This Blog Essay site devotes every February to a series of integrated but short essays on a single theme. The Ruminations Series in 2009 produced a month long series of aphoristic (ἀφορισμός) essays, meant to provoke thought rather than explain it. The hope was that, built up on each other, the series would provide a matrix of thoughts that together might lead the reader in new directions.
For 2010, this site introduces a new series--Business and Human Rights. The series takes as its starting point the issues and questions raised by John Ruggie, the United Nations Special Representative of the Secretary-General (SRSG) on business and human rights, in a global online forumThe U.N. "Protect, Respect, Remedy" framework is made up of three pillars: the State duty to protect against human rights abuses by third parties, including business; the corporate responsibility to respect human rights, which means to avoid infringing on the rights of others; and greater access by victims to effective remedy, judicial and non-judicial. The forum is currently focused on the corporate responsibility to respect human rights, the second pillar of the framework. The forum is divided into sections, each of which contains multiple topics with space for discussion and comment.New Online Forum for U.N. Business and Human Rights Mandate, United Nations Press Release, New York and Geneva, Dec. 1, 2009. Each of the Essays will consider one of the topics raised in the online consultation. My hope is to help generate discussion and to encourage further discussion of the issues within the framework fo the consultation framework.
Part VI: Human Rights Due Diligence--Elements of Human Rights Due Diligence.
The SRSG has identified four core elements of human rights due diligence:
United Nations Special Representative of the Secretary-General on Business & Human Rights, Elements of Human Rights Due Diligence. These elements are described more as methodological elements rather than as rules based formulas in keeping with the overall principles approach to the Three Pillar Framework.
These elements are meant to be objectives rather than prescriptions for particular outputs, since the latter will vary by company and context. For example, companies should assess human rights impacts on an ongoing basis, not necessarily do a discrete human rights impact assessment -- although such an exercise may well be part of that activity.
Id. There is a strong emphasis on internal procedures and effective engagement of employees and other stakeholders. For this purpose, the importance of an effective grievance process is emphasized.
In describing human rights due diligence, it is also worth mentioning the importance of effective company-level grievance mechanisms, which provide an ongoing feedback loop and early warning system that is an essential part of human rights due diligence. This can help companies identify risks of impacts and avoid escalation of disputes; many cases of corporate-related human rights abuse started out as far lesser grievances. Moreover, by tracking trends and patterns in complaints, companies can identify systemic problems and adapt practices accordingly. To meet their responsibility to respect human rights, companies must also seek to ensure that impacts identified via this feedback loop are effectively remediated.
Id. This reflects a pattern of governance that has been much in evidence in the reform of American securities law in the wake of the enactment of the Sarbanes Oxley Act of 2002. See, Larry Catá Backer, The Duty to Monitor: Emerging Obligations of Outside Lawyers and Auditors to Detect and Report Corporate Wrongdoing Beyond the Securities Laws. St. John's Law Review, Vol. 77(4) 919, (2003).
Lastly, the linkages between Second Pillar due diligence and Third Pillar remedies is suggested. "Study of such mechanisms is part of the SRSG's work on the "Remedy" pillar of the U.N. "Protect, Respect, Remedy" framework. For more information, visit BASESwiki, the SRSG's information and learning resource on company-level and other non-judicial mechanisms." United Nations Special Representative of the Secretary-General on Business & Human Rights, Elements of Human Rights Due Diligence. Less strongly emphasized, though emphasized elsewhere, are the linkages between this Second Pillar human rightsd due diligence and the First Pillar state duty to protect. See, Larry Catá Backer, Business and Human Rights Part V: Human Rights Due Diligence--IntroductionLaw at the End of the Day, Feb. 5, 2010.
Grievance mechanisms as part of human rights due diligence suggest the strong linkages between the Second Pillar human rights due diligence mechanism, which originates in the social license responsibilities of corproations, and both First Pillar duties of states and Third Pillar obligations to effectuate credible remedial processes. The First Pillar linkages are suggested by the strong ties between the internal monitoring activities suggested by human rights due diligence and the constitutional traditions of the states in which they are implemented. These constitutional traditions may produce local rules that make simple minded harmonization of due diligence processes across the global operations of large multinational enterprises difficult. As Wal-Mart learned at great cost, the free-wheeling anonymous denunciations and disclosure that is fundamental to American style systems of grievance and information gathering raises sensitive privacy issues in Germany and evokes the Nazi-Soviet eras of paranoia against which courts and state officials are quite sensitive. For the story of Wal-Mart in Germany, see, Larry Catá Backer, Economic Globalization and the Rise of Efficient Systems of Global Private Lawmaking: Wal-Mart as Global Legislator. University of Connecticut Law Review, Vol. 39, No. 4, 2007.
