Human Rights: An Inconvenient Truth

The debate on business and human rights is set to heat up this year with the 60th anniversary of the UN General Assembly resolution adopting the Universal Declaration of Human Rights (UDHR). The Beijing Olympics and a sharpened focus on the potential winners and losers in the climate change crisis is also a factor. But maybe most significant of all is the imminent release of the next installment from the UN Special Representative on Business and Human Rights, John Ruggie, in his report to the UN Human Rights Council.

The debate on business and human rights so far has been polarized between those who believe only regulatory action can work and those who believe voluntary corporate action and market innovation will be more effective.

So the Human Rights Watch (HRW) release last week of their report Business On The Margins of Profit, Rights at Risk in The Global Economy is very much a curtain raiser for things to come. The main thrust of the report is an inconvenient enough truth, human rights is a pervasive responsibility for all businesses everywhere not just a fringe issue for an isolated set of circumstances. And unlike CO2, it’s not an issue that can be easily ‘offset’.

Business impacts on human rights are not limited to sectors that have received the most attention to date, in particular apparel manufacturing and the extractive industries. Rather, the activities of all types of businesses – large and small, domestic and international, public and private – in all sectors can implicate human rights. To properly combat business related human rights abuse, this broader set of actors and contexts needs to be addressed.

But don’t take it from HRW, this week Forbes Magazine also covers the issue with its report: Child Labor: Why We Can’t Kick Our Addiction.

Beyond labor rights, the HRW study also examines business impact on the right to security, economic and social rights, civil and political rights, non discrimination, indigenous peoples rights and the right to effective remedy and accountability. From the tech sector Microsoft, Yahoo!, Google and Skype come in for some criticism:

Companies such as Google, Microsoft, Yahoo! and Skype, seeking access to the lucrative Chinese market, have assisted and reinforced the Chinese government's system of arbitrary, opaque and unaccountable political censorship.

Incidentally, in a demonstration of how business can actually exert influence to defend human rights, Jerry Yang last week wrote to Condolezza Rice asking the US State Department to approach the Chinese government in support of Shi Tao. Tao, a political dissident journalist, was arrested by the Chinese government after Yahoo! handed over his user details to the authorities upon request. Many might say this is too little too late but I think this is a good step.

But the issue of business and human rights in the main is less about the rare cases of direct complicity of business in human rights violations. The problem comes in the actions of many partners and suppliers across the value chain and the subsequent dilution of responsibility.

… in assessing the impact of business activity on human rights, it is important to focus on company ties to third parties that commit abuse as well as cases in which businesses themselves directly cause harm. Such third parties are often government agents - such as security forces – working in coordination with companies or on behalf of company interests. Other times the negative human rights impact stems from business failure to take adequate steps to prevent misconduct by employees, suppliers or others with whom it has business relationships.

In the end, Human Rights Watch does not fall squarely into the camp of voluntarism:

..even when codes of conduct or commitments to social responsibility exist they are often not adequately implemented. Additional standards and compliance mechanisms are needed.

In fact, Human Rights Watch joined a petition to John Ruggie of over 100 NGOs led last October by the International Network for Social and Cultural Rights calling on him to specify the limits of ‘self regulation’ in his final report. This petition pronounced harshly on voluntary CSR initiatives.

Due to their voluntary nature, they typically fail to ensure that the principles which they advocate are upheld in practice; even the relatively more robust multi stakeholder initiatives fall far short of what is needed to ensure compliance.

John Ruggie replied on the record to defend the voluntarism as, though hardly ideal, maybe the most viable near term option to maximize human rights defense in a global economy without globally joined up, democratic governing institutions.

It is also worth noting that when the challenge we face is imposing human rights obligations on states there is no “higher” expression of authority than international legal norms and instruments that we can turn to. Hence our options are limited. In contrast, corporations are subject to multiple sources of authority higher than themselves, including home and host states, shareholders, broader market forces, and their more informal social licenses to operate. All can and need to be mobilized in devising an effective response to business-related human rights challenges.

This is an important debate to monitor and I think everyone agrees neither total voluntarism nor total regulatory intervention alone will work but some combination of the two is required. It is the make up of the balance that is now in debate. What is already crystal clear is that we face a complex international regulatory framework made of up of hard and soft compliance obligations. Business leaders have got to be savvy enough to understand that voluntarism does not mean laissez faire and the invisible hand. Voluntarism means hard work to define and negotiate with relevant stakeholders an appropriate response to material ethical and environmental issues relating to the core business.

This will all play out over decades not months or even years but 2008 will be a defining moment in time.