This post considers the quite thorny issue of the way states might approach their obligations to protect human rights as elaborated most recently in the U.N. Guiding Principles on Business and Human Rights for implementing the UN “Protect, Respect and Remedy” Framework (GPs).
(Pix (c) Larry Catá Backer 2014)
Using the framework of National Action Plans recently encouraged by the UN Working Group on the issue of human rights and transnational corporations and other business enterprises, the post suggests that these plans, and the approach undertaken by many states to implement the GPs may be misdirected. Rather than focusing on inward discipline, transparency, and cohesion of domestic law and policy, states have tended to focus outward on efforts to regulate the corporate responsibility to respect human rights. In the process they ignore one of the most important elements of the state duty to protect human rights--the obligations of states to get their own governmental houses in order and to minimize governance and remedial gaps within the architecture of state power.
The post concludes that national action plans may provide useful vehicles for states to conduct internal human rights due diligence and to build a sound governmental (and inter-governmental) foundation on which the management of the human rights behaviors of business might be most effectively undertaken. That might suggest that NAPs to focus on transparent and accessible human rights law and policy mapping, on the articulation fo human rights sensitive governance operations for state owned enterprises and adequate contractual oversight of enterprises performing traditional governmental functions, and the appropriate management of sovereign investment (both internally in development and externally in foreign projects and markets).
Using the framework of National Action Plans recently encouraged by the UN Working Group on the issue of human rights and transnational corporations and other business enterprises, the post suggests that these plans, and the approach undertaken by many states to implement the GPs may be misdirected. Rather than focusing on inward discipline, transparency, and cohesion of domestic law and policy, states have tended to focus outward on efforts to regulate the corporate responsibility to respect human rights. In the process they ignore one of the most important elements of the state duty to protect human rights--the obligations of states to get their own governmental houses in order and to minimize governance and remedial gaps within the architecture of state power.
The post concludes that national action plans may provide useful vehicles for states to conduct internal human rights due diligence and to build a sound governmental (and inter-governmental) foundation on which the management of the human rights behaviors of business might be most effectively undertaken. That might suggest that NAPs to focus on transparent and accessible human rights law and policy mapping, on the articulation fo human rights sensitive governance operations for state owned enterprises and adequate contractual oversight of enterprises performing traditional governmental functions, and the appropriate management of sovereign investment (both internally in development and externally in foreign projects and markets).
On 16 June 2011, the UN Human Rights Council endorsed Guiding Principles on Business and Human Rights for implementing the UN “Protect, Respect and Remedy” Framework. Developed under the mandate of John Ruggie as Special Representative to the UN Secretary General on Human Rights and Transnational Corporations and Other Business Enterprises, the GPs provide – for the first time – a global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity. The Guiding Principles are framed as three related governance regimes--a 1st Pillar state duty to protect human rights, a 2nd Pillar corporate responsibility to respect human rights, and a 3rd Pillar obligation to provide effective remedies for breaches of human rights. These pillars
are grounded in recognition of (a) states' existing obligations to respect, protect and fulfill human rights and fundamental freedoms; (b) the role of business enterprises as specialized organs of society performing specialized functions, requiring to comply with all applicable laws and to respect human rights; and (c) the need for rights and obligations to be matched to appropriate and effective remedies when breached. (GP General Principles).
As part of the OHCHR's mandate to lead the business and human rights agenda within
the United Nations system and to further elaborate the GPs and its operationalization, the UN Human Rights Council, at its 17th session (resolution A/HRC/17/4), established a Working Group on
the issue of human rights and transnational corporations and other
business enterprises, consisting of five independent experts, of
balanced geographical representation: Mr. Michael Addo; Ms. Alexandra Guaqueta - Chair; Ms. Margaret Jungk; Mr. Puvan Selvanathan; and Mr. Pavel Sulyandziga. In collaboration with the Working Group,
OHCHR provides guidance on interpretation of the Guiding Principles (A/HRC/RES/21/5). In 2012, OHCHR issued an Interpretive guide to the corporate responsibility to respect human rights: see HR/PUB/12/02; Opinion issued by OHCHR in response to a request regarding the Guiding Principles and the financial sector; Opinion issued by OHCHR in response to letters regarding the Porgera remediation framework; Advice to the OECD on the application of the Guiding Principles to the financial sector).
It is within this administrative context that one expects to see much of the international institutional work of providing influential guidance for implementing the GPs by states, corporations and others. Yet, despite the polycentricity at the heart of the GPs (its recognition of multiple intersecting but autonomous behavior shaping regimes), the state (and its domestic legal orders) remains at the center of human rights systems. Sometimes, as I have argued elsewhere, that centrality can have perverse effects (The 2nd U.N. Forum on Busness and Human Rights Live Streaming and Thoughts on Trends in Managing Business Behaviors). Still, it remains fundamentally important to recognize the role of states in contributing to human rights enhancing behaviors--of itself and its governmental apparatus, of its citizens, and of the businesses over which it asserts authority.
The efforts of states under the GP are founded on the 1st Pillar duty (GP Principles 1-10) to "protect against human rights abuse within their territory and/or jurisdiction by third parties, including business enterprises" (GP Principle 1) as a specific expression of the basic general state duty to "respect, protect and fulfill human rights and fundamental freedoms" (GP General Principles). They also extend to the 3rd Pillar duty to "take appropriate steps to ensure, through judicial, administrative, legislative or other appropriate means, that when such abuses occur within their territory and/or jurisdiction those affected have access to effective remedy" (GP Principle 25).
Recently the Working Group has sought to encourage states to think more comprehensively about their role under GP Pillars 1 and 3 by engaging in the exercise of preparing "National Action Plans." These NAPs are understood to offer a tool for governments to articulate priorities and coordinate the implementation of the GPs, to effectively conduct a due diligence exercise in the furtherance of their duty to protect human rights.