There are two additional points of linkage between the First Pillar state duty and the Second Pillar Responsibility to respect that is worth considering in the context of grievance mechanisms in human rights due diligence. The first deals with state regulation of information. In some large states, the gathering and dissemination of information is not a matter of internal private governance. In some states, the nation asserts much stronger control over information than is customary in the West. The ability of corporations operating in those jurisdictions to engage in fully robust human rights due diligence may be affected. At a minimum, it will suggest substantial sensitivity in implementing such systems. In China, for example, the harvesting of information and its internal use may be a matter of indifference to the state, but the dissemination of that information to people outside the corporation may violate the Chinese State Secrets Law. Thus, it has been suggested by Human Rights in China, an NGO critical of the State Secrets Law outside of China that by "classifying information as diverse as the total number of laid off workers in state owned enterprises; statistics on unusual deaths in prisons, juvenile detention facilities and re-education through labor facilities; guiding principles for making contact with overseas religious organizations; data on water and solid waste pollution in large and medium sized cities, the state secrets system controls the very information necessary for citizens and policy makers to effectively address the issues challenging China." Human Rights in China, A Report on Human Rights in China. See generally Human Rights in China, State Secrets China's Legal Labyrinth (2007) (pdf).
The second deals with the conformity of state owned enterprises within the Second Pillar generally, and to the production of human rights due diligence specifically. This issue is part of a larger one--whether SOEs are to be understood and operated as private entities owned by the state, or as instrumentalities of the state operating in private form. If the former, then SOEs ought to conform to Second Pillar requirements like other entitles. If the latter then the issue becomes more complicated. On the one hand, all commercial enterprises ought to conform to a single set of requirements, including the Second Pillar responsibility to respect. On the other hand, if SOEs are better understood as commercially oriented instrumentalities of the state, then a state might be tempted to argue that its SOEs may only conform to Second Pillar norms only to the extent they reflect positive state policy. In particular, SOEs would not be responsible for complying with those portions of human rights applicable to corporations under the Second Pillar if the state SOE owner has rejected any of the sources. Thus, for example, both China and Mexico have placed reservations on their obligation to respect labor rights pursuant to the U.N. Covenant on Economic, Social and Cultural Rights (art. 8 to be interpreted in conformity with their respective constitutions). On that basis, aMexican or Chinese SOE might determine that its Second Pillar obligations to respect are limited specifically to the scope of the state's First Pillar duty to protect.
There are two additional points of linkage between the First Pillar state duty and the Second Pillar Responsibility to respect that is worth considering in the context of grievance mechanisms in human rights due diligence. The first deals with state regulation of information. In some large states, the gathering and dissemination of information is not a matter of internal private governance. In some states, the nation asserts much stronger control over information than is customary in the West. The ability of corporations operating in those jurisdictions to engage in fully robust human rights due diligence may be affected. At a minimum, it will suggest substantial sensitivity in implementing such systems. In China, for example, the harvesting of information and its internal use may be a matter of indifference to the state, but the dissemination of that information to people outside the corporation may violate the Chinese State Secrets Law. Thus, it has been suggested by Human Rights in China, an NGO critical of the State Secrets Law outside of China that by "classifying information as diverse as the total number of laid off workers in state owned enterprises; statistics on unusual deaths in prisons, juvenile detention facilities and re-education through labor facilities; guiding principles for making contact with overseas religious organizations; data on water and solid waste pollution in large and medium sized cities, the state secrets system controls the very information necessary for citizens and policy makers to effectively address the issues challenging China." Human Rights in China, A Report on Human Rights in China. See generally Human Rights in China, State Secrets China's Legal Labyrinth (2007) (pdf).
The second deals with the conformity of state owned enterprises within the Second Pillar generally, and to the production of human rights due diligence specifically. This issue is part of a larger one--whether SOEs are to be understood and operated as private entities owned by the state, or as instrumentalities of the state operating in private form. If the former, then SOEs ought to conform to Second Pillar requirements like other entitles. If the latter then the issue becomes more complicated. On the one hand, all commercial enterprises ought to conform to a single set of requirements, including the Second Pillar responsibility to respect. On the other hand, if SOEs are better understood as commercially oriented instrumentalities of the state, then a state might be tempted to argue that its SOEs may only conform to Second Pillar norms only to the extent they reflect positive state policy. In particular, SOEs would not be responsible for complying with those portions of human rights applicable to corporations under the Second Pillar if the state SOE owner has rejected any of the sources. Thus, for example, both China and Mexico have placed reservations on their obligation to respect labor rights pursuant to the U.N. Covenant on Economic, Social and Cultural Rights (art. 8 to be interpreted in conformity with their respective constitutions). On that basis, aMexican or Chinese SOE might determine that its Second Pillar obligations to respect are limited specifically to the scope of the state's First Pillar duty to protect.
Third Pillar (remedies) linkages are suggested by the connection between the information harvesting objectives of human rights due diligence and the use to which that information is put. Yet information harvesting solely for internal assessment, without disclosure, reduces the value of human rights due diligence in a way at odds with the pattern of information gathering and distribution at the hearty of most systems of disclosure under the securities laws of states. Disclosure suggests the nature of the linkage between the responsibility to respect human rights and the obligation to provide effective remedies. The scope of that disclosure obligation suggests the ways in which management of information dissemination may impact the value of Second Pillar responsibilities. It suggests the need for balancing to maximize the attainment of the core objectives of each Pillar. Linkage here, then, suggests the ways in which designing systems meant to maximize the effectiveness of one Pillar may have a negative impact on the ability to maximize the way of another Pillar. If all information harvested is disclosed, the willingness of a corporation to meet its Second Pillar responsibilities might be adversely affected to the detriment of human rights. If no information is disclosed, then the ability of stakeholders to monitor and enforce human rights obligations and to deal effectively with corporations is substantially undermined.
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