Former Managing Director, Advisory Services, BSR
Last week, the UN Human Rights Council endorsed the Guiding Principles on Business and Human Rights proposed by UN Special Representative John Ruggie. The principles provide guidance for implementing the UN "Protect, Respect, Remedy" Framework, which rests on three pillars:
- The state duty to protect against human rights abuses from third parties, including business, through policies, regulation, and adjudication
- The corporate responsibility to respect human rights, implementing due diligence to avoid infringement and address adverse impacts
- Access to effective remedy for victims of human rights abuses
The council’s vote marks more than the end of Ruggie’s successful mandate. It also signals the beginning of a new chapter in the struggle to address and eliminate human rights abuses involving business. Going forward, with a new UN working group building capacity for and driving implementation of the Guiding Principles, companies will implement the human rights due diligence called for in the Guiding Principles; governments will strengthen their policies and regulations in this area; and investors and NGOs will align their expectations and advocacy around the principles’ standard for corporate responsibility.
Today, most CSR executives (and corporate lawyers) are likely wondering, “What does this mean for my company?”
From Unproductive Dialogue to Global Consensus
Before addressing the implications for business, it is worth examining what it took to get us here. Ruggie achieved what seemed unthinkable in 2005 at the beginning of his mandate. Back then, facing intense business opposition and strong NGO support, the UN Human Rights Commission declined to act on the so-called Draft Norms, which would have assigned to business the same human rights duties as governments (albeit a subset of rights deemed business-relevant). In essence, the business and human rights dialogue was unproductive and lacked even a common definition of the problem.
Today, the debate is driven by clear definitions and a global consensus, despite many new and arguably more complex human rights and business challenges. The consensus among governments, businesses, civil society organizations, and investors, is particularly remarkable. Organizations as varied as the International Trade Union Confederation, the International Chamber of Commerce, NGOs like EarthRights International, companies like Coca-Cola and Total, the Chinese government representative at the UN Human Rights Council, and investors representing more than US$2.7 trillion in assets have all generally voiced their support for the Guiding Principles. Granted, some advocacy groups, including Human Rights Watch and Amnesty International, have voiced important criticism, suggesting that the principles’ standards for government and business are too low. But even these organizations likely will invoke the Guiding Principles in their efforts with business, while advocating at the UN level for more stringent standards.
‘Principled Pragmatism’ and Broad Stakeholder Engagement
Ruggie achieved this level of consensus in large part by relying on two important approaches: “principled pragmatism” and broad, inclusive stakeholder engagement. His mandate and the resulting standards did not compromise on fundamental human rights principles, and it was nonetheless pragmatic about what is achievable today. Crucially, the standards did not let perfect become the enemy of good. In this vein, Ruggie notes that while the Guiding Principles will not end business and human rights challenges by themselves, they will provide “a common global platform for action, on which cumulative progress can be built, step-by-step, without foreclosing any other promising longer-term developments.”
Ruggie’s emphasis on broad and inclusive stakeholder engagement was equally important in achieving the widespread support for the principles. He conducted 47 international consultations with governments, businesses, civil society representatives, and investors. Some engagements were open, others were behind closed doors, and all were supported by an online consultation that solicited input from a wider range of stakeholders.
Ruggie’s success underscores the importance of global and inclusive stakeholder engagement, which, combined with the team’s “principled pragmatism” will surely also guide the new UN working group’s efforts to implement the principles.
‘Know and Show’ Respect for Human Rights
So what does this mean for business? The principles are neither legally binding, nor do they establish new responsibilities for business. Rather, they clearly articulate society’s current, simple expectation: Companies have a responsibility to respect human rights. That means:
- Adopting a human rights policy commitment
- Ensuring non-infringement through human rights due diligence
- Addressing any adverse human rights impacts the company was involved in
- Measuring and reporting on performance.
In short, the principles call on companies to “know and show” that they respect human rights.
Even though the principles are simply a clearer articulation of existing societal expectations, the development of effective human rights management systems will feel new to many companies. There are about 80,000 multinational companies today, and, according to the Business and Human Rights Resource Center’s list, only 271 companies have human rights policies. That number is likely to rise significantly.
While the principles provide companies with more detailed guidance on human rights policies, due diligence, and operational-level grievance mechanisms, they are not intended to be an off-the-shelf tool. Ruggie’s mandate encompassed all business enterprises, and so, in theory, the Guiding Principles apply to a multinational company like GE as much as they do to the dry cleaner down the street. They are intentionally high level and allow for customization in some areas based on the company’s size, resources, and human rights risks.
In addition to guiding the way companies implement human rights management systems, the principles will also affect companies’ relations with government and civil society. While the principles are not legally binding, the UN endorsement of and broad consensus on the principles will likely lead to an alignment of public policy and stakeholder expectations for companies around the human rights management steps outlined in the principles.
Already, governments such as Australia, Canada, the EU, and the U.K. have applied the UN "Protect, Respect, Remedy" Framework in their public policy. We can expect governments to begin implementing the principles’ many recommendations directed at them, including, for example, encouraging or requiring corporate human rights disclosure.
In addition, investors and advocacy organizations will be more consistent in their demands for companies to demonstrate and ensure respect for human rights through the measures outlined in the principles. As mentioned above, a group of 29 investors, including asset managers such as F&C and the major pension funds, PGGM and USS, have endorsed the principles, and their human rights research and shareholder advocacy will no doubt be guided by them.
Ultimately, pressure on companies to act will increase and be more consistent, which will lead to more companies establishing the necessary management systems. Many companies have already or are about to begin this process. Johnson & Johnson recently adopted a human rights policy that aligns with the expectations articulated in the principles and the UN "Protect, Respect, Remedy" Framework. Goldcorp commissioned a human rights impact assessment referencing the framework. And Citi commits in its latest citizenship report to engage with stakeholders and peers to explore how banks can implement the framework and principles. With the UN’s endorsement of the principles, more companies will follow suit.
You Might Also Like
Sorry, no related articles have been published, yet.