The UN Working Group strongly encourages all States to develop, enact and update a national action plan as part of the State responsibility to disseminate and implement the Guiding Principles on Business and Human Rights. The Working Group recognises the challenges of producing a comprehensive and effective national action plan and it is willing to assist States in this process. (UN Working Group, State National Action Plans)
The Working Group has also recognized that such efforts can exact significant costs in terms of institutional resources that may be required to undertake the effort. Many states with modest means and institutional infra structure, or with modest experience int he area, may find the task of NAP preparation harder. To ease that burden, build capacity and promote harmonious development of national approaches (subject, of course, to the national context in which these exercises are undertaken), the Working Group has sought to develop guidance for states in fashioning contextually relevant NAPs. To that end, it set out an ambitious consultation and information gathering process with the following milestones:
- February 2014: Open Consultation on the strategic elements of national action plans in the implementation of the Guiding Principles on Business and Human Rights;
- February 2014: Launch of the Working Group's “State national action plans” online repository and annual review process;
- April - May 2014: Online consultation on a national action plan baseline draft and State survey of progress with national action plans and other Guiding Principles implementation efforts;
- May 2014: Expert workshop on national action plans during Working Group’s eighth session (May 8);
- May - June 2014: Working Group to draft its report to the General Assembly on national action plans;
- June - November 2014: Further Working Group research, consultation and drafting of guidance on national action plans;
- October 2014: Working Group to present its report on national action plans to the General Assembly in New York. The report will include a conceptual basis for guidance on the development, implementation and follow up of a national action plan;
- December 2014: Working Group to launch draft guidance on national action plans. The Working Group will pilot the guidance for two years;
- 2015: Review of the guidance;
- December 2016: Working Group to release its final guidance on State national action plans. (UN Working Group, State National Action Plans)
It is in that context that it may prove useful to consider not merely the specific elements for guiding states in the preparation of NAPs, but also the fundamental premises that should serve as the base on which to build such plans. A consideration of those issues is my object here.
In developing guidance for the preparation of NAPs it is useful to keep the principal objective in mind--a focus on developing those essential substantive and process elements of NAPs in the implementation of the GPs. These ought to include the sharing of early lessons, the identification of opportunities, risks and challenges in plan construction, the development of common understanding of essential NAP elements, the mapping of important policy options set out in the GPs, the framework within which the connections between Pillars 1 (state duty) and 3 (remedies) ought to be addressed, and the focus on regulatory coherence (both internally and multi-laterally). As important, the NAPs ought to develop mechanisms for monitoring, assessing and transparency of national goals and efforts. This last provides an opportunity to deepen an essential element of GP implementation--meaningful civil society participation, comprehensive buy-in from a broad cross section of government (including administrative and legislative functionaries), and effective accountability in ways that permit a constant re-assessment and development of GP implementation as national conditions change.
One of the great difficulties of the NAP process is to provide guidance on unpacking the fairly dense language of the GPs and their relevant commentaries in a way that adheres to the spirit and intent of the GPs. While that is the essence of operationalization, it also requires going beyond a narrow reading of the "rules" and embracing mechanisms and techniques that provide functional attainment of the GP's objectives. This involves substantially more than regulatory "gap filling" or "interpretation;" it also requires further development of the GPs themselves in line with their functional premise. Here it becomes evident that the GPs become a powerful tool when they are understood not in formalist (and narrowly legal) terms, but in functional and policy terms. In this sense, lawyers play an important, but not an essential, part. The action may sound in the language of governance but the spirit must be rooted in policy. And the object of the exercise must be centered on the state itself first. The state is hardly in a position to undertake its duty to protect human rights if it is not functionally able to even effect this duty. A basic human rights due diligence exercise on the state and its capacity for undertaking its duty successfully, then, is or ought to be at the heart of any NAP exercise.
This approach is particularly important in four critical areas that I will consider here: (1) defining the principal focus of the state duty under the GPs (gaps, risks, regional considerations); (2) trade and investment agreements and procurement; (3) judicial and non-judicial mechanisms; and (4) due diligence and disclosure requirements.
(1) defining the principal focus of the state duty under the GPs (gaps, risks, regional considerations).
The core focus of NAP construction necessarily centers on the relationship of the GPs to state action. It has been all too common for the focus of this exercise to turn outward from the state to the objects of the regulatory exercise--that is to jump directly to GP Principle 1 without stopping for a moment to undertake the more difficult basic task of the General Principles of the GP, to focus on the political and administrative architecture of the state with respect to its existing legal obligations and policy objectives to protect and fulfill human rights and fundamental freedoms. But this omission is compounded by a tendency, sometimes, to see in GP Principle 1 no more than an obligation to use law to "harden" a corporation's obligations under Pillar 2 (the corporate responsibility to respect human rights). And again, in that exercise the state, and its duty disappear within its object--the multinational corporation. These ideas are sometimes expressed in the form of the question: do states have a duty to compel a company to respect human rights?
But such an approach poses substantial risks to the GP project and threatens to distract states from their principal role as states within transnational and embedded systems of human rights regulation. Thus, consider the question in a different light, one that starts from the state duty and then proceeds to the expression of that duty in the management of its economy with fidelity to human rights regimes. From this perspective starting from the regulation of companies and proceeding backwards to the law and policy from out of which this regulation emerges seems somewhat backwards. Yet, it also suggests the need to re-shift the focus of state duty frameworks from the objects to the subject of the state duty.
Indeed starting from the end point and moving backwards from the corporation ot the state presents a number of potential perils. First, it provides no guidance about methods. Second it suggests that the end of the state duty is merely corporate hr regulation, a conclusion at odds with the basic state duty. And most significantly it created a very certain danger of sloppiness that could pervert the structures and premises of the GP. Specifically it can suggest that the principal object of the 2st pillar is to legislate a national approach to the second pillar. In effect thus could turn the state duty into little more than a gateway to the nationalization of the second pillar, undermining the autonomous structures of both in the process. It also suggests a binary that was rejected by the core premises of the GP themselves--that regulation reflects a set of binary tensions in opposition:
And indeed the end objective of the state duty to protect human rights ought to be the expression of that duty in the management of a state's political economy (with sensitivity to the ideological basis of that system: free market, capitalist, socialist Marxist-Leninist, etc.). But to start at the end may well imperil the GP project. The first Pillar instructs states that they must, as an initial matter, deal with the structures and substance of their own duty to protect human rights, before they turn that aggregation of duty (expressed in law and policy) outward to regulatory objects. Thus every NAP ought to require states to look to themselves first. To do otherwise is to risk, by shifting the focus of the state duty to companies (and Pillar 2), veiling the state duty and functionally risking privatization of the state duty itself.
