Examination of Witnesses (Questions 52
- 59)
TUESDAY 9 JUNE 2009
MR PETER
FRANKENTAL, MS
JENNIFER ZERK,
MS EMILY
ARMISTEAD AND
MR RICHARD
MEERAN
Q52 Chairman: Good afternoon, and
welcome to this second evidence session of the Joint Committee
on Human Right's inquiry into business and human rights. You are
our first witness panel and we are joined by Peter Frankental
from Amnesty International, Jennifer Zerk, a consultant on behalf
of the Corporate Responsibility Coalition, Emily Armistead from
Action Aid and Richard Meeran from Leigh Day Solicitors, so welcome
to you all. Does anybody want to make any opening remarks? No,
so we shall go straight on to questions. Perhaps I can start with
you, Peter. We have heard various arguments about whether the
response to the human rights impacts of business must be agreed
internationally in order to be effective. What do you think of
that argument?
Mr Frankental: It is very difficult
to see how governments can embed human rights into national regulatory
frameworks without there being the embedding of human rights impacts
of business into international frameworks, so, from our point
of view, the two are complementary, and neither unilateral nor
multilateral measures on their own would address the governance
gaps that the UN's Special Representative referred to in holding
companies accountable. We would also see that, if multilateral
measures are to be put in place, then this requires leadership
on the part of individual states; it does require individual states
to take a significant initiative within multilateral bodies that
they are members of. Similarly, if there is a multilateral framework,
that framework would have little effect unless states are willing
to give effect to it, so we would see the two as linked. In particular,
we do support the idea of some kind of international instrument
for corporate accountability within the UN system, but we agree
with Professor Ruggie that such an instrument would not exist
to monitor the activities of tens of thousands of transnational
corporations, that would be unfeasible, but it would exist to
reinforce the will of states to hold companies to account within
their jurisdiction. In other words, it would be an instrument
like other human rights instruments; it would be the willingness
and ability of states to hold companies to account that the multilateral
instrument would give effect to. The purpose would be to create
a level playing field so that states which do not have regulatory
systems in place would not find themselves at a competitive advantage
and, therefore, this multilateral instrument would encourage individual
states to take unilateral action if you did have a baseline of
minimum standards.
Q53 Chairman: Professor Ruggie seemed
to be suggesting, when he gave evidence to us last week, that
there was little prospect in the foreseeable future of getting
international agreement anyway.
Mr Frankental: Yes, I think that,
if one is referring to an overarching treaty within the UN system
on corporate accountability, then Professor Ruggie is right, such
a treaty is unlikely to happen within the next decade, but that
is not a reason not to promote it now. The whole of the human
rights system is full of treaties which, at a particular point
in time, were considered unfeasible and, within a period of ten
or 15 years, were enacted, but an international framework does
not just relate to an overarching treaty within the UN system,
there are also multilateral instruments within the World Bank,
and the World Bank's performance standards for companies that
it lends money to, these are being reviewed next year. There is
also the OECD which houses guidelines for multinational enterprises,
and the OECD also develops common standards to harmonise standards
for export credit agencies. Then you have the European Union where
there is the possibility of embedding human rights into tendering
processes and procurement policies, so there are many different
international instruments and different institutional processes
that could go further to addressing the impacts of business on
human rights, and an overarching treaty within the UN system is
just one particular instrument.
Q54 Chairman: Perhaps I could ask
Emily an associated or linked question, that the CBI have given
us evidence and they support the idea of good practice guidance,
but they are concerned about that being linked to some form of
legal penalty. They also argue again that Professor Ruggie should
be looking at a binding global instrument on business and human
rights. What do you think the outcome of Professor Ruggie's work
should be?
