New Paper Posted: "The Guiding Principles of Business and Human Rights at a Crossroads: The State, the Enterprise, and the Spectre of a Treaty to Bind them All"

(Pix (c) Larry Catá Backer 2014)

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Division stalks the global community of business and human rights, which today appears riven by a fundamental difference of ideology. That community, so apparently united behind the U.N. Guiding Principles for Business and Human Rights in 2011, has today been divided into at least two large schismatic communities. The leftist camp, fundamentally formalist, conventionally statist (ironic critique HERE) and traditionalist, would like to see progress toward a governance framework for the management of the human rights affecting behaviors of economic enterprises through the development of a multi-lateral and comprehensive treaty (subject to the usual reservations and the vagaries of transposition into national legal orders) for which the Guiding Principles provided an initial first step.  The rightist camp, fundamentally functionalist, polycentric  and transnational in approach would prefer to work through multiple coordinated and coherent governance structures to produce a comprehensive weaving together of legal and societally constituted governance frameworks under the aegis of the Guiding Principles.

These two ideologically distinct traditions have affected most discussion of enterprise of business and human rights, even within the context of the Guiding Principles tripartite divisions among state duty to protect, corporate responsibility to respect, and joint obligation to provide remedies for interference with human rights. But more importantly, they affect in fundamental ways, the discussion of the most useful approach to moving forward the project of business and human rights. 

I consider some of these issues, especially as they relate to the current battles over the form and primacy of various alternative models for structuring rules for managing the human rights behaviors of enterprises (including states engaging in economic activity) in a new paper just posted  to the Social Science Research Network (SSRN),  The Guiding Principles of Business and Human Rights at a Crossroads: The State, the Enterprise, and the Spectre of a Treaty to Bind them All, the abstract and Introduction of which are provided below  Beyond the the difficulties and traps that might derail the project under the current framework, the paper suggests the possibility of convergence of these two distinct ideological camps--moving toward the articulation of the state duty to protect human rights through a treaty building project that in the aggregate will produce the comprehensive public law approach  sought by leftists, while at the same invigorating the irrepressible project of enterprise societally constituted governance that is at the heart of the corporate responsibility to respect human rights.

The Guiding Principles of Business and Human Rights at a Crossroads: The State, the Enterprise, and the Spectre of a Treaty to Bind them All
Larry Catá Backer

Abstract: This article considers the issues emerging from the front lines of these battlegrounds—all framed by the GPs. It specifically considers three such battleground campaigns: (1) the conceptualization of the state duty to protect human rights through the framing of national action plans, (2) the operationalization of the corporate responsibility to respect human rights through the framing of societally constituted reporting and assessment programs, and (3) the re-invention of the GP project as an expression of two dimensional internationalized state power and its challenge to the GP’s three dimensional project. In Section II, which follows, this article first considers the quite thorny issue of the way states might approach their obligations to protect human rights as elaborated most recently in the GPs. 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 section suggests that these plans, and the approach undertaken by many states to implement the GPs may be misdirected. In Section III, the article turns to a consideration of the equally thorny issue of the way enterprises might approach their obligations to respect human rights under the GPs. To that end it considers the quite promising framework, the Human Rights Reporting and Assurance Frameworks Initiative (RAFI) Project, and the recent efforts of the World Federation of Exchanges’ (WFE) new sustainability working group to consider an Investor Listing Standards Proposal. This section suggests that while both represents an essential advance in the project of providing a usable framework for practicing respect for human rights, though both exhibit deficiencies that point to the weaknesses of the operationalization of the corporate responsibility to respect human rights. Both the NAP framework and the RAFI process can be most usefully understood as mapping projects preliminary to the hard substantive work of constructing rule of law norms in the legal and societal spheres. That foundation becomes critical for the heart of the article’s analysis in Section IV, which considers the return, in a brief and preliminary way, the embrace by the UN Human Rights Council of two related but quite distinct treaty making projects that seek to replace or supplement the GPs with a treaty based system. This effort represents both a culmination of the GP process and an effort to return to the state of things before the GP process started. It poses opportunities and dangers that are explored. The article proposes a way in which the move toward treaty making may be integrated with the GPs state duty to protect prong and the discipline of NAPs and may help to frame interactions with the corporate responsibility. The current efforts to develop a treaty for business and human rights, then, might be most usefully understood and applied in this light—to use the treaty machinery to construct a well-integrated, long term, and ultimately comprehensive rule of law system for business and human rights, binding on all states, which can serve as a means of connection with the development of transnational business behavior norms that fall within the social (non-state) sphere. Together these three efforts suggest the current context of the project of business and human rights, a context in which the role of state, enterprise and international community remains fluid, contingent and undefined. The choices made by each of these critical players will determine the shape of business and human rights governance systems for some time to come.