The NAP focus on general principles, gap filling and risk raises other potential issues and complexities as well. First, unlike the Second Pillar which imposes a uniform definition of core human rights that make up human rights responsibilities of corporations (GP Principle 12), the First Pillar makes clear that the law and policy based human rights duties of states are contextual--that the First Pillar is grounded in rejection of any one size fits all premise. Yet, the very nature of NAP capacity building functions, especially for states with modest resources and little experience, risks the possibility of using NAPs as a means of creating unnecessary uniformity among NAPs. And that uniformity would likely tend to mirror the preferences and choices of developed states. And indeed, there is a strain of thought that suggests--much in the manner of regulatory cram down inherent in the Financial Stability Board system (discussed in Larry Catá Backer, Private Actors and Public Governance Beyond the State: The Multinational Corporation, the Financial Stability Board and the Global Governance Order, 18(2) Indiana Journal Of Global Legal Studies 751 (2011))--that NAPs serve in way to provide templates form the Global North to the Global South. I can only hope that this approach might be avoided, and with it also avoiding creating NAP guidance that might be criticized as inadvertently neo-colonialist, and favoring a top down approach. Worse, if the international community uses Global North civil society as the means through which this cram down is to be effected, the resulting colonialism becomes social and cultural--and polycentric--one in which the governance preferences of international civil society, global donors, and foundations, will be leveraged, and disguised as capacity building, substantially and unnecessarily narrow, the choices for Global South states in fashioning their compliance with their Pillar one duties.
This tendency to veil the preferences of the Global North (both through national and non-state governance regimes) in capacity building structures might also be seen in the willingness to focus on extra-territoriality as an important element of First Pillar compliance. Beyond its obvious (though sometimes hotly disputed) neo-colonialism and its implied acceptance of a power rank ordering of states to which the extent of unconstrained sovereignty is tied to rank among the "family of nations", it ought to be applied with great caution to remain true to the spirit of the GPs. GP Principle 7 does provide for extraterritoriality in those conflict zones where there is an absence of governance. And there is something to be said about the duty of states to apply international law broadly, even without their borders (e.g., Sara Seck on the Possibilities and Limits of Extraterritoriality in a Corporate Social Responsibility and Human Rights Context). But to extend national law into the territory of another state because the projecting states takes a different view of law and policy than the host state is to undue a century's worth of crafting global political society based on the core principle fo the equality of states.
This last point raises another, and perhaps the most important element of gap filling under the state duty--the obligation within the First Pillar of states to invoke multilateral and concerted effort to undertake their duty to protect human rights. GP Principle 10 quite clearly expresses the value of shifting the focus of the state duty from efforts to build and apply national laws to companies to the creation of multilateral efforts to develop coherent frameworks within which corporations can operate between and among states. It would be quite useful for the Working Group to determine the way that NAPs may be used to foster these activities.
What might this mean for the construction of guidelines for NAP development. First, it suggests that NAPs might usefully serve as exercises in internal law and policy mapping. They ought to be used as a disciplinary technique through which the state apparatus can better know itself in its approaches to human rights (byu whatever name human rights obligations are known in a particular state). Second, it also suggests that efforts be made to provide guidance for states that identifies where singular and mandatory approaches are not necessary but where national context can produce deviation. It might effectuate this by focusing on a listing of human rights related objectives rather than on the forms by which they objectives are met. Thus NAPs might be structured to best effect along functional rather than formal lines. These objectives may take any number of forms--focusing on impact, materiality, and internal capacity building, as well as on the institutional objectives necessary to provide a basis for these choices. If NAP roadmaps speak to objectives, state NAPs may make the policy choices necessary to express these objectives in contextually appropriate form. Second, NAPs should also serve as roadmaps for consultation and sectoral buy-in. This buy-in is necessary not just among national civil society elements and business, but also by all of the critical actors within the government. NAP guidance ought to provide toolkits for helping to structure such consultations and engagement. Lastly, NAPs ought to serve as a basis for determining the boundaries of actions that a state may engage in alone--and thus set a baseline for understanding the means by which multilateral activities might be effectively used.
Lastly, the WG will have to decide whether NAPs ought to be undertaken as a stand alone project, or whether they ought to be embedded in other more conventional documents. I suspect that there ought to be leeway here. The particular conditions of a state may weigh heavily in favor of one or the other option. The choice of form and placement ought not to distract from the critical focus on NAP function. As long as NAP functionality is preserved, it ought to make little difference where the NAP is embedded, or if it stands alone.
(2) trade and investment agreements and procurement.
One of the most difficult and complex areas in which it is necessary to transform the principles of the GP into concrete practice and policy is in the areas of trade and investment agreements and in the context of government procurement. Complexity emerges here in a number of dimensions.
First, trade and investment activities of states are generally undertaken in governmental functional "silos" with very little experience and less fo a taste for human rights related sensitivities. The sort of human rights due diligence exercised suggested above might be put to good effect in mapping those government functional silos which are cross cut by the need for human rights sensitivities. NAPs may provide a means of helping states determine how to manage mapping of this sort.
Second, mapping only exposes the problems, they do not solve them. NAPs might, in a capacity building effort, also suggest toolkits that might be used by states to work through issues of building administrative operations that are coherent--especially in the trade and investment areas. To that end, the human rights due diligence structures of the Second Pillar (GP Principles 17-21) might be adapted to good effect as a process by which states may review trade and investment treaties for their human rights effects before they are negotiated to finality. The solution may tax a state's governance capacity in many respects, and patience may be required. Changing governmental cultures may be as challenging as changing corporate cultures at the heart of the GPs.
Third, complexity is compounded in the trade and investment area because of the way that these conflate booth a substantive element (the nature of human rights obligations) and its remedial element (Pillar 3). That conflation becomes problematic for some because the thrust of trade and investment treaties, favoring arbitration and other non-judicial remedies, may contradict the substantive human rights by opening an avenue through which states may constrain their sovereign discretion by opening itself to arbitration. Yet I suspect that this contradiction is more problematic in theory than in fact. It is certainly true that there is a possibility that a state may cede its human rights duty through trade and investment treaties (and especially through bi-lateral trade agreements (BITs)). But this is a problem of sloppiness in administrative discipline and incoherence in governmental policy rather than a problem inherent in trade and investment treaties, or in arbitration to which the state may be bound. NAPs guidance might be developed to help states identify those points where administrative coordination is necessary and perhaps provide guidance through examples of means through which administrative structures might be organized to minimize the possibility of ceding a state human rights duty to protect through BITs and regional trade agreements.
