Preface

Preface
1. Business is the major source of investment and job creation, and markets can be highly efficient means for allocating scarce resources, capable of generating economic growth, reducing poverty, and increasing demand for the rule of law, thereby contributing to the realization of a broad spectrum of human rights. But recent decades also have witnessed growing institutional misalignments, from local levels to the global, between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences. Indeed, the modern corporation itself has evolved at an accelerated pace, and embodies complex forms that challenge conventional understanding and policy designs. As a result of these epochal changes, once stable expectations about the respective roles of government and business in minding and mending the broader social fabric are now less predictable, have frayed or unraveled altogether. No country or region is immune.

2. The business and human rights domain is a microcosm of this transformation. Institutional misalignments create the permissive environment within which blameworthy acts by business enterprises may occur, inadvertently or intentionally, without adequate sanctioning or reparation. The worst corporate-related human rights abuses, including acts that amount to international crimes, take place in areas affected by conflict, or where governments otherwise lack the capacity or will to govern in the public interest. But companies can impact adversely just about all internationally recognized human rights, and in virtually all types of operational contexts. Recognizing these escalating risks, in 2005 the then United Nations Commission on Human Rights requested the Secretary-General to appoint a Special Representative on the issue of human rights and transnational corporations and other business enterprises, to map the challenges and recommend effective means to address them.

3. The idea of human rights is as simple as it is powerful: treating people with dignity. But the Special Representative soon found that there is no single silver bullet solution to the multi-faceted challenges of business and human rights. A successful strategy must identify the ways whereby all relevant actors can and must learn to do many things differently. This requires operational and cultural changes in and among governments as well as business enterprises—to create more effective combinations of existing competencies as well as devising new ones. The aim must be to shift from institutional misalignments onto a socially sustainable path.

4. The international community is still in the early stages of this journey. In addition to it being a relatively new policy domain, business and human rights differs significantly from the traditional human rights agenda. It is not comparable to States recognizing a particular right, as the General Assembly has now done in the case of access to safe water and sanitation, for example, because business and human rights involves all rights that enterprises can affect. It is not comparable to States recognizing the rights of a particular group, as in the Declaration on the Rights of Indigenous Peoples, because business and human rights includes all rights holders. Moreover, the tools available for dealing with business and human rights differ from those addressing State-based human rights violations, where only public international law can impose binding obligations.

5. The business and human rights domain is considerably more complex. Some of the most serious corporate-related human rights abuses have involved companies in acts committed by official entities, rendering established means for victims to seek redress problematic. Even where that is not a problem, States are under competing pressures when it comes to business, not only because of corporate influence but also because so many other legitimate policy demands come into play, including the need for investment, jobs, as well as access to markets, technology and skills. In addition, in the area of business and human rights States are simultaneously subject to several other bodies of international law, such as investment law and trade law. Of course, none of these factors absolves States of their human rights obligations. But absent any internationally-recognized hierarchy of treaty obligations, States are unlikely to place every single human right they have recognized above their legal obligations in those other areas. At the same time, business conduct is shaped directly by laws, policies and sources of influence other than human rights law: for example, corporate law, securities regulation, forms of public support such as export credit and investment insurance, pressure from investors, and broader social action. Success in dealing with business and human rights requires that these multiple constraints and opportunities are factored into the equation.

6. But the journey has begun. Most States long ago adopted individual measures relevant to business and human rights, including labor standards, health and safety provisions, and non-discrimination policies. However, States have been slow to address the more systemic challenge of fostering human rights-respecting corporate cultures and conduct. State practices exhibit substantial legal and policy incoherence and gaps. The most common gap is the failure to enforce existing laws, although for vulnerable and marginalized groups, there may be inadequate legal protection in the first place. The most prevalent cause of legal and policy incoherence is that the units of Governments that directly shape business practices—in such areas as corporate law and securities regulation, investment promotion and protection, and commercial policy—typically operate in isolation from, are uninformed by, and at times undermine the effectiveness of their Government’s own human rights obligations and agencies.