I. Introduction.

On 16 June 2011, the UN Human Rights Council endorsed[1] Guiding Principles on Business and Human Rights (the “GPs”)[2] for implementing the UN “Protect, Respect and Remedy” Framework.[3] 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.[4] 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.[5] 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.[6]

Since its endorsement, the GPS have become an important standard by which to frame business and human rights discourse, and the values that they represent.[7] This has not always been viewed as a positive development,[8] especially by those who would have preferred a formal treaty mechanism[9] in place of the “soft” law polycentric approach of the GPs.[10] The conventional view among these constituencies is that the GPs, at best, serve as little more than a starting point for the attainment of agendas, usually clothed in the formalities of international law frameworks along traditional lines.[11] As a consequence, from its inception, the GPs have occupied a contentious and dynamic space[12]—at once setting the framework for operationalization of regimes of business and human rights by states and enterprises, and simultaneously posing as either as a gateway or obstacle to the production of international law and national legal regulation of the activities of business enterprises.[13]

This article considers the issues emerging from the front lines of these battlegrounds—all framed by the GPs. It specifically considers three such battleground campaigns: (1) the conceptualization of the state duty to protect human rights through the framing of national action plans, (2) the operationalization of the corporate responsibility to respect human rights through the framing of societally constituted reporting and assessment programs, and (3) the re-invention of the GP project as an expression of two dimensional internationalized state power and its challenge to the GP’s three dimensional project. The first looks to these front line battles in the context of three distinct

In Section II, which follows, this article first considers the quite thorny issue of the way states might approach their obligations to protect human rights as elaborated most recently in the GPs. 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 section 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 section 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 of 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).

In Section III, the article turns to a consideration of the equally thorny issue of the way enterprises might approach their obligations to respect human rights under the GPs. To that end it considers the quite promising framework, the Human Rights Reporting and Assurance Frameworks Initiative (RAFI) Project,[14] and the recent efforts of the World Federation of Exchanges’ (WFE) new sustainability working group to consider an Investor Listing Standards Proposal.[15] The RAFI project represents an effort to provide guidance to companies that may be committed to better demonstrate their alignment with the GPs.[16] The Exchange based sustainability reporting seeks to provide a basis for the routinization of sustainability or ESG (environmental, social and governance) reporting as part of listing requirements for exchanges.[17] This section suggests that while both represents an essential advance in the project of providing a usable framework for practicing respect for human rights, the project remains a work in progress. Some areas that require continued attention. Among the most important are objectives based (neither can be all things to all stakeholders, and the effort to make it so make dissipate its usefulness). As important, to the extent that they seek to be used as a culture-changing project, these cultural components will have to be aligned to corporate interests more directly. Moreover, to the extent either can be understood as a mapping project, its structures may require some fine-tuning. Lastly, operationalization in the societal constitutional sphere always runs the danger of heroic instrumentalization, especially the danger of embracing a heroic approach to human rights reporting. The work of creating cultures of human rights sensitivities as a core basis of corporate culture requires fewer heroes and many more ordinary people who perform their roles in corporate operations without regarding the human rights sensitive portions of their work as "special" or extraordinary" or somehow not an ordinary part of their work. It is to that end that RAFI and Exchange reporting systems might judge its effectiveness as a vehicle for internal discipline and external disclosure. In that context the RAFI framework construct might be usefully understood as a prequel to the harder task of building a rule of law (non-state based) system of rules for the disciplining of business conduct with human rights detrimental effects in the social sphere. Its key value, then, is as a mapping exercise rather than as anything like a due diligence manual. And in that respect, RAFI responds to the same impulse, and ought to respond in the same way, as the Working Group’s construction of sound NAP frameworks, also as self-reflexive mapping projects on which action and governance decisions may be made.

