Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents

Examination of Witnesses (Questions 52 - 59)



  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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