Sunday, February 07, 2010

Business and Human Rights Part VII--Statement of Policy and Elements of Human Rights Due Diligence

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 forum 
The 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 VII: Human Rights Due Diligence--Elements of Human Rights Due Diligence; Statements of Policy.

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
The Statement of Policy is meant to embody specify the governance approach of the company with respect to its responsibility to respect Human Rights.  It is a document that constitutes one of the governance documents of the corporation, "Corporations should adopt a statement of policy with regard to their responsibility to respect human rights, approved by the board or equivalent. "  United Nations Special Representative of the Secretary-General on Business & Human Rights, Statement of Policy. Its principal purpose id to "describe whatever means a company uses to set and communicate its responsibilities, expectations, and commitments:  Some companies call these statements of principle, or codes of conduct, for example."  Id.

The basic contents of this code of conduct is specified: "For a statement of policy to effectively guide a company towards meeting its responsibility to respect human rights, it should reflect the scope and content of its responsibility; the rights or rights-related issues that are particularly salient for its business (for example on a sectoral basis, e.g. privacy and free expression for the internet and telecommunications sector); and how those issues are managed within the company, including discussion of how the company considers the statement’s applicability to partners and suppliers." Id.  The scope of responsibility refers both to context and complicity.  See, Larry Catá Backer, Business and Human Rights Part III: Foundations--The Scope of the Responsibility to Protect, Law at the End of the Day, Feb. 3, 2010.  The content, refers to that cluster of international norms that define the borders of global behavior expectations relating to the corporate social license to operate.    See, Larry Catá Backer, Business and Human Rights Part IV: Foundations--Content of the Corporate Responsibility to Respect, Law at the End of the Day, Feb. 4, 2010. Lastly, the Statement of Policy must deal with issues of distribution.  A broad distribution is contemplated: "such a statement should be made available to all employees in all relevant languages, and incorporated into all relevant management and employee training." United Nations Special Representative of the Secretary-General on Business & Human Rights, Statement of Policy.
Taken together the Statement of Policy is geared toward three principal objectives.  The first  objective is to articulate the contextually privileged reach of human rights due diligence for the corporation.  The point is to define that cluster of information that the corporation ought to consider relevant to its human rights compliance.  Relevance is a function of two factors.  The first is context--that is, of the relation of human rights concerns to the operations of the entity.   The second is normative framework--that is, the behaviors with human rights significance as a matter of governance norms.  The second objective is to define the range of stakeholders with respect to which information is to be harvested and assessed.  The point is to define the universe of actors with respect to which the corporation is deemed legitimately empowered to direct. That power is either a function of ownership interests (subsidiaries and related entities) or contract relations (suppliers and other entities with whom the corporation has a relationship sufficiently close that it may assert  a position of direction and counsel, or whose actions may be affected through the terns of the contractual relation itself).    The third is to define the group of stakeholders entitled to be informed of the corporation's human rights diligence efforts.  There is a presumption i favor of wide dissemination.
The elaboration of the form of the Statement of Policy suggests two issues worth considering.  The first centers on the character of the Statement of Policy.   On the one hand, there is a sense that the Statement of Policy ought to be understood as a short and focused set of principles to which the corporation will adhere in implementing its responsibility to respect human rights.  That would call for  general statements of objectives and goals against which corporate performance can be assessed.  On the other hand, there is also a sense that the Statement of Policy to be be a working document--that is that it is to specify the procedures and methodologies through which  the goals and objectives of the corporate responsibility to respect will be effectuated.  That calls for a highly detailed statements of procedure, a manual for the harvesting and assessment of data.  Both, of course, are necessary for a corporation to satisfy its responsibility to respect.  But it is not clear that both are required to be part of the same document.   

The second issue focuses on dissemination.  This issue is related to the first.  It seems reasonable, and in accord with general patterns of behavior already well established, for corporations to widely disseminate statements of policy that suggest the principles and objectives underlying a particular policy.  Corporations ought to widely disseminate Statements of Policy understood as focused elaborations of contextualized principles and goals.  However, it is not clear that the more technical sets of procedures for implementing this Statement of Policy ought to be as widely disseminated.  To the extent that such procedures  are intimately connected with the internal control mechanics of a corporations, it would be difficult to defend a policy of disclosure.  The details of internal control may be both proprietary and reveal corporate operations and methods of advantage to competitors.   Yet, to the extent that employees, and other stakeholders have an important role to play in the process of harvesting and assessing information, then it makes sense to widely disseminate the procedures applicable to these individuals, at least to the extent they affect these individuals.  Still, it may also be argued that stakeholders generally affected by corporate operations ought to have both a right to participate in the creation of corporate human rights due diligence processes and to receive copies of all material information related to such due diligence efforts.
Current corporate practice provides some useful insights.  Corporations have created contract based autonomous systems of human rights related due diligence.  In some of those cases, corporations have included civil society actors in the construction of human rights policies.  They have been receptive to monitoring by outside elements of civil society.  They have widely distributed statements of behavior principles and objectives, and have even made some of the monitoring procedures available.  They have extended the reach of these policies to suppliers through  arrangements that are formally private and and traditional contracts, but that are, effectively, governance instruments among private entities.  See, Larry Catá Backer, Multinational Corporations as Objects and Sources of Transnational Regulation. ILSA Journal of International & Comparative Law, Vol. 14, No. 2, 2008. The practice insights from the private sector, then, suggests the acceptability of a broad reach of human rights due diligence, reliance on disclosure and market stakeholders.  It suggests that the most effective form of statement of policy includes both principles and goals and procedures for implementation.  Identification of information to be gathered, and the methods for gathering that information lie at the heart of the implementary aspects of such statements.  But it also suggests the importance of firmly centering the responsibility for fashioning and implementing  the systems described in such statements in the affected corporation. 

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