Fourth, capacity building is necessary not just among government functionaries who work in the specific substantive areas affected by human rights. Administrative segmentation is a large problem in human rights sensitive activities. "Translators" and "go-betweens" may be necessary within the state apparatus. It may also be necessary to help a state realize the mechanisms necessary to build capacity in critical but peripheral areas--embassies, military establishments, and national legislatures. NAPs may also suggest that way that states may both establish and utilize national Human Rights agencies as a facility that might navigate among ministries and between the administrative and legislative organs to ensure coordination in the state's duty to protect human rights.
Fifth, limiting consideration to trade and investment treaties, while important, does not map entirely the universe of economic activities in which the state duty to protect human rights comes into play. An important function that tends to be overlooked are state activities undertaken through sovereign wealth funds and related mechanisms. I have argued elsewhere that sovereign wealth funds have the potential to become great instruments of advancing human rights through sovereign participation in global markets (as well as in internal markets) (e.g., Larry Catá Backer, Sovereign Investing and Markets-Based Transnational Rule of Law Building: The Norwegian Sovereign Wealth Fund in Global Markets, American University International Law Review 29:1-122 (2013)).
NAP guidance should build on this possibility in constructive ways. This becomes important as international financial institutions have increasingly turned to sovereign wealth funds as an important disciplinary tool for fiscal stability. Thus there have been a growing number of states that have recently adopted sovereign wealth funds (e.g., Part 21 Sovereign Wealth Fund of Gabon (Fonds Souverain de la Republique Gabonaise)--Reimaging the State in the Global Sphere: An Inventory of Sovereign Wealth Funds as Regulator and Participant in Global Markets). They increase in importance as SWF to SWF deals become a larger force in national development strategies through large scale government projects. (e.g., Part 17 Russian SWFs--Reimaging the State in the Global Sphere: An Inventory of Sovereign Wealth Funds as Regulator and Participant in Global Markets). For NAPs that touch on sovereign wealth fund, this may also require efforts at the international level to engage the Santiago Principles, a set of voluntary principles (similar ion their field to the GPs) for best practice sovereign wealth fund organization and operation. This in turn, may suggest some utility in dialog between the Working Group and the International Forum fo Sovereign Wealth Funds. Lastly, NAPs should generally also provide a focus on sovereign investing, in whatever form attempted.
Sixth, procurement practices present their own set of unique problems. To some extent a focus on procurement is well warranted--procurement activity represents a substantial amount of state economic activity. It can be used to advance a"changing by example" strategy where the government leads by its own practice and takes the rest of society with it. Indeed, procurement can be understood as an umbrella for privatized governmental services as well as a set of economic transactions for the provisions of goods and services necessary for the internal operation of the state itself. States, thus, can use procurement as a means of providing appropriate models for contractual provisions sensitive to human rights issues that might influence private sector business behaviors as well.
But procurement practices also offers an opportunity for polycentric governance. Procurement relations are regulated both by law and by the contractual provisions of the agreement between the state and its contractees. That interplay is written into the black letter of the GPs themselves. These provide for an interplay between GP Principle 3 (regulation by law), GP Principle 6 (regulation through contract), and GP Principle 5 (oversight and monitoring). The NAP guidance ought to provide states with mechanics for combining these multiple obligation points into an efficient system of contracting (grounded in law and policy) and with effective monitoring systems. To that end best practices and model agreements and rules may be useful.
The WG might consider guidance in NAPs that would treat procurement contracts like BITs. Procurement practices are also tinged with issues that bump up against the corporate responsibility to respect human rights (in ways that may exceed the state duty to protect). Here it might be useful to provide a means of helping governments work through an NAP process that may incorporate human rights due diligence mechanisms (GP Principles 17-21) as a basic part of the contractual provisions in procurement contracts (GP Principle 6), which can then serve as a basis for monitoring and reporting under GP Principles 5 and 21.
Yet, getting the formal model right does not guarantee good practice. NAPs must consider not merely toolkits for good procurement practices (as law, policy and contract, perhaps with best practice forms and examples) but will also need to provide guidance for training and monitoring procurement officers, and procurement monitors. These officials my be both administrative officers and monitors from the legislative apparatus. In either case, NAP guidance ought to help states work through the issues of procurement in ways that are sensitive to the protection fo human rights objectives of the 2st Pillar. In this context, the NAPs ought to consider the articulation of detailed human rights impact analyses as a necessary element of government contracting.
(3) judicial and non-judicial mechanisms.
At a theoretical level, many have argued that most states can hold corporations or individuals to account for gross violations of human rights (whatever their scope in each state). At a practical level, however, such liability may be much harder to realize. Most states have developed substantial limits on access to justice, or more prosaically, on access to courts. The minimal transaction costs of accessing courts may be higher than the means available for people of modest means. In addition, process rules may also functionally limit the scope of available remedies. In the context of business and human rights, these include strong protections of separate corporate business personality (discussed e.g., Larry Catá Backer, Backer, Larry Catá, The Autonomous Global Enterprise: On the Role of Organizational Law Beyond Asset Partitioning and Legal Personality. Tulsa Law Journal, Vol 41, 2006), forum non conveniens rules in some jurisdictions, standards of proof (especially relating to proof of intent), statutes of limitations that might substantially reduce the time available for investigation before a complaint is filed, and choice of law rules.
In addition many states do not have Paris Principles based national human rights institutes. "National Human Rights Institutions (NHRIs) that comply with the principles relating to the status of national institutions, commonly known as the Paris Principles, are playing a crucial role in promoting and monitoring the effective implementation of international human rights standards at the national level, a role which is increasingly recognized by the international community." (United Nations Human Rights, OHCHR and NHRIs). NAPs might serve as a useful tool for focusing government on the need for the establishment of an NHRI, or, if established, on the need to develop its authority in ways that enhance the state's duty to rpotect human rights. In particular, the NAPs may be a good place to consider enhancing the role of NHRIs in effecting remedies, especially for individuals and communities that lack means or capacity. Beyond advocacy, they might serve as a place to establish a remedial mechanism. Alternatively, NHRIs may usefully be empowered to bring actions before state judiciaries.
