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Opinion

9 Oct 2014

Author:
Mark Hodge & Catie Shavin, GBI Secretariat

Recommendations & FAQ for business in light of binding treaty process

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FIVE EARLY RECOMMENDATIONS FOR BUSINESS

Responding to the prospect of an international treaty on Business and Human Rights

Mark Hodge,Executive Director, and Catie Shavin, Associate, Global Business Initiative on Human Rights[1]. This is an excerpt from a longer article that can be downloaded here


On 26 and 27 June 2014, the UN Human Rights Council passed two resolutions focused on business and human rights.  The first, sponsored by Ecuador and South Africa, provides for the creation of an intergovernmental working group to elaborate a treaty on transnational corporations and human rights. The second resolution, drafted by a long-standing cross regional group comprising Argentina, Ghana, Norway and the Russian Federation, extends the UN Working Group on Business and Human Rights' mandate for a further three years. Our view is that the business community would do well to develop a clear understanding of what happened and did not happen in June.
Please see our FAQ sheet for further information about these developments.

There are now two parallel tracks of work at the UN level – that relating to the treaty process and that of the UN Working Group. Some fear that the UN Guiding Principles on Business and Human Rights(UNGPs),which were unanimously adopted by the HRC in June 2011, will not be central to both tracks – especially the treaty discussions track - and so are at risk of being undermined. In reality, the resolution calling for the development of a treaty does not say that work on UNGPs should be stopped, and both resolutions could be progressed in a manner consistent with the UNGPs. Despite any discomfort with the complicated nature of an intergovernmental process, and the possible inclination to “wait and see“, companies – and affected communities - will be better off if they continue to focus on implementing the UNGPs and working to achieve, and demonstrate, positive human rights outcomes on the ground. Many companies are already on a path to understanding and implementing respect for human rights using the UNGPs. For them, the message right now is simple – remain focused and engage others, especially States – on their implementation. The UNGPs remain the authoritative global standard, and are likely to be the basis of any future international project.

FIVE RECOMMENDATIONS

  1. Focus on implementation.Companies should continue to work towards meeting the responsibility to respect human rights as set out in the UNGPs. Nothing in the Ecuador-sponsored resolution suggests otherwise. Developments in June at the UN actually demonstrated on-going and strong State support for the UNGPs. Over the coming years, companies' human rights performance will continue to be assessed by investors, governments, business partners and a large part of civil society with reference to the standard of conduct set out in the UNGPs. Accordingly, businesses that have made significant progress to meet the responsibility to respect will be well positioned to meet the expectations of any new or revised frameworks that emerge – including at the international level. As the UNGPs themselves state, legal developments have to be part of a smart mix of measures – national and international, mandatory and voluntary – to foster business respect for human rights [Commentary to the UNGPs, p.8, A/HRC/17/31]. Furthermore, implementing the UNGPs makes business sense. Many major corporations have publicly shared that they see a clear, long-term business case for respecting human rights that includes improved risk management and compliance, efficiency gains, reduced operational disruption, sustained license to operate, new business models, reduced reputational risk and access to capital and market.

  2. Demonstrate results. The adoption of the treaty-focused resolution came to pass in part from the perception that implementation of the UNGPs has been too slow and that they do not offer sufficient incentive to ensure sustained changes in business practice. Businesses have a legitimate interest in seeking to ensure that the treaty discussions are based on a sound understanding of the value added by the UNGPs, and the progress that has and continues to be made within the UNGPs framework. Sharing information about progress – however initial or partial – is also important because it provides insights about the rate at which progress can be realistically expected. Many observers simply don’t understand what it takes to bring about genuine organisational change. Accordingly, it will be important that companies seek opportunities to share their experiences and to demonstrate both the steps they are taking and the challenges they have confronted. To validate the value of the UNGPs, companies should also identify opportunities to showcase how the UNGPs have changed mind-sets, strategies, policies, practices and stakeholder relationships. In order to tell a bigger story, business associations and industry groups should find coordinated ways to aggregate qualitative and quantitative evidence of progress and challenges. Of particular interest will be examples of collaboration with NGOs (local as well as international), workers' organisations, national human rights institutions and governments, in which all actors are applying the UNGPs to achieve meaningful human rights outcomes.