7. At present, States are not generally required under international human rights law to regulate the extraterritorial activities of businesses domiciled in their territory and/or jurisdiction. But nor are they prohibited from doing so provided there is a recognized jurisdictional basis and that the exercise of jurisdiction is reasonable. Nevertheless, within this permissible space, States have chosen to act only in exceptional cases, and unevenly. This is in contrast to the approaches adopted in other areas related to business, such as anti-corruption, money-laundering, some environmental regimes, and child sex tourism, many of which are today the subject of multilateral agreements.

8. There are sound policy rationales for States seeking to ensure that enterprises which are domiciled in their territory and/or jurisdiction respect human rights abroad, especially if the State itself is involved in the business venture, for example, as the owner of the enterprise in question or because it has promoted the particular investment. This enables a “home” State to avoid being associated with possible overseas corporate abuse. It can also provide much-needed support to “host” States that may lack the capacity to implement fully effective regulatory regimes on their own.

9. The business community, too, has devised responses to business and human rights challenges. The number of corporate initiatives has increased in recent years, and their geographical base is expanding. Business associations, multi-stakeholder undertakings and responsible investment funds now address human rights concerns. Business consultancies and corporate law firms are establishing practices to advise clients on the requirements not only of their legal, but also their social, license to operate, which may be as significant to an enterprise’s success. However, these developments have not acquired sufficient scale to reach a tipping point of truly shifting markets. Moreover, the standards that business initiatives incorporate are typically self-defined rather than tracking internationally recognized human rights. And accountability mechanisms for ensuring adherence to the standards tend to remain weak and decoupled from firms’ own core oversight and control systems.

10. One major reason that past public and private approaches have fallen short of the mark has been the lack of an authoritative focal point around which the expectations and actions of relevant stakeholders could converge. Therefore, when the Special Representative was asked to submit recommendations to the Human Rights Council in 2008 he made only one: that the Council endorse the ‘Protect, Respect and Remedy’ Framework he had proposed, following three years of extensive research and inclusive consultations on every continent.

11. The Framework rests on three pillars: the State duty to protect against human rights abuses by third parties, including business, through appropriate policies, regulation, and adjudication; the corporate responsibility to respect human rights, which means to act with due diligence to avoid infringing on the rights of others and to address adverse impacts that occur; and greater access for victims to effective remedy, judicial and non-judicial. Each pillar is an essential component in supporting what is intended to be a dynamic system of preventative and remedial measures: the State duty to protect because it lies at the very core of the international human rights regime; an independent corporate responsibility to respect because it is the basic expectation society has of business in relation to human rights; and access to remedy because even the most concerted efforts cannot prevent all abuse.

12. In resolution 8/7 (June 2008), the Council was unanimous in welcoming this policy Framework, and in extending the Special Representative’s mandate to 2011 in order for him to “operationalize” and “promote” it. While in itself this endorsement did not resolve all business and human rights challenges, it has enabled the Framework to become a common foundation on which thinking and action by stakeholders can build over time. Thus, the Framework has already influenced policy development by Governments and international institutions, business policies and practices, as well as the analytical and advocacy work of trade unions and civil society organizations. The Guiding Principles that follow constitute the next step, providing the “concrete and practical recommendations” for the Framework’s implementation requested by the Council. Like the Framework, the Guiding Principles draw on extensive research and pilot projects carried out in several industry sectors and countries, as well as several rounds of consultations with States, businesses, investors, affected groups and other civil society stakeholders. All told, the mandate will have conducted 47 international consultations from beginning to end.

13. The Guiding Principles’ normative contribution lies not in the creation of new international law obligations but in elaborating the implications of existing standards and practices for States and businesses; integrating them within a single, coherent and comprehensive template; and identifying where the current regime falls short and how it should be improved. Each Principle is accompanied by Commentary, further clarifying its meaning and implications.

14. At the same time, the Guiding Principles are not a tool kit, simply to be taken off the shelf and plugged in. While the principles themselves are universally applicable, the means by which they are realized will reflect the fact that we live in a world of 192 United Nations Member States, 80,000 transnational enterprises, ten times as many subsidiaries and countless millions of national firms, most of which are small and medium-sized enterprises. When it comes to means for implementation, therefore, one size does not fit all.