Beyond this, the NAP process may serve as a useful means of considering the value of alternative Pillar 2 remedial mechanisms--principally the OECD based National Contact Point mechanism under the OECD Guidelines for Multinational Corporations. Yet this is itself a difficult project, made more difficult because of the reluctance of many states to fully utilize the potential offered by the NCP facility in the context of human rights and corporate actiovity (e.g., Introduction; The U.S. National Contact Point--Corporate Social Responsibility Between Nationalism, Internationalism and Private Markets Based Globalization). Lastly NAP processes may be a useful framework for engaging courts in the process of state based human rights due diligence.
(4) due diligence and disclosure requirements.
(1) defining the principal focus of the state duty under the GPs (gaps, risks, regional considerations).
The core focus of NAP construction necessarily centers on the relationship of the GPs to state action. It has been all too common for the focus of this exercise to turn outward from the state to the objects of the regulatory exercise--that is to jump directly to GP Principle 1 without stopping for a moment to undertake the more difficult basic task of the General Principles of the GP, to focus on the political and administrative architecture of the state with respect to its existing legal obligations and policy objectives to protect and fulfill human rights and fundamental freedoms. But this omission is compounded by a tendency, sometimes, to see in GP Principle 1 no more than an obligation to use law to "harden" a corporation's obligations under Pillar 2 (the corporate responsibility to respect human rights). And again, in that exercise the state, and its duty disappear within its object--the multinational corporation. These ideas are sometimes expressed in the form of the question: do states have a duty to compel a company to respect human rights?
But such an approach poses substantial risks to the GP project and threatens to distract states from their principal role as states within transnational and embedded systems of human rights regulation. Thus, consider the question in a different light, one that starts from the state duty and then proceeds to the expression of that duty in the management of its economy with fidelity to human rights regimes. From this perspective starting from the regulation of companies and proceeding backwards to the law and policy from out of which this regulation emerges seems somewhat backwards. Yet, it also suggests the need to re-shift the focus of state duty frameworks from the objects to the subject of the state duty.
Indeed starting from the end point and moving backwards from the corporation ot the state presents a number of potential perils. First, it provides no guidance about methods. Second it suggests that the end of the state duty is merely corporate hr regulation, a conclusion at odds with the basic state duty. And most significantly it created a very certain danger of sloppiness that could pervert the structures and premises of the GP. Specifically it can suggest that the principal object of the 2st pillar is to legislate a national approach to the second pillar. In effect thus could turn the state duty into little more than a gateway to the nationalization of the second pillar, undermining the autonomous structures of both in the process. It also suggests a binary that was rejected by the core premises of the GP themselves--that regulation reflects a set of binary tensions in opposition:
voluntary versus mandatory regimes
business versus states
bad or self serving versus collective and serving others
transnational versus national
These opposition must be resolved in favor of law (and within) the state, which would be transformed into a vehicle for the application of international norms through their transposition into their domestic legal orders and from there applied to their corporate objects. But to write that is to lay bare the basis for its rejection. It suggests that the object of the state duty is to conflate its objectives with the responsibilities of business under their social norm and international principles frameworks. That is both impossible (states may be conduits of international law but they are also active participants in policy choices about which international norms, if any, they are willing to transpose into binding domestic law or influential state policy that informs law making and the administration of state. It thus not only conflates two autonomous bases for applying human rights regimes but also distracts from the principal focus of the first pillar, which centers on the development of formal law and policy structures for human rights and business against which business regulation may be robustly effected. And in any case it certainly provides little guidance to states. A NAP ought to provide a roadmap for getting to the end objective rather than to start with it. And indeed the end objective of the state duty to protect human rights ought to be the expression of that duty in the management of a state's political economy (with sensitivity to the ideological basis of that system: free market, capitalist, socialist Marxist-Leninist, etc.). But to start at the end may well imperil the GP project. The first Pillar instructs states that they must, as an initial matter, deal with the structures and substance of their own duty to protect human rights, before they turn that aggregation of duty (expressed in law and policy) outward to regulatory objects. Thus every NAP ought to require states to look to themselves first. To do otherwise is to risk, by shifting the focus of the state duty to companies (and Pillar 2), veiling the state duty and functionally risking privatization of the state duty itself.
The NAP focus on general principles, gap filling and risk raises other potential issues and complexities as well. First, unlike the Second Pillar which imposes a uniform definition of core human rights that make up human rights responsibilities of corporations (GP Principle 12), the First Pillar makes clear that the law and policy based human rights duties of states are contextual--that the First Pillar is grounded in rejection of any one size fits all premise. Yet, the very nature of NAP capacity building functions, especially for states with modest resources and little experience, risks the possibility of using NAPs as a means of creating unnecessary uniformity among NAPs. And that uniformity would likely tend to mirror the preferences and choices of developed states. And indeed, there is a strain of thought that suggests--much in the manner of regulatory cram down inherent in the Financial Stability Board system (discussed in Larry Catá Backer, Private Actors and Public Governance Beyond the State: The Multinational Corporation, the Financial Stability Board and the Global Governance Order, 18(2) Indiana Journal Of Global Legal Studies 751 (2011))--that NAPs serve in way to provide templates form the Global North to the Global South. I can only hope that this approach might be avoided, and with it also avoiding creating NAP guidance that might be criticized as inadvertently neo-colonialist, and favoring a top down approach. Worse, if the international community uses Global North civil society as the means through which this cram down is to be effected, the resulting colonialism becomes social and cultural--and polycentric--one in which the governance preferences of international civil society, global donors, and foundations, will be leveraged, and disguised as capacity building, substantially and unnecessarily narrow, the choices for Global South states in fashioning their compliance with their Pillar one duties.
This tendency to veil the preferences of the Global North (both through national and non-state governance regimes) in capacity building structures might also be seen in the willingness to focus on extra-territoriality as an important element of First Pillar compliance. Beyond its obvious (though sometimes hotly disputed) neo-colonialism and its implied acceptance of a power rank ordering of states to which the extent of unconstrained sovereignty is tied to rank among the "family of nations", it ought to be applied with great caution to remain true to the spirit of the GPs. GP Principle 7 does provide for extraterritoriality in those conflict zones where there is an absence of governance. And there is something to be said about the duty of states to apply international law broadly, even without their borders (e.g., Sara Seck on the Possibilities and Limits of Extraterritoriality in a Corporate Social Responsibility and Human Rights Context). But to extend national law into the territory of another state because the projecting states takes a different view of law and policy than the host state is to undue a century's worth of crafting global political society based on the core principle fo the equality of states.
