John Ruggie’s final report to the UN offers a springboard for all parties with an interest in raising business standards on human rights, says Geoffrey Chandler
It is now nearly ten years since the United Nations embarked on its latest and most sustained attempt to underpin corporate activity with principles based on the Universal Declaration of Human Rights.
The objective, seeking to marry the most effective economic mechanism the world has so far known – the competitive market economy – with the internationally agreed values of society, made eminent sense.
That this destination is still not in sight is owed to a number of causes.
First, to the flawed exercise initiated in 1998 by the UN Sub-Commission on the Promotion and Protection of Human Rights, which became known as the Norms and to the intemperate assault of the business community that followed it.
Then, after the torch had passed to the special representative of the UN secretary-general for business and human rights, Professor John Ruggie, to the attempt by Amnesty International and other human rights non-governmental organisations to deflect him from his mandate. Most importantly this called on him “to identify and clarify standards of corporate responsibility and accountability with regard to human rights” – an objective in which lay the hope of preventing future corporate abuse. The NGOs argued instead for the further study of existing abuse, something neither called for by his mandate nor necessary to its completion.
Ruggie has therefore had to tread a lonely road, his remarkable contribution inadequately appreciated. The NGOs that should have been his natural allies have proved an obstacle. The few companies sympathetic to the basic concept have kept their heads below the parapet. It is therefore not surprising that Ruggie’s “final” report should constitute a point of departure for advance towards the fulfilment of the mandate – “a conceptual and policy framework to anchor the debate” – rather than that advance itself, which, in the absence of a consensual basis, could provoke further sterile controversy.
Comprehensive
Ruggie’s report is a valuable contribution, providing an admirably comprehensive introduction to the challenge of a globalised economy, describing the failure of markets to work optimally and the gaps in governance that underlie that failure. It is to fill these gaps that Ruggie proposes a three-fold approach – the state duty to protect, the corporate responsibility to respect, and the need for access to remedies.
The report also provides further ground-clearing, which, despite Ruggie’s three years of unprecedented consultation and evidence-gathering, still needed to be done if common ground was to be established.
It has long needed to be firmly stated that companies are fully responsible for the impact of their operations on human rights. “The corporate responsibility to respect,” says the report, “exists independently of states’ duties.”
Important too is the implied rejection by omission of the NGOs’ call for an over-arching treaty imposing binding standards under international law. The victims of abuse, as Ruggie argued in the May issue of Ethical Corporation, cannot be asked to wait the decades that this would take for a hope of rescue. It is a sentiment echoed by Louise Arbour, the UN High Commissioner for Human Rights, who warns “how much damage could be done in the meantime” if only binding norms were promoted.
The three principles, “protect, respect and remedy”, are proposed as a complementary, mutually supporting whole. There is conceptual logic and political realism in proposing this. But while a fragmentation of policies and practices characterises current activity under all three headings, the practical possibility of unifying such policies and the timing thereof are significantly different for each.
The achievement of policy alignment both within and between states faces a host of potential difficulties arising from conflicting interests. Even in as liberal an environment as the UK the recently revised Companies Act, bowing to business pressure, diluted requirements for non-financial reporting, which, had they been more precise, could have allowed comparison of companies’ performance and so been a lever for behavioural change.
No single constituency can change the scene: there is, as the report says, no “single silver bullet solution”. But any implication of equality of opportunity for change in each constituency, without regard for their differential response to external pressures, must be questioned.
Reform the market
Unlike states, companies are susceptible to a single over-riding driver – competitive market forces, measuring performance primarily, if not exclusively, on financial criteria. This finds no mention in the report. It comprehensively describes the manner in which due diligence should be observed in the exercise of the companies’ responsibility to respect – by companies becoming aware of, preventing and addressing adverse human rights impacts. But the words “must” and “should” suppose that companies are already sensitised to their broader responsibilities, which has yet to be true of most.
It is in broadening the criteria on which the market judges the comparative performance of all companies in which lies the greatest hope of change in the three-pronged approach proposed.
Voluntarism has never worked to change corporate behaviour; the law lies in the distant future and can never cover the whole of corporate activity. It is therefore normative principles, what Louise Arbour calls “voluntary-plus”, and the lawyers “soft law”, which offer the most immediate hope of bringing change.
The report rightly states: “For the substantive content of the due diligence process, companies should look, at a minimum, to the International Bill of Rights and the core conventions of the ILO.” But the International Bill of Rights requires translation into principles intelligible to managers. These would be enforceable not by law, but by market forces, public opinion, NGO scrutiny and pressure, and pressure from a company’s own staff. And it is principles, a point of departure for all activities, rather than standards, a level to be attained, at which the mandate should be aiming and are within its scope to achieve.
Towards active support
A pervasive thread throughout the report is understandably the avoidance of corporate abuse, the most visible symptom of the governance gaps the report identifies. Essential though this is, it is not enough.
The fundamental challenge is more than to manage the adverse consequences of globalisation: it is to harness the influence of companies in positive support of the human rights they impact through the manner in which they operate. The Universal Declaration of Human Rights calls for respect for human rights, but also for their effective observance. Without the latter, objectives for human rights and the Millennium Development Goals will remain unattainable. Indeed the report states that “doing no harm” is not merely a passive responsibility.
With the advent in the marketplace of new international companies so far immune to reputational pressure; with the erosion of voluntary commitment seen in backsliding from the UN Global Compact and the Voluntary Principles on Security and Human Rights; and with the prospect of economic slowdown narrowing company horizons, the need for such observance has never been more urgent.
It is for this reason that we need to see the special representative’s mandate completed. Ruggie has supplied a springboard that makes forward movement possible. We now require from governments, from the corporate world and from NGOs better leadership than they have so far shown to assist the implementation of a still uncompleted task.
Sir Geoffrey Chandler founded the Amnesty International UK Business Group in 1991, and was its chair from 1991-2001.