incomplete. There is a sufficient community of practice
and expertise in organizations like BSR and others such that operational
advice is available to any company that wishes to look for it.
To help deepen the understanding and advance implementation of
human rights among companies, the UK Government could provide
financial and operational support for training programs on human
rights for companies, both in the UK and abroad.
— Measuring progress: John Ruggie's work
is immensely helpful in that it is setting some parameters on
just what a company's duties are. Yet, today few companies are
in a position to measure their impacts, and the wider world generally
only sees violations, which are often quickly attributed to business.
A better means of measuring and reporting on impacts, both positive
and negative, will illuminate this poorly understood debate. The
UK government could support this effort by ensuring that it considers
impact and outcomes, including positive impact, when addressing
corporate responsibility for human rights in regulatory efforts,
as well as through multi-stakeholder initiatives.
— Examining horizon issues in today's world:
The world from which the Universal Declaration emerged in 1948 is
gone. Today's wired world presents a very different picture, with
fluid connections across borders, NGOs growing by the day, and
political influence dispersing from Europe and the United States.
Every company will spend the coming decades wrestling with its
approach to privacy, free expression, and access to economic rights—items
that are not well understood today. Supporting continued research
and study of this continuously evolving field is a key contribution
that the UK Government could make to further human rights protections
around the world.
3. EFFECTIVE
ACCESS TO
REMEDIES
Access to remedies for those whose rights have
been violated remains weak in many parts of the world. In fact,
where human rights violations are most likely to occur, access
to remedies often is least effective. Given the magnitude of this
challenge, we strongly believe that a debate between judicial
and non-judicial mechanisms is misguided. Rather, effective access
will require a number of different avenues, both judicial and
non-judicial, to be available to victims of human rights abuses
involving companies.
In addition to fulfilling its duty to protect
citizens from human rights abuses through law, effective enforcement,
and judicial remedies, the UK Government could provide significant
support to improving access to remedies around the world. As mentioned
above, the government can help build capacity in countries with
weak rule of law and ineffective judicial mechanisms. Providing
financial and operational support for training, educational exchange,
and continued research would all prove valuable.
Regarding non-judicial remedies, we believe
that the different options the Committee listed in its call for
evidence, including ombudsmen, complaint mechanisms, alternative
dispute resolution, and mediation, all have merit. All of these
instruments have already proven successful in various aspects
of corporate social responsibility, including ethics, anti-corruption
programs, and labor rights. They should not be seen as replacing
judicial mechanisms, but as important alternative avenues towards
redress for victims. Non-judicial mechanisms provided by business,
other private actors, or international organizations are especially
needed where rule of law and judicial avenues are weak.
The OECD National Contact Point system is a
non-judicial mechanism that could be improved to provide effective
access to remedies for victims more widely. The UK National Contact
Point has been significantly more active than other contact points
in investigating complaints of alleged human rights violations
involving companies. Exploring further the successes and challenges
of this process and sharing the results widely would be very valuable.
Based on such a study, the UK National Contact Point's process
could be optimized and other countries could be encouraged to
adopt a similar process.
In closing, I would like to again thank the
Committee for the opportunity to provide BSR's view on this important
debate. We will continue to work with our member companies on
developing effective solutions to the many human rights challenges
businesses face around the world and we look forward to the Committee's
and the UK government's continued efforts to advance human rights
globally.
Business for Social Responsibility
May 2009
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