This last point raises another, and perhaps the most important element of gap filling under the state duty--the obligation within the First Pillar of states to invoke multilateral and concerted effort to undertake their duty to protect human rights. GP Principle 10 quite clearly expresses the value of shifting the focus of the state duty from efforts to build and apply national laws to companies to the creation of multilateral efforts to develop coherent frameworks within which corporations can operate between and among states. It would be quite useful for the Working Group to determine the way that NAPs may be used to foster these activities.
What might this mean for the construction of guidelines for NAP development. First, it suggests that NAPs might usefully serve as exercises in internal law and policy mapping. They ought to be used as a disciplinary technique through which the state apparatus can better know itself in its approaches to human rights (byu whatever name human rights obligations are known in a particular state). Second, it also suggests that efforts be made to provide guidance for states that identifies where singular and mandatory approaches are not necessary but where national context can produce deviation. It might effectuate this by focusing on a listing of human rights related objectives rather than on the forms by which they objectives are met. Thus NAPs might be structured to best effect along functional rather than formal lines. These objectives may take any number of forms--focusing on impact, materiality, and internal capacity building, as well as on the institutional objectives necessary to provide a basis for these choices. If NAP roadmaps speak to objectives, state NAPs may make the policy choices necessary to express these objectives in contextually appropriate form. Second, NAPs should also serve as roadmaps for consultation and sectoral buy-in. This buy-in is necessary not just among national civil society elements and business, but also by all of the critical actors within the government. NAP guidance ought to provide toolkits for helping to structure such consultations and engagement. Lastly, NAPs ought to serve as a basis for determining the boundaries of actions that a state may engage in alone--and thus set a baseline for understanding the means by which multilateral activities might be effectively used.
Lastly, the WG will have to decide whether NAPs ought to be undertaken as a stand alone project, or whether they ought to be embedded in other more conventional documents. I suspect that there ought to be leeway here. The particular conditions of a state may weigh heavily in favor of one or the other option. The choice of form and placement ought not to distract from the critical focus on NAP function. As long as NAP functionality is preserved, it ought to make little difference where the NAP is embedded, or if it stands alone.
(2) trade and investment agreements and procurement.
One of the most difficult and complex areas in which it is necessary to transform the principles of the GP into concrete practice and policy is in the areas of trade and investment agreements and in the context of government procurement. Complexity emerges here in a number of dimensions.
First, trade and investment activities of states are generally undertaken in governmental functional "silos" with very little experience and less fo a taste for human rights related sensitivities. The sort of human rights due diligence exercised suggested above might be put to good effect in mapping those government functional silos which are cross cut by the need for human rights sensitivities. NAPs may provide a means of helping states determine how to manage mapping of this sort.
Second, mapping only exposes the problems, they do not solve them. NAPs might, in a capacity building effort, also suggest toolkits that might be used by states to work through issues of building administrative operations that are coherent--especially in the trade and investment areas. To that end, the human rights due diligence structures of the Second Pillar (GP Principles 17-21) might be adapted to good effect as a process by which states may review trade and investment treaties for their human rights effects before they are negotiated to finality. The solution may tax a state's governance capacity in many respects, and patience may be required. Changing governmental cultures may be as challenging as changing corporate cultures at the heart of the GPs.
Third, complexity is compounded in the trade and investment area because of the way that these conflate booth a substantive element (the nature of human rights obligations) and its remedial element (Pillar 3). That conflation becomes problematic for some because the thrust of trade and investment treaties, favoring arbitration and other non-judicial remedies, may contradict the substantive human rights by opening an avenue through which states may constrain their sovereign discretion by opening itself to arbitration. Yet I suspect that this contradiction is more problematic in theory than in fact. It is certainly true that there is a possibility that a state may cede its human rights duty through trade and investment treaties (and especially through bi-lateral trade agreements (BITs)). But this is a problem of sloppiness in administrative discipline and incoherence in governmental policy rather than a problem inherent in trade and investment treaties, or in arbitration to which the state may be bound. NAPs guidance might be developed to help states identify those points where administrative coordination is necessary and perhaps provide guidance through examples of means through which administrative structures might be organized to minimize the possibility of ceding a state human rights duty to protect through BITs and regional trade agreements.
Fourth, capacity building is necessary not just among government functionaries who work in the specific substantive areas affected by human rights. Administrative segmentation is a large problem in human rights sensitive activities. "Translators" and "go-betweens" may be necessary within the state apparatus. It may also be necessary to help a state realize the mechanisms necessary to build capacity in critical but peripheral areas--embassies, military establishments, and national legislatures. NAPs may also suggest that way that states may both establish and utilize national Human Rights agencies as a facility that might navigate among ministries and between the administrative and legislative organs to ensure coordination in the state's duty to protect human rights.
Fifth, limiting consideration to trade and investment treaties, while important, does not map entirely the universe of economic activities in which the state duty to protect human rights comes into play. An important function that tends to be overlooked are state activities undertaken through sovereign wealth funds and related mechanisms. I have argued elsewhere that sovereign wealth funds have the potential to become great instruments of advancing human rights through sovereign participation in global markets (as well as in internal markets) (e.g., Larry Catá Backer, Sovereign Investing and Markets-Based Transnational Rule of Law Building: The Norwegian Sovereign Wealth Fund in Global Markets, American University International Law Review 29:1-122 (2013)).
NAP guidance should build on this possibility in constructive ways. This becomes important as international financial institutions have increasingly turned to sovereign wealth funds as an important disciplinary tool for fiscal stability. Thus there have been a growing number of states that have recently adopted sovereign wealth funds (e.g., Part 21 Sovereign Wealth Fund of Gabon (Fonds Souverain de la Republique Gabonaise)--Reimaging the State in the Global Sphere: An Inventory of Sovereign Wealth Funds as Regulator and Participant in Global Markets). They increase in importance as SWF to SWF deals become a larger force in national development strategies through large scale government projects. (e.g., Part 17 Russian SWFs--Reimaging the State in the Global Sphere: An Inventory of Sovereign Wealth Funds as Regulator and Participant in Global Markets). For NAPs that touch on sovereign wealth fund, this may also require efforts at the international level to engage the Santiago Principles, a set of voluntary principles (similar ion their field to the GPs) for best practice sovereign wealth fund organization and operation. This in turn, may suggest some utility in dialog between the Working Group and the International Forum fo Sovereign Wealth Funds. Lastly, NAPs should generally also provide a focus on sovereign investing, in whatever form attempted.
