Recent UN efforts on business and human rights: How can international law be enforced on private corporations?

By: Liana Solot

On June 27, 2014, the United Nations (UN) Human Rights Council reaffirmed its 2011 endorsement of the UN Guiding Principles on Business and Human Rights. This resolution was adopted by consensus, following the June 26 resolution establishing an open-ended Inter-Governmental working group to negotiate a legally binding international instrument on transnational businesses with respect to human rights. This represents one of the many recent efforts towards promoting international corporate social responsibility standards.

The 2011 Guiding Principles established a global standard for addressing business activities’ adverse impacts on human rights. They promote a three-pillar framework: (1) the State duty to protect human rights; (2) the corporate responsibility to respect human rights; and (3) access to a remedy for victims of human rights abuses. Collectively, this framework is known as Protect, Respect, and Remedy (PRR). The Guiding Principles require companies to proactively take steps to prevent, mitigate and, where appropriate, remediate their adverse impact on human rights. However, finding ways to enforce these non-legally binding principles has been a difficult task.

The issue of how to make transnational corporations liable under international human rights law has become increasingly urgent for activists and scholars, but is still a huge legal challenge. Historically, international human rights law has been considered a way to protect individuals from states’ arbitrary use of power, not from private entities, while corporate law has traditionally been treated as a domestic matter. For many, the idea of shifting the responsibility to protect human rights from governments to businesses may seem odd at first, but today, individual corporations can have as much power and influence as entire countries, and should therefore be held liable for violations. Unfortunately, there is still a legal gap to be filled with the development of international legal obligations that can effectively be imposed on corporations, with the additional possibility of applying extraterritorial legislation.

In most cases, businesses make decisions to pursue profits without regard for potential human rights violations resulting from their activities. Labor and environmental rights are more prone to abuse by transnational corporations. According to the 2014 Walk Free Foundation index, almost 36 million people live in “modern-day slavery” conditions, mostly from human trafficking, forced and child labor, and hazardous work environments. Recent reports demonstrate the proliferation of “sweatshops” and horrifying work conditions in developing countries, mostly where giant international brands seek contractors for low-cost labor. Desperate pleas for help from Asian workers have been found hidden in products sold by giant brands like Primark and Kmart. Furthermore, Zara was involved in a slave labor scandal in Brazil, where it had illegal factories staffed with Bolivian and Peruvian immigrants working in slave-like conditions. Mechanisms must be created to require foreign retailers to ensure that factories involved in their garment supply chain are safe places to work.

The UN’s Guiding Principles alone will definitely not bring these and other human rights violations to an end, but they will serve as a foundation for developing better enforcement mechanisms and possibly binding standards of good practice. One of these positive developments could be the upcoming working group, created by the June 26 resolution, to negotiate an legally binding international instrument. This working group is expected to start its deliberations in mid-2015 and will hopefully focus on effective ways to implement the UN Guiding Principles.

The Sustainable Development Goals (SDGs) are also expected to be launched in 2015, representing another opportunity for businesses to take an active role in the humane development of society. During the Rio+20 United Nations Conference on Sustainable Development in Rio de Janeiro, Brazil in June 2012, UN Member States decided to develop a set of SDGs for the post-2015 development agenda. Goal No. 12.6, specifically, seeks to “encourage companies, especially large and trans-national companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle”. However, the definition of “sustainable practices” needs to be more clearly defined, using convincing good practice standards for companies to follow. This will depend on a global partnership with the active engagement of governments, civil society, and the private sector.

Despite these efforts, it may still take many years before companies actually take human rights standards and goals seriously and adopt them not only through theoretical corporate policies made available on their websites, but also by taking concrete actions to prevent violations or remedy eventual damages. Businesses will naturally resist binding international obligations placed upon them, so how will they be convinced that protecting human rights can also be a beneficial corporate policy? Why would some states that do not even accept all international human rights standards domestically, for example, agree to subject their companies to such standards under international law? The idea is that these standards should be enforced on all companies, even where national laws are poorly enforced, or not at all.

Since establishing the Guiding Principles, the UN has been trying to create ways to operationalize the principles and promote corporate responsibility internationally. The UN Secretary-General’s Special Representative for Business and Human Rights, John Ruggie, made an important advance in this direction by providing an interpretative guide to the principles and providing assistance for companies to construct human rights due diligence regimes. The fact that companies and governments have been discussing this issue is a huge achievement. However, the question of how to implement the Guiding Principles, establish due diligence rules, and create the requisite enforcement mechanisms remains controversial.

Changing businesses’ internal culture will be difficult. The first requirement will be to have businesses incorporate social responsibility standards in their internal corporate policies and structure. In turn, this will demonstrate how taking concrete actions and creating due diligence regimes to prevent human rights abuses can decrease risks and expenses (i.e. brand reputation, labor lawsuits, penalties for environmental damages, etc.). One possible step in this direction may be to promote sustainable development and responsible management in business schools and higher education institutions. The idea of aligning business management education with sustainable development best practices seems like an effective way of promoting awareness in the world’s future business leaders.

Because it is evident that the private sector will be critical to achieving the SDGs, the UN Global Compact has called on business schools to promote the Principles for Responsible Management Education (PRME). In October 2014, participants at the “Third Global Forum for Business as an Agent for World Benefit” workshop issued a call for action for management education and engagement to advance the SDGs. Today there are over 500 business schools from around the world that have adopted the PRME in their academic curricula and research institutions.

Another UN initiative in this context will be the upcoming annual UN Forum on Business and Human Rights, which will take place in Geneva, Switzerland, from December 1 through 3, 2014. It is open to states, business enterprises and associations, civil society organizations, trade unions, victims, academics, students, the media, and any other relevant stakeholder. This forum represents another attempt to promote the widespread dissemination of the “Protect, Respect and Remedy” framework and to discuss national action plans for implementation.

Although it may still take many years, these combined efforts, global principles, guidelines, and goals may soon transcend the theoretical discussions and workshops to become concrete corporate practices. Hopefully, with the efforts of the international community, the new generation of business leaders and executives are better prepared to address the prevention, or at least minimizing, of human rights violations resulting from corporate activities. Unfortunately, until this change in corporate culture occurs and effective enforcement mechanisms are created, the world can expect to see many more incidents of human rights violations as globalization promotes international expansion of harmful business practices.

Liana Solot is an L.L.M. Candidate at Berkeley Law. She is a student contributor for Travaux.

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