  3. Demand leadership from home and host governments.Companies should seek to identify opportunities to reinforce and support States' work to implement their State Duty to Protect as set out in the UNGPs, including supporting States to devise strategies that lead to positive human rights outcomes and wider up-take by the business community. This may start with home governments but it should not stop there. It should certainly include engaging governments around the world where the company does business. In practice, this could involve requests for regular updates or reports about States' progress on “Pillar 1” implementation (including but not necessarily limited to the development of a National Action Plan). It could also involve more in-depth efforts such as working collaboratively to devise meaningful State-led commercial incentives (e.g. via public procurement, financing and licensing), supporting capacity of relevant local institutions and collaborating to find local solutions to human rights risks. Engagement with States should occur at all levels - local, national, regional and in multilateral fora. The key message should be a call for consistency and convergence, with the UNGPs as the reference point. This will require coordination within companies, including raising awareness and achieving buy-in from government relations and legal teams, as well as subsidiaries.

  4. Engage constructively on “Access to Remedy”. As a recently released International Organisation of Employers draft position paper notes: “Insufficient enforcement of human rights and the lack of effective judicial frameworks do not mean that companies can progress with their business activities unimpeded and without restrictions … rather, it is the opposite”. Engaging constructively starts with consistently improving operational level grievance mechanisms and sharing lessons and good practices. Engaging also involves actively participating – directly or via business associations (like the IOE) – with projects being led by various actors. Importantly, companies (in fact all actors) should be willing to argue for rights-based considerations such as due process, accessibility, costs to victims, expediency, good outcomes and reconciliation between parties. Businesses should promote evidence-gathering and capacity building in the space between courts and company-led grievance processes. This is an area where businesses may be able to contribute innovative new ideas to improve remediation, especially where barriers to judicial mechanisms seem insurmountable. All of this extends to encouraging in-house counsel to consider such options when they face allegations or grievances, and to engage proactively with affected rights-holders.

  5. Don’t fall off the radar. Have a voice. Companies should recognise that the participation of business leaders and practitioners at international fora makes a difference. Perceptions of progress made by both States and business under the UNGPs have a strong influence on the international business and human rights policy agenda, which in turn shapes the business environment. So, it remains important to ensure that business continues to have a confident and considered voice in key discussions and events. A number of obvious opportunities exist, not least the UN regional forums and the UN Annual Forum (the third of which is to be held in Geneva on 1 - 3 December 2014). Further, if one is pro-active and well prepared, all of this can support a company to gain knowledge and be well positioned. The Annual Forum can be a chance to forge relationships with leading NGOs, meet with human rights experts who can provide feedback on dilemmas and connect with victims' impacted by one’s company or industry. Beyond that, the forum can provide an opportunity to set up B2B learning exchanges that can offer insights into good practices.

In short, as the conversation about new international instruments evolves, it will be tempting to adopt a pro- or anti-treaty position. In our view it is premature to take a stance either way given that the scope and content of a treaty are at present unclear. Companies should certainly be aware of what took place in June at the UN and what steps lie ahead (again, please see our FAQ). But first and foremost, business leaders should do what they do best - focus on action and results.


[1]   The Global Business Initiative on Human Rights (GBI) exists to advance human rights in a business context around the world. GBI is led by a core group of 18 major corporations headquartered in Asia, Europe, Latin America, the Middle East, North Africa and North America. GBI focuses on how companies implement corporate respect for human rights, in all industries and in all geographies. Members are committed to knowing and showing that they respect human rights and via honest and pragmatic peer learning, seek to enhance their own efforts, and the efforts of peers. GBI also seeks to support constructive business inputs into the international policy agenda. The views expressed in this article are those of the GBI secretariat and do not necessarily represent the views of, and should not be attributed to, GBI member companies.