Sixth, procurement practices present their own set of unique problems. To some extent a focus on procurement is well warranted--procurement activity represents a substantial amount of state economic activity. It can be used to advance a"changing by example" strategy where the government leads by its own practice and takes the rest of society with it. Indeed, procurement can be understood as an umbrella for privatized governmental services as well as a set of economic transactions for the provisions of goods and services necessary for the internal operation of the state itself. States, thus, can use procurement as a means of providing appropriate models for contractual provisions sensitive to human rights issues that might influence private sector business behaviors as well.
But procurement practices also offers an opportunity for polycentric governance. Procurement relations are regulated both by law and by the contractual provisions of the agreement between the state and its contractees. That interplay is written into the black letter of the GPs themselves. These provide for an interplay between GP Principle 3 (regulation by law), GP Principle 6 (regulation through contract), and GP Principle 5 (oversight and monitoring). The NAP guidance ought to provide states with mechanics for combining these multiple obligation points into an efficient system of contracting (grounded in law and policy) and with effective monitoring systems. To that end best practices and model agreements and rules may be useful.
The WG might consider guidance in NAPs that would treat procurement contracts like BITs. Procurement practices are also tinged with issues that bump up against the corporate responsibility to respect human rights (in ways that may exceed the state duty to protect). Here it might be useful to provide a means of helping governments work through an NAP process that may incorporate human rights due diligence mechanisms (GP Principles 17-21) as a basic part of the contractual provisions in procurement contracts (GP Principle 6), which can then serve as a basis for monitoring and reporting under GP Principles 5 and 21.
Yet, getting the formal model right does not guarantee good practice. NAPs must consider not merely toolkits for good procurement practices (as law, policy and contract, perhaps with best practice forms and examples) but will also need to provide guidance for training and monitoring procurement officers, and procurement monitors. These officials my be both administrative officers and monitors from the legislative apparatus. In either case, NAP guidance ought to help states work through the issues of procurement in ways that are sensitive to the protection fo human rights objectives of the 2st Pillar. In this context, the NAPs ought to consider the articulation of detailed human rights impact analyses as a necessary element of government contracting.
(3) judicial and non-judicial mechanisms.
At a theoretical level, many have argued that most states can hold corporations or individuals to account for gross violations of human rights (whatever their scope in each state). At a practical level, however, such liability may be much harder to realize. Most states have developed substantial limits on access to justice, or more prosaically, on access to courts. The minimal transaction costs of accessing courts may be higher than the means available for people of modest means. In addition, process rules may also functionally limit the scope of available remedies. In the context of business and human rights, these include strong protections of separate corporate business personality (discussed e.g., Larry Catá Backer, Backer, Larry Catá, The Autonomous Global Enterprise: On the Role of Organizational Law Beyond Asset Partitioning and Legal Personality. Tulsa Law Journal, Vol 41, 2006), forum non conveniens rules in some jurisdictions, standards of proof (especially relating to proof of intent), statutes of limitations that might substantially reduce the time available for investigation before a complaint is filed, and choice of law rules.
In addition many states do not have Paris Principles based national human rights institutes. "National Human Rights Institutions (NHRIs) that comply with the principles relating to the status of national institutions, commonly known as the Paris Principles, are playing a crucial role in promoting and monitoring the effective implementation of international human rights standards at the national level, a role which is increasingly recognized by the international community." (United Nations Human Rights, OHCHR and NHRIs). NAPs might serve as a useful tool for focusing government on the need for the establishment of an NHRI, or, if established, on the need to develop its authority in ways that enhance the state's duty to rpotect human rights. In particular, the NAPs may be a good place to consider enhancing the role of NHRIs in effecting remedies, especially for individuals and communities that lack means or capacity. Beyond advocacy, they might serve as a place to establish a remedial mechanism. Alternatively, NHRIs may usefully be empowered to bring actions before state judiciaries.
Beyond this, the NAP process may serve as a useful means of considering the value of alternative Pillar 2 remedial mechanisms--principally the OECD based National Contact Point mechanism under the OECD Guidelines for Multinational Corporations. Yet this is itself a difficult project, made more difficult because of the reluctance of many states to fully utilize the potential offered by the NCP facility in the context of human rights and corporate actiovity (e.g., Introduction; The U.S. National Contact Point--Corporate Social Responsibility Between Nationalism, Internationalism and Private Markets Based Globalization). Lastly NAP processes may be a useful framework for engaging courts in the process of state based human rights due diligence.
(4) due diligence and disclosure requirements.
Dur diligence and disclosure have been at the heart of the human rights and business conduct project for some time (discussed, e.g., Backer, Larry Catá, From Moral Obligation to International Law: Disclosure Systems, Markets and the Regulation of Multinational Corporations. Georgetown Journal of International Law, Vol. 39, 2008). The GPs focus on both disclosure (going to transparency) and due diligence (going to engagement). That focus appears in both the First Pillar duty to protect and in the Second Pillar corporate responsibility to respect human rights.
Yet the main focus of many appear to be on the corporate obligation of due diligence (GP Principles 17-19) and disclosure (GP Principles 20-21). Due diligence and disclosure by states relating to its own duty to protect human rights is substantially ignored. In its place some would argue that the role of disclosure and diligence must center on the role of the state in hard wiring (through law) the corporate responsibility to engage in human rights due diligence under the Second Pillar (Principles 17-21). But this approach creates substantial tension and incoherence that may threaten the integrity and effectiveness of the GP system itself.
The tension and incoherence is embedded in the GP system itself--and in the basic incompatibility of the human rights regimes at the center of the Second Pillar and those of the First Pillar. That incompatibility makes the notion of hardening Second Pillar human rights due diligence through national legislation more than implausible; it makes that effort potentially dangerous to the human rights and business enterprise.