15. The Special Representative is truly honored to submit these Guiding Principles to the Human Rights Council. In doing so, he wishes to acknowledge the extraordinary contributions of literally hundreds of individuals, groups, and institutions around the world, representing different segments of society and sectors of industry, who gave freely of their time, openly shared their experiences, debated options vigorously, and came to constitute a global movement of sorts in support of a successful mandate—helping to secure the development of universally applicable and yet practical Guiding Principles in order to achieve the more effective prevention of and remedy for corporate-related human rights harm.

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Discussion
posted by: najtaylordotcom on Monday November 22, 2010Ratings Relevance: 3 0 Agreement: 3 0
Powerful and comprehensive introduction. However, I think two elements might be considered.

First, the role of investment capital, as opposed to merely business activity. The difference between the rights and obligations of both businesses and investors (or even investment services firms such as asset consultants, stockbrokers and investment managers) is important to recognize. For instance, an institutional investor such as a pension (superannuation) fund marshals around $10 billion in capital, diversified across a variety of asset classes such as shares in public and privately-held companies, property, infrastructure, cash, government and corporate bonds etc. However the institutionalized nature of the investment industry is such that a number of other providers advise and invest that money on behalf of the pension fund. Thus the transactions are performed by actors who don’t actually own or control either the asset (e.g. a corporation) or the capital (e.g. the pension fund). The same applies for what are known as sovereign wealth funds such as the Australian Future Fund or some of the Middle Eastern investment corporations.

This compounds the problems you refer to in the preamble because it means that control and ownership decisions are occurring by many more actors than is often acknowledged, and thus the difficulties in addressing the area of business and human rights is further complicated.

Second, the role of both corporate responsibility and risk frameworks in addition to top-down rules and principles. CSR and responsible investment programs, and increasingly risk frameworks, are having a significant impact on the behavior of corporations in conflict-affected and high risk areas for instance. This is relevant in so far as this is largely an industry-led move to improve corporate responsibility and/or risk management practices in relation to human rights and the promotion of peace indicates some acceptance of the special representatives work by a segment of the business community – i.e. not all firms are opposed to clarification and/or improvement of rules and principles relating to their activities and human rights.

At present we that consult and think about business and human rights approach the conversation as if we face opposition such was felt by the norms on transnational corporations earlier in 2005, not as if we have some explicit and some implicit support from the business and investment communities in complementary areas such as risk management and corporate responsibility.

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posted by: kellesa on Tuesday November 23, 2010Ratings Relevance: 3 0 Agreement: 3 0
I agree with the previous commentator. This was precisely my point too: to make a difference between real economy businesses serving economic rationals and those that are just serving shareholder interests running from one quarter to the next with the only objective of “producing” higher stockmarket values.

Asthe previous commentator also pointed out, the complex structure of such firms needs to be taken into consideration. In fact, we cannot get out from the significance of the business/ecoonomic model being in use. The present neo-liberal financial economy is not in agreement with human rights principles.

My second point is that we must have binding human rights regulations. Soft laws do not work any more in a situation where trade comes with ironclad sanctions and is written in stone in various bilateral and regional trade agreements.

Third, we need to think of incentives that are given to the industries and firms that abide by human rights. Human rights must make business sense and we need innovative thinking on how to do that.

Finally, harmonisation agenda is not sufficient if other dimensions i.e. environment/climate and social rights are subsumed under economic rationale. We need synergy between equally strong and “independent” dimensions. This synergy too requires innovative thinking but building on sustainable lifestyles with sustainable business already being practiced many parts of the world.

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posted by: Almeida Ashley on Tuesday November 23, 2010Ratings Relevance: 0 0 Agreement: 0 0
I agree with both above commentaries.

Especially the paragraph “harmonisation agenda is not sufficient if other dimensions i.e. environment/climate and social rights are subsumed under economic rationale. We need synergy between equally strong and “independent” dimensions. This synergy too requires innovative thinking but building on sustainable lifestyles with sustainable business already being practiced many parts of the world.” I would like to mention the new global consensus of the ISO 26000, after 5 year work in a multistakeholder dialogue of more than 90 countries. ISO 26000 includes and toes beyond human rights, once it is multidimensional when it comes to approach organizational social responsibility (not only business social responsibility).