Lastly, Section IV considers the return of a most thorny issue indeed—a return to the ideological multilateral nationalism of the 1970s,[18] a return to the state, and a potential broadening of the schism between states that understand economic, social and cultural rights as a predicate for civil and political rights, and those which are convinced that civil ands political rights are the predicate and framework through which economic, social and political rights may be realized. To that end it considers, in a brief and preliminary way, the embrace by the UN Human Rights Council of two related but quite distinct treaty making projects. One, signaling a victory for the tenacity of Ecuador produced a vote to “establish an open-ended intergovernmental working group on a legally binding instrument on transnational corporations and other business enterprises with respect to human rights, the mandate of which shall be to elaborate an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises.”[19] This is an effort that has been criticized prominently by John Ruggie.[20] The other was adoption of a resolution, sponsored by Norway, sought to move multilateral treaty efforts back within the architecture of the GP.[21] Specifically it directed the U.N. mechanism currently charged with the elaboration of the GPs to prepare a report considering, among other things, the benefits and limitations of legally binding instruments.[22] These efforts have been interpreted by their respective proponents as a natural progression from the 2011 endorsement of the GPs. But each considers the efforts of the other as a rupture in that progression. Treaty proponents view resistance to their efforts as a means of sabotaging the necessary progression to the legal framework for the regulation of corporate conduct that would expose upstream corporate entities to liability well downstream in the supply chain.[23]

The article ends by proposing that the current move toward developing comprehensive treaty instruments for business and human rights may be understood in context and harmonized with the GP process. Fashioning a comprehensive treaty might be most usefully understood and applied as an important movement forward to use the treaty machinery to construct a well-integrated, long term, and ultimately comprehensive rule of law system for business and human rights. Business and human rights treaties can help construct an international rule of law system binding on all states in equal measure, and which can serve as a means of connection with the development of transnational business behavior norms that fall within the social (non-state) sphere. Together, then, these three efforts suggest the possibilities and dangers of the current context of the project of business and human rights, a context in which the role of state, enterprise and international community remains fluid, contingent and undefined. Indeed, the paths taken by international and national stakeholders in the construction of governance systems across these governance frameworks since 2011 suggest both the power of the logic of the GP framework, and its frailty. The choices made by each of these critical players—states, enterprises and international organizations—will determine the shape of business and human rights governance systems for some time to come.

NOTES

[1] The Human Rights Council endorsed the Guiding Principles in its resolution 17/4 of 16 June 2011.

[2] United Nations Office of the High Commissioner, Guiding Principles on Business and Human Rights HR/PUB/11/04 (New York and Geneva, 2011). Available http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf.

[3] The Special Representative annexed the Guiding Principles to his final report to the Human Rights Council (A/HRC/17/31), which also includes an introduction to the Guiding Principles and an overview of the process that led to their development. See, Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, John Ruggie Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework, Human Rights Council, Seventeenth session, Agenda item 3, Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development A/HRC/17/31 (21 March 2011). Available http://www.ohchr.org/Documents/Issues/Business/A-HRC-17-31_AEV.pdf.

[4] Discussed in John G. Ruggie, Just Business: Multinational Corporations and Human Rights (WW Norton, 2013).

[5] John R. Ruggie, Protect, Respect and Remedy: A Framework for Business and Human Rights. Geneva: Human Rights Council, Eighth session, Agenda item 3, UN Doc A/HRC/8/5 (2008).

[6] GP General Principles.

[7] “The Guiding Principles establish an authoritative global standard on the respective roles of businesses and governments in helping ensure that companies respect human rights in their own operations and through their business relationships. . . . The Guiding Principles have played a key role in the development of similar standards by other international and regional organizations, leading to global convergence around the standards they set out.” Developing Guidance on the Corporate Responsibility to Respect Human Rights in the Employment & Recruitment Agencies, Information & Communications Technology, and Oil & Gas Sectors, Instyitutte for Human Rights and Business available http://www.ihrb.org/project/eu-sector-guidance/un-guiding-principles.html.

[8] “The GPs were warmly greeted by business representatives, but less so by the non-governmental organizations (NGOs) and other civil society groups represented in the HRC:” Carlos López, “The Ruggie Process: From Legal Obligations to Corporate Social Responsibility?, in Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect? (Surya Deva and David Bilchitz, eds., Cambridge University Press, 2013) 58-77.

[9] See, e.g., See, "Joint Civil Society Statement on the draft Guiding Principles on Business and Human Rights" [PDF], 14 Jan 2011 available http://www.fidh.org/IMG/pdf/Joint_CSO_Statement_on_GPs.pdf and discussion in David Bilchitz, “A Chasm Between ‘is’ and ‘Ought’? A Critique of the normative foundations of the SRSG’s Framework and the Guiding Principles, in Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect? (Surya Deva and David Bilchitz, eds., Cambridge University Press, 2013) 107-137.