The danger lies in a simple but important difference in normative focus between the First and Second Pillars. The First Pillar is careful not to define the core of human rights obligations around which the state duty arises. The reason is simple--every state has a sometimes very different list of international law and norms which it has chosen to transpose into its domestic legal order as both externally binding on the state (as against other states) and as binding within the state (as law that may be invoked by individuals before courts and administrative bodies). It is, for example, well known that the United States has refused to ratify or transpose into its domestic law a number of key instruments of international human rights law that many other states have domesticated. In contrast, the Second Pillar corporate responsibility is quite clear about the international law and norms that make up the core of the universe of human rights that enterprises have a responsibility to respect--GP Principle 12 specifies that this minimum universe of rights includes the "International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labor Organization's Declaration on Fundamental Principles and Rights at Work."
One can immediately see the problem. The first Pillar adopts a traditional and conventional approach to the state duty to protect human rights. That duty is limited by traditional concepts of applicability, which states have the power to modify as they see fit (except with respect to certain jus cogens obligations, to the extent that a state recognizes the concept of jus cogens at any rate). The universe of human rights that a state is obligated to protect under the First Pillar, then, can vary substantially form state to state. And even when a state transposes international law into domestic law, it may, by reservation, substantially limit r change its content. But if that is the case, then it is impossible for the state to serve as the regulatory source for efforts to harden the Second Pillar disclosure and due diligence rules. One cannot use the state to harden the Second Pillar disclosure and due diligence requirements because few states have recognized and incorporated into their domestic legal orders the entirety of the minimum universe of human rights law and norms specified in the Second Pillar.
What follows?
On the one hand efforts to use the state to comprehensively regulate the Second Pillar obligations of enterprises will fail. They will fail because the scope of the state's universe of human rights is not the same (and usually narrower) than the corresponding obligations of corporations to respect human rights. This accounts, in part, for the objection of some commentators to the project, driven by some global civil society organizations and states, that would seek to "legalize" second pillar obligations. For these commentators, that efforts amounts to an effort, inadvertent perhaps, to shrink the scope of the obligation of corporations to respect human rights in transnational economic activities. That, in itself, would undo a major foundation of the GPs themselves.
On the other hand, for those committed to state regulation of corporate obligations, the effort is reduced to piecemeal legislation. Thus, for example, there was great rejoicing when the U.S. included obligations of disclosure and reporting relating to conflict minerals. Yet that sends a terrible signal to the corporate community, one that suggests that no part of the Second Pillar has no effect unless it is transposed into law, and then it is only effective within those jurisdictions that have transposed and only to the extent of the transposition. The result is the functional evisceration of the Second Pillar, not just with respect to disclosure and due diligence, but with respect to the scope of the responsibility to respect as well. One need not wait for states to develop an autonomous social norm culture fo respect for human rights among businesses. Fractionalization, piecemeal legislative interventions based on momentarily politically expedient measures or national human rights law mapping, is not likely a responsible answer.
If this is the case, what might be a better approach to due diligence and disclosure for states under the First Pillar duty to protect human rights? In other words, what does this mean for the Working Group as it considers developing its roadmap for NAPs? In the first instance, such a duty, directed toward due diligence and disclosure touches on the larger issue of transparency, an important normative value in constitutional democratic states. For state action under NAPs, this translates to a need to: (1) map its human rights sensitive laws, regulations, and policies undergoing a rigorous human rights due diligence process on itself, (2) determine the deficiencies in laws, regulations, practices and policies that emerge from its due diligence exercise, (3) disclose this mapping and deficiency analysis widely and engage in broad based consultations within government and among relevant stakeholders; (4) develop the capacity to make readily and easily available to the most modest of its citizens functionally adequate access to all laws, regulations, policies, and practices that touch on the state's duty to protect human rights (and keep these updated), (5) disclose all of the state's relations with its state owned enterprises, the terms of all of its procurement agreements, and the practices and interventions related to both, and (6) fully disclose all actions, practices and rules relating to all forms of sovereign investing.
Finally, this approach does not mean that there is no room for hardening corporate responsibility through law, especially that relating to due diligence and disclosure. On the contrary, there may well be space for targeted and limited law structures. But these have to be constructed in ways that take advantage of the national context and political will of the states in which it is undertaken. My own sense is that, with the understanding that these interventions will necessarily be piecemeal or grounded on national human rights mapping, the following diligence and reporting frameworks might prove useful: (1) treat human rights as a financial contingency that must be reported on financial statements already required to be produced under law, and explained in the corporate annual report; (2) provide tax incentives for human rights remediation that substantially reduces the transaction costs and access limitations to courts and judicial remedies; (3) require human rights due diligence mechanisms and human rights reporting as a listing requirement on all securities exchanges.
This basic approach to disclosure and due diligence focuses state efforts where it principally belongs--on the state itself and its construction and maintenance of an appropriate and functionally effective framework for protecting human rights within its jurisdiction. It targets due diligence and disclosure on the mechanics of state activity. And it allows for targeted legal interventions in ways that enhance rather than subvert the Second pillar obligations of enterprises. That these might be developed through a NAP would add coherence to the project. That the Working Group might build capacity in this respect would be a great benefit for the GPs and their evolution from theory to practice.
_________
It is with these thoughts in mind that this essay concludes. The Working Group has been promoting, and quite usefully, a set of mechanisms through which states, especially those with modest capacity, might be able to develop workable national approaches to the implementation of the GPs. Those mechanisms might best be articulated through the focused discipline of a national action plan. It is, indeed, only by transforming the GP from principle to action, especially institutionalized action at the national lever (Pillar 1) and corporate action (Pillar 2) that the promise of embedding of basic human rights sensibilities in economic activity can be realized. But the effort to create a "how to" for states is itself no small effort, and a roadmap for these roadmaps is also necessary. Even these few notes on considerations for the development of a roadmap for NAPs suggests only a small part of the enormity of the project and the capacity deficiencies in states that these might reveal.
To the end of producing a substantially functional NAP roadmap, this essay has suggested that, while the ultimate object of such roadmap, and the NAPS built thereon, is to enable states to better regulate corporate human rights behaviors, that ultimate objective cannot be achieved until states build their own regulatory and administrative capacities. Human rights capacity building, then, is at the center of the state duty to protect human rights under Pillar 1 and requires states to undertake their own assessment of their laws, their legal cultures, and their own behaviors relevant to the exercise of human rights affirming conduct in the economic and regulatory structures of states. NAPs that work toward building that capacity will provide a very firm foundation on and through which states might better fulfill their obligations with respect to corporate conduct within their jurisdiction.
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