Another comment which I understand is relevant and I agree is “we must have binding human rights regulations. Soft laws do not work any more in a situation where trade comes with ironclad sanctions and is written in stone in various bilateral and regional trade agreements”

A third comment from above I think is overriding the others and concerns the capital structure and the principal/agent conflit in US/UK stock market rationale, where we find a diffuse ownership: “[…]the role of investment capital, as opposed to merely business activity. The difference between the rights and obligations of both businesses and investors (or even investment services firms such as asset consultants, stockbrokers and investment managers) is important to recognize. […] control and ownership decisions are occurring by many more actors than is often acknowledged, and thus the difficulties in addressing the area of business and human rights is further complicated.” Thus, the conceptual category of “business” is indeed a network of interelated investment and market decisions by many actors, under an institutional layer with no international law for global finance and investment.

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posted by: jrunda on Monday December 13, 2010Ratings Relevance: 1 0 Agreement: 0 3
I do like the preface, and would like to see a motivitation for companies to respect, based not only on societal expectations, but also on ethics. What I mean is that companies should respect, even if there were no societal expectations on that subject. Perhaps adding “and because it is an ethical imperative” would be enough, at the end of the current “an independent corporate responsibility to respect because it is the basic expectation society has of business in relation to human rights” at number paragraph #11.

Regards

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posted by: dvannucc on Friday December 17, 2010Ratings Relevance: 2 0 Agreement: 1 0
Dear all,

Please find attached Amnesty International public statement on the draft Guiding Principles. You can access the statement via this link: http://www.amnesty.org/en/library/info/IOR50/002/2010/en

thanks,

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posted by: laurirose on Friday December 17, 2010Ratings Relevance: 0 2 Agreement: 0 0
Thank you for posting this. The timing was excellent, as I was just searching online to see if Amnesty had commented publicly yet on the Draft GP’s, and fortunately found your link here.

I was looking for it to see if there was a supplement to your October 2010 Comments which AI published about the Proposed Outline of the SRSG’s Draft GPs ( http://www.amnesty.org/en/library/info/IOR50/001/2010/en )

… By the way, I noticed a mistake in Footnote #2 on Page 4 of this document you released today. It says “2020” when it should read “2010”… The same mistake was made in FN #17 on Page 11 of your AI Oct. 2010 Comments document I’ve given the link to above…

I am referencing both AI docs noted above in a paper I’m currently writing on the Update of the OECD Guidelines for Multinational Enterprises and the inclusion of a new Human Rights chapter in these Revised OECD Guidelines.

My proposal is that a Commentary subsection be added in the new OECD Guidelines’ Human Rights chapter promoting the protection of human rights defenders & environmental advocates.

It is a segue from the AI comments on human rights defenders (and Indigenous peoples) in your Oct. 2010 Comments to Prof. Ruggie, and also draws upon the two documents of Comments/Proposals AI submitted to the OECD in October (among many other resources, of course…)

I am working with OECD Watch and other stakeholders on the development of this proposed Commentary subsection, and welcome any input from others reading this note.

Best wishes, Lauri

PS. Before the deadline in January I intend to post my own personal comments on several sections of Prof. Ruggie’s Draft GPs, particularly focusing on this issue of human rights / environmental defenders protection, and its relevance to a number of sections of the Final version of the Guiding Principles (including those pertaining HRs Due Diligence, Supply Chains, and Non-Judicial Grievance Mechanisms.)

LRT

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posted by: conor on Monday December 27, 2010Ratings Relevance: 0 2 Agreement: 0 0
I am writing a book on the web, The Rights’ Future. You can access it at http://www.therightsfuture.com It involves weekly essays on which all those interested can comment.

This week’s essay is on corporate responsibility in the field of human rights: Supping with Mammon. In the essay I am very supportive of what Prof Ruggie is trying to do. I am sending you all the link now because you might be interested not only (or even mainly) in my text but in the responses it produces. You might also want to comment yourself!

CONOR GEARTY (LSE)

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