Ms Armistead: Well, I would like
to start by saying that Action Aid is incredibly supportive of
Professor Ruggie's mandate and especially of the three pillars
that he has come up with, the duty to protect, the responsibility
to respect and access to remedy. As Peter has talked about, I
think that where we do disagree with Professor Ruggie is around
an international framework and we really think that the governments
should have an ambition to have an international framework on
business and human rights implemented, even if that is not possible
in the very short term. However, we also very much agree with
Professor Ruggie that at the moment national governments are not
doing enough in this area and that governments can act unilaterally
in order to ensure their duty to protect and in order to ensure
that their businesses are taking their responsibility to respect
human rights. Now, one area where we really think that there are
gaps at the moment is particularly in terms of access to remedy,
and in our submission Action Aid have talked a little bit about
one case in particular, that of Vedanta in India where we have
been working with local communities who have come up against a
UK-listed company that has just received permission to mine in
an area that is considered sacred land by the people there and
where both the mine and an existing smelter plant for aluminium
will have a severe impact on their human rights in terms of their
rights to livelihood as well as some of their religious and cultural
rights. Now, for those communities, they have found it very difficult
to find any access to redress at the moment in that, within India,
national human rights institutions are very powerless and through
the courts there are problems in terms of barriers because of
discrimination and societal barriers. Then, more importantly for
us and what we are discussing here, those communities are finding
it hard to find remedy through the UK system, as this is a UK-listed
company that is impacting on them. For example, going through
the national contact point, as we know, would not achieve any
remedy if they do not have any powers to remedy, and again this
is not a case that is suitable to go through UK courts. Therefore,
I think what we are looking for, bearing this sort of case in
mind, in terms of Ruggie's process is that he absolutely makes
the strongest possible recommendations in terms of what national
governments can do to remedy these sorts of problems. We are particularly
interested in what he has to say about the strengthening or the
establishment of national human rights institutions that have
the power over corporations and over businesses in order to remedy
this sort of problem and, as you know, Action Aid and our colleagues
at CORE are advocating that the UK Government establish a commission
specifically on business, human rights and the environment.
Q55 Chairman: But, overall, it looks
as though the prospects for an international instrument are pretty
remote, particularly bearing in mind the failure of the UN draft
norms on business and human rights.
Ms Armistead: Well, I think I
would agree with Peter, that we have to look at this over the
long term, and I think we are all aware that business is often
very resistant to regulation. I think that some of the regulation
that we have which governs standards in the UK, for example, health
and safety and employment laws, business initially is very resistant
to that. Now, I think we have come a long way on this debate and
I think business has come a long way on this debate in the last
20 years and the fact that the CBI is very supportive of Ruggie's
work and of the three-pillar framework, I think, shows the fact
that business is willing to shift on this, and I think what we
have to do is to illuminate them to the fact that there are possible
business advantages in getting a level playing field through an
international framework which will help them implement their responsibility
to respect human rights.
Q56 Baroness Prashar: My question
is for you, Emily, as well. You have said that the Government's
strategy is weak because it references voluntary arrangements
and corporate social responsibility, so do you disagree with Professor
Ruggie when he says that it is too simple to categorise some schemes
as voluntary?
Ms Armistead: I think we would
agree with Professor Ruggie in saying that really we have got
to move away from this voluntary versus regulatory debate. I do
not think it is helpful and I think it is preventing civil society,
NGOs, business and Government from progressing in this area. As
I have just said, I think there are areas where nobody would disagree
that it is necessary to have regulation, such as in health and
safety and employment laws, and we enjoy those rights here in
the UK. I think where we are falling down is ensuring that, where
UK business affects people abroad, they are enjoying the same
rights as we do here. I think, yes, we are critical of the Government,
that, at the moment in terms of UK business and its impact abroad,
the UK Government is relying far too heavily on purely voluntary
initiatives. In our submission, we used the Ethical Trading Initiative
as an example where there are certain companies that have either
chosen not to join or have dropped out, such as Morrison's, the
supermarket. I think that highlights where purely voluntary initiatives
really fail because they allow laggard companies to opt out, and
I think the point of human rights is that they are universal,
inalienable and you cannot have companies saying that they are
only going to respect them some of the time, but not when it does
not suit them.
