A duty of business: to protect human rights

Harvard professor John Ruggie has been toiling on behalf of the UN since 2005 to devise a human rights framework for ways in which businesses should manage their interactions with the lives they affect. Are every participant’s interests taken into account?

human rights

It’s a year since the UN adopted its landmark Framework on Business & Human Rights. Reaching that point was a major achievement, given previous fractured and unsuccessful attempts to gain support for what was a business bill of human rights, culminating in the Draft Norms’ resounding rejection in 2004.

That failure prompted the UN to mandate a special representative, Harvard professor John Ruggie, in 2005 to review the human rights landscape.

But though Ruggie has been a leading light in this field, his Guiding Principles are just one contribution in what is becoming an increasingly crowded area of work. Any company with an international supply chain will do well to avoid the consequences of ignoring human rights impacts given the ever more demanding regulatory environment.

Back in 2005, and after extensively canvassing governments, NGOs, businesses and civil society groups across five continents, Ruggie concluded that what was needed was a focal point “around which actors’ expectations could converge” – or, in other words, ensuring the various players’ roles and responsibilities were reflected in any framework.

 

Impetus for change

From this, Ruggie presented his draft principles to the UN Human Rights Council in 2008 and received strong support, with his document being widely seen as a means of injecting focus and much-needed impetus for change.

Indeed, Ruggie’s mandate was extended to 2011 so he could promote and ‘operationalise’ the new framework, and Ruggie and his team entered a period of consultation which, by January 2011, had involved 47 businesses and stakeholders in more than 20 countries.

In June 2011, the revised framework was unanimously endorsed by the UN Human Rights Council and warmly welcomed across the sectoral divide, as well as across continents, with adoption by numerous governments and NGOs.

The Ruggie framework specifically relates to the manner in which a business manages its human rights footprint, with particular reference to supply chain ethics, and has in part been shaped by working through a series of mining industry scenarios. Business activities in the civil war-torn Democratic Republic of Congo (DRC) were a major source of inspiration for this.

 

Three main principles

The result is a framework with three main principles: first, that it is the state’s duty to protect against human rights abuses through policy, legislation and regulation; second, that it is a company’s basic responsibility to respect human rights, act with due diligence to avoid infringements and address abuses within their operations and supply chains; and, third, that victims have access to effective judicial and non-judicial remedy.

Hence the framework’s alternative title, Protect, Respect & Remedy.

However, his guiding principles are not the only show in town, particularly with the parallel pressures to increase supply chain transparency. To start with, the 2010 California Transparency in Supply Chains Act came into force at the start of this year. It requires all companies with turnover of $100m worldwide that sell goods to that state to disclose what efforts, if any, they have made to eradicate forced labour and human trafficking from their supply chains.

The act is intended to enable consumers to vote with their feet against companies which have failed to take slavery and trafficking seriously. Meanwhile, disclosure of ‘conflict minerals’ from the DRC was also a requirement of the 2010 Dodd-Frank Wall Street Reform & Consumer Protection Act, and though the US Securities & Exchange Commission has so far failed to publish detailed rules that companies can follow, there is likely to be movement on this with the Senate pressing for progress.

 

Supply chains

And next month, a provision included in the US National Defense Authorization Act will require government contractors to systematically identify and report on any counterfeit or suspected counterfeit components in their supply chains. As these duties build up, so the culture will have to change.

Writing for supply chain news site EBN online, Tam Harbert said: “Even when these companies find counterfeits, they don’t readily share that information. Not only don’t they share the information with the government and industry, they don’t even share the information with other divisions within their own company.”

No business can ignore the momentum towards greater disclosure and increasing demands on standards of business conduct. It is now much more common for companies to publicise human rights mission statements, as they are required to do under Ruggie’s framework. But these represent the tip of the iceberg, and many of the companies that do develop and issue statements take the 1948 Universal Declaration of Human Rights as their starting point rather than Ruggie.

George Padelopoulos, senior sustainability and ethical trade manager at UK DIY B&Q brand, believes that a lack of clarity and any sense of a timeframe for implementing the framework are significant factors hindering progress. Given that Ruggie’s principles are just that, principles, how should they be applied and ‘operationalised’ across the full range of business environments? – ie. outside of the extractives industries from where many of the themes originate – and when?

