This section of the Introduction is in two parts:
Over the last two decades, business leaders, civil society and governments have been exploring the issue of human rights and business. Multinational, national and local businesses, including finance sector organisations, are not subject to the international human rights laws which apply to governments. However, a consensus was emerging that within their ‘sphere of influence’, businesses did have a role to play in relation to human rights laws and principles. Attempts were made (by the UN, NGOs and business leaders) to understand, define and clarify these responsibilities.
In July 2005, Professor John Ruggie was appointed as the United Nations Secretary-General’s Special Representative on the issue of human rights and transnational corporations and other business enterprises. His mandate included identifying and clarifying standards of corporate responsibility and accountability for transnational corporations and other business enterprises with regard to human rights. The outcome of his work is explored in the next section, Human Rights and the UN Special Representative.
Meanwhile, recognition has been growing amongst many businesses that awareness of their own human rights impacts and public and political expectations of corporate behaviour, nationally and internationally, is an important component in managing risk and securing and maintaining a licence to operate. Respect for human rights may in some markets enhance the competitive edge of a company, as consumers put a value on ethical behaviour.
While the violation of human rights is generally considered to refer to widespread, high profile atrocities perpetrated by governments or arising in conflict zones, human rights also extend into many areas where businesses have responsibility or influence and can contribute in a positive way, including:
A company which has operations in regions where human rights abuses are routine, may find that its conduct in those regions is subject to scrutiny by regulators, governmental agencies, non-governmental organisations (NGOs), socially responsible investors (SRI) and their own employees and customers.
Any actual or perceived association with material abuses may give rise to:
In some cases a multi-national company may experience strong pressure to withdraw from the region altogether.
A positive stance on human rights can help a business to anticipate and manage risk in a more effective manner; enhance a company’s reputation for good governance; and limit the risk of "sleepwalking" into avoidable controversy. Also, it may assist a company in establishing operations, or continuing to operate, in areas with poor human rights records by reducing the potential for association with poor practice and subsequent public criticism.
Human rights, therefore, can have material reputational, operational, financial, and legal implications for a company.
In 2008, the UN Secretary-General’s Special Representative on Business and Human Rights, Professor John Ruggie, put forward a framework on business & human rights. This rested on three pillars:
The UN’s Human Rights Council unanimously welcomed the ‘Protect, Respect and Remedy’ Framework in 2008 and extended the Special Representative’s mandate until 2011 with the task of operationalising and promoting the Framework.
Following further extensive consultation with the business community, NGOs, academics and others, John Ruggie issued "Guiding Principles on Business and Human Rights: Implementing the United Nations 'Protect, Respect and Remedy' Framework". This was unanimously endorsed by the UN’s Human Rights Council in June 2011.
The ‘Protect, Respect and Remedy’ Framework
Protect: The framework sets out five ways in which states can work to promote corporate respect for human rights and prevent corporate abuses of human rights.
Respect: Corporate responsibility to respect human rights means acting with due diligence to avoid infringing the rights of others and addressing harms that do occur. A company’s responsibility to respect applies across all its business activities and relationships.
It is clear that there are few if any internationally recognised human rights that a business cannot impact, or be perceived to impact in some manner, so companies should consider all such rights.
Remedy: The framework indicates that states have to ensure that when human rights abuses occur, those affected have access to effective remedy through judicial, administrative, legislative or other appropriate means.
People who believe that that their human rights have been abused should be able to bring this to the attention of their government or the company involved and seek remediation. A business which is indirectly linked to abuses through a business relationship is not required to provide for remediation, though it may take a role in doing so.
Guiding Principles on Business and Human Rights
The Guiding Principles set out 31 principles, with a commentary on each, to assist states and companies to implement the ‘Protect, Respect and Remedy’ Framework.
14 Principles directly address the business community. Quintessentially these principles rest on 2 core elements:
If you want access to the full reports, there is a link in the resource section of this Tool, under the heading ‘Human Rights and Business’.
At their meeting in May 2011, Ministers from OECD (Organisation for Economic Co-operation and Development) countries adopted updated Guidelines for Multinational Enterprises, which include new recommendations addressing human rights. These recommendations draw upon the ‘Protect, Respect and Remedy’ Framework and Guiding Principles. There is a link to the OECD Guidelines in the resource section.