Q57 Baroness Prashar: Would you agree
though that we do need a combination of approaches to move the
debate forward?
Ms Armistead: Yes, absolutely.
Obviously there are baselines that need to be achieved and there
needs to be a floor in order that laggard companies do not escape
respecting basic human rights and in order that the leaders of
the pack may strive forward and go even further than the basic
demands of them.
Q58 Baroness Prashar: My next question
is both for you and Peter really and it is about the regulatory
framework. You have both argued for a stronger regulatory framework,
but you do not really say what it should be like and what it should
look like. Can you tell me what changes you would like to see
and any examples you may have from other countries?
Mr Frankental: Yes, certainly.
I think that a good strong framework would have a range of policy
instruments and that these policy instruments would range from
a hard law that is embedded in the criminal and civil liability
systems to soft law reflected in essentially self-regulatory mechanisms.
The important thing is that the combination of hard law and soft
law should be mutually reinforcing, that there would be a national
and an international dimension to these instruments, that they
would address not just impacts in the UK, but, under certain particular
defined circumstances, extraterritorial impacts. The regulatory
framework would have to offer incentives to companies to operate
to acceptable standards and also disincentives to companies that
abuse human rights, and one of the outcomes that we would like
to see from such a framework is that companies view human rights
as a risk and liability issue so that they integrate human rights
into their management systems, whereas corporate social responsibility
tends to be peripheral. Another outcome that we would like to
see is a requirement that companies undertake human rights impact
assessments and we would like to see the UK ensure that its investment
support agencies, particularly the UK Export Credit Guarantee
Department, require companies to screen the human rights impacts
of their projects and transactions. Likewise, we would like to
see human rights embodied in UK Stock Exchange listing requirements,
which is not the case at the moment. There are a number of positive
developments within other jurisdictions that do point the way
forward. For example, the US's civil liability system includes
the Alien Tort Claims Act. Australia, Canada, Denmark, Sweden,
Norway, Germany and France all appear to have stronger non-financial
reporting and listing requirements than does the UK. The Dutch
Government has adopted a national action plan for sustainable
public procurement which provides that, from 2010, environmental
and social criteria will apply to all public procurements, something
which is not the case in the UK. The Norwegian Government has
recently adopted a White Paper on corporate social responsibility
which frames the responsibilities and dilemmas of companies, and
it gives special attention to the challenges of operating in conflict
zones and to business impacts on indigenous peoples. A draft law
was introduced in the last session of the US Congress, though
not yet adopted, called the `Global Online Freedom Act', which
mandates that US Internet companies take certain actions to combat
censorship and protect personal information or, otherwise, be
subject to criminal prosecution or civil law suits brought by
private litigants, and that was the result of the furore following
the impacts of Internet companies on repression in China. In Canada,
there is an Act currently receiving its second reading in Parliament,
called the `Corporate Accountability of Mining, Oil and Gas Corporations
in Developing Countries Act', and the purpose of the Act is to
ensure that corporations engaged in mining, oil or gas activities
and receiving support from the Government of Canada act in a manner
consistent with environmental best practices and with Canada's
commitments to international human rights standards. I feel that
there are a number of significant developments and I think the
UK would be well-guided to look very closely at these as an example.
Q59 Baroness Prashar: If I can ask
a supplementary to that, I know that some of these are in gestation
and others have been in operation, so how effective have they
been in practice? Has anybody evaluated the impact of these initiatives?
Mr Frankental: That is very difficult
to say because I am not aware of any evaluation of other countries'
initiatives, and I think that is one of the reasons why we would
like to see a UK commission on business, human rights and the
environment at arm's length from the Government which can actually
evaluate the effectiveness of the range of government policy instruments
and initiatives, including self-regulatory initiatives, because,
in that way, all stakeholders, including business, can be reassured
that the initiatives that the UK Government puts considerable
resources into are actually having effect.
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