 

Extractive industries

He said: “From our point of view, there is no desire to avoid doing these things, but the challenge is trying to unpick how we would apply the principles. How are we expected to ‘operationalise’ the framework? Many of the examples used to illustrate the principles are taken from the extractives industries

“Non-extractive industries are far less likely – but not completely unlikely – to be involved in forced possession of land, relocation of villages and the like, areas to which the framework naturally lends itself. But I’m not clear what this means at an operational level for the day-to-day running of a retail business like B&Q.

“We have a code of conduct, we run a programme of ethical auditing and we aim to remedy negative impacts and so on. But this is aimed at the supply chain side. On a ‘community level’, we work and engage with communities local to a store or any of our operational buildings, but is that enough? What does ‘adequate’, ‘good’ and ‘brilliant’ look like?”

Another view expressed by a CSR manager, who asked not to be named, is this lack of clarity could land a responsible business into a damaging public spat over its human rights performance.

 

Polemic

He said: “There are people who might say we are not making progress quickly enough, and so may result in a natural reluctance to communicate on these issues publicly. There is a concern, for instance, that there are some quite polemic NGOs which, if we approached them with a view to collaborating with them on these issues, may decide to hit us first.

“That’s why these questions are important: because what would be an acceptable timeline? Ten years? Fifty years? And what about the quality of the audit process, which is often a box-ticking exercise.

“Looking into the reality of this, the vast majority of companies aren’t even at the audit stage – they are not in the collaborative, engaged model.

“There are no easy answers to these questions because there are no arbiters or clear and unambiguous standards. A business could easily decide to internalise the discussion. Without leadership, there can be no followship.”

 

Divestment

One company recently affected by these issues is Caterpillar, which was in March delisted from three responsible investment indexes by Wall Street investment firm MSCI because the company no longer met its ESG rating threshold following labour disputes in Canada.

Caterpillar had already been a long-term target of protesters due to the Israeli Defence Force’s use of its armour-plated bulldozers to raze Palestinian homes in the occupied territories. As a consequence of the delisting, the mutual pension fund giant TIAA-CREF immediately divested itself of $72m in Caterpillar stock from its Social Choice fund.

Of course, abuses and questions of corporate responsibility are nothing new. But human rights and supply chain management remain intertwined issues in many industries and it would be easy to think that progress is slow or nonexistent.

Judith Irwin, senior research at the Institute of Business Ethics, which has just published a briefing on business and human rights, believes that it is societal values that will really drive change.

 

Timeframes

She said: “The point about timeframe is a sticky one, but I don’t think we should get hung up on it. Every company in every country will have different issues to deal with in the realm of human rights.  Each will be at a different stage on this journey – it’s unrealistic to say that everyone should be on the same page in five years time.

“We’re looking at a process of evolution. The guiding principles have helped draw attention to the issue and have provided some focus and a framework for discussion in much the same way that the UN Global Compact has.

“The companies acting on this now may be the usual suspects, but they have money, clout and influence. And it’s not any timescale that will encourage companies to take these issues seriously but societal norms. Society has higher expectations today – we now expect companies to protect and support human rights and these expectations will get higher – not lower – as countries develop.

“Ruggie’s principles can help companies to navigate and understand their role in the evolving human rights agenda.”

• Originally published in Ethical Performance in August 2012

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peterbatt

Peter a journalist with 30 years experience of freelance writing, UK national newspaper and magazine production roles, and business development. In 2007, he developed and launched a mainstream-style green consumer magazine in the UK, called GreenerLiving, as a means of promoting sustainable change ‘within the system’. GreenerLiving closed during the post-crash recession, but Peter went on to become managing editor of the international ethical business title, Ethical Performance. However, Peter felt that the CSR sector has not succeeded in changing corporate priorities anywhere near fast enough, and so I decided to leave the treadmill of corporate employment and debt accumulation to focus on my own projects. Now poorer but a billion million times happier, he writes on political, economic and social issues – usually seriously, but sometimes as satire. He's currently writing Psychopath Economics, a book about the logic of social and economic power, belief systems, and the rise and fall of societies. Peter is convinced that ordinary people must educate themselves and exercise their economic leverage if we are to avoid social and environmental destruction.

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