How do we make business respect human rights?

Another long session of the UN Human Rights Council has ended in Geneva. The highlights, if we can call them that, have been country specific reports on Belarus, Syria, Myanmar, or Venezuela. Then there have been very important debates on specific forms of violation and discrimination: Michelle Bachelet’s hugely important and long awaited report into discrimination against people of African descent called for reparations for slavery, and urged countries to address their colonial past and the attitudes which are its legacy.

But quietly, away from the media spotlight, another important UN effort in human rights promotion celebrated its 10^th anniversary. In June 2011, the human rights council unanimously backed a set of guiding principles on business and human rights, designed to provide governments, multinationals, workers and human rights defenders with a set of standards businesses should abide by in order to protect and promote human rights, and remedy abuses.

So what’s been achieved in the last ten years? And where do we go from here? That’s the topic for our latest Inside Geneva podcast, amid some skepticism from human rights activists that a set of principles alone, rather than actual laws, will really bring improvements.

Huge power, little accountability?

Multinational companies have enormous power: their annual turnover can sometimes be larger than the GDP of the developing countries they are investing in. Governments of those countries want the investment, they want the jobs. Nevertheless, Lene Wendland, head of the UN’s Business and Human Rights Section, tells Inside Geneva the guiding principles should encourage governments to ensure that ‘those who have been harmed by business activity have a right to seek effective remedy through effective process.’

But the guiding principles are not enforceable, so does that mean businesses happily and voluntarily apply them? Who measures their success in doing so? And how exactly do those who have been harmed seek remedy?

Arvind Ganesan, director of the Business and Human Rights Division at Human Rights Watch, has some doubts about the principles, pointing out that ten years ago, when they were being drafted, some governments had begun thinking about introducing actual laws to govern businesses’ respect for human rights. The adoption of the principles, he suggests in the podcast, took the impetus out of the push towards legislation.

And, he argues, the principles may well fall into the trap of so much multilateral UN policy; governments can simply push back, claiming sovereignty. ‘The UN cannot regulate things at an international level that states already haven’t agreed to regulate at a national level’.

Greater awareness

What our podcast panelists can agree on, however, is that the principles have, at the very least, boosted awareness of how big multinationals operate, and their responsibilities, not just to their shareholders, but to their workers, the communities they operate in, and to the environment.

From the fashion industry to chocolate and coffee, from furniture to mobile phones, consumers want to know where the products they are buying come from, and the conditions under which they were produced.

Analyst Daniel Warner believes it’s a generational change which can only be positive. ‘I do think that more and more young people are conscious of what they wear, what they buy’, he tells Inside Geneva.

At the same time, that push for enforceable laws hasn’t entirely gone away. The European Union is moving towards legislation which will make human rights due diligence mandatory for EU companies.

Last November in Switzerland the ‘responsible business initiative’ went before voters, aimed at introducing a binding legal framework to hold multinationals based in Switzerland to account for human rights and environmental abuses committed abroad.

It gained 50.7% of the popular vote, but didn’t pass because it also needed a cantonal majority. The outcome disappointed some human rights activists, but it did oblige the government to introduce new measures requiring companies to report on human rights and environmental standards and conduct due diligence in relation to child labour and mineral sourcing from conflict areas. Like the UN guiding principles however, the Swiss measures do not include a liability clause.

So what next?

When the UN Human Rights Council assessed the first ten years of the guiding principles, member states also made recommendations on what should happen over the next decade. They acknowledged that workers and communities, including indigenous people, continue to suffer business-related abuses, and that prospects for protection or remedy are few and far between.

The UN Working Group on Business and Human Rights told the council that human rights defenders who speak out are often threatened, sometimes even attacked and killed. 

Over the next decade, the Working Group says ‘all States must make implementation of the Guiding Principles a top governance and policy priority. All businesses – including small and medium-sized enterprises – need to make respect for human rights part of their corporate culture.’

Again, these are recommendations, not laws. But the next ten years could see more legal challenges based on the guiding principles. In the year that the principles celebrated their tenth anniversary, there were two landmark cases which offer both hope, and concern.

In the Netherlands, a court ordered oil giant Royal Dutch Shell to cut its emissions faster than planned, on the grounds that the company is violating human rights by contributing to global warming.

But in the United States the Supreme Court ruled that chocolate producers Nestlé USA and Cargill cannot be sued for child slavery on African farms which supply them with cocoa.

Over the next decade, it’s up to governments, boardrooms, and shareholders to decide which of those rulings is important to them, and above all to prove to workers and consumers that they value human rights and the environment at least as much as they value their profits.