[10] Discussed in Larry Catá Backer, The United Nations’ “Protect, Respect, and Remedy” Human Rights Project: On Operationalizing a Global Framework for the Regulation of Transnational Corporations, 9 Santa Clara J. Int’l Law 9:37 (2011); and Larry Catá Backer, “From Institutional Misalignments to Socially Sustainable Governance: The Guiding Principles for the Implementation of the United Nation’s “Protect, Respect and Remedy” and the Construction of Inter-Systemic Global Governance,” Pacific McGeorge Global Business & Development Law Journal 25(1):69-171 (2012).

[11] See, e.g., discussion in Robert C. Blitt, “Beyond Ruggie’s Guiding Principles on Business and Human Rights: Charting an Embracing Approach to Corporate Human Rights Compliance, Texas International Law Journal 48:33-62 (2012).

[12] Cf. Bryan Horrigan, Corporate Social Responsibility in the 21st Century: Debates, Models and Practices Across Government, Law and Business (Edward Elgar, 2010).

[13] See, e.g., Tagi Sagafi-Nejad, Tagi, The UN and Transnational Corporations: From Code of Conduct to Global Compact (Bloomington and Indianapolis: Indiana University Press (2008)); Mahmood Monshipouri, Claude Emerson Welch, Evan T. Kennedy, Multinational Corporations and the Ethics of Global Responsibility: Problems and Possibilities, Human Rights Quarterly 25(4):965-89 (2003). Issue discussed in Larry Catá Backer, “An Institutional Role for Civil Society within the U.N. Guiding Principles?: Comments on César Rodríguez-Garavito and Tatiana Andia ‘Business and Human Rights: Beyond the End of the Beginning’” (March 11, 2014) paper presented at Conference, Implementing the UN’s Guiding Principles on Business and Human Rights: A South-Initiated North-South Dialogue Brown University, February 20-22, 2014. Available at SSRN: http://ssrn.com/abstract=2407787 or http://dx.doi.org/10.2139/ssrn.2407787.

[14] See, The Business And Human Rights Reporting And Assurance Frameworks Initiative (“RAFI”) Project Framing Document, November 2013

[15] See Ceres, Investor Listing Standards Proposal: Recommendations for Stock Exchange Requirements on Corporate Sustainability Reporting (March 2014). Available http://www.ceres.org/resources/reports/investor-listing-standards-proposal-recommendations-for-stock-exchange-requirements-on-corporate-sustainability-reporting.

[16] RAFI’s developers’ note:

As these dynamics develop, the question arises as to what good reporting on company alignment with the UN Guiding Principles – and good assurance of such reports – should involve. RAFI aims to help answer this question. The proposed reporting and assurance frameworks will be public, meaning that they will be non-proprietary and publicly available to all companies and assurance providers to use in their work. They are intended to be relevant to, and viable for, all companies and auditors/assurance providers in any region, and to dovetail with existing reporting initiatives.

The Business And Human Rights Reporting And Assurance Frameworks Initiative (“RAFI”) Project Framing Document, November 2013, p. 5.

[17] Ceres, Investor Listing Standards Proposal, supra., pp. 8 et seq.

[18] See, Theodore H. Moran. The United Nations and Transnational Corporations: A Review and A Perspective, Transnational Corporations 18(2):91-112 (2009).

[19] Elaboration of an international legally binding instrument on transnational corporations and other business enterprises with respect to human rights, Human Rights Council, Twenty-sixth session, Agenda item 3, Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development, A/HRC/26/L.22/Rev.1 (25 June 2014). The resolution was sponsored by Bolivia, Cuba, Ecuador, South Africa, and Venezuela.

[20] John G. Ruggie, Issues Brief: A UN Business and Human Rights Treaty? (28 Jan. 29014). Available http://business-humanrights.org/sites/default/files/media/documents/ruggie-on-un-business-human-rights-treaty-jan-2014.pdf.

[21] Human Rights and Transnational Corporations and Other Business Enterprises, Human Rights Council, Twenty-sixth session, Agenda item 3, Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development, A/HRC/26/L.1 (23 June 2014).

[22] Id.

[23] “Now is the time to join the chorus of global civil society calling for new strong international law and send the right message that powerful corporations must not violate human rights.” Friends of the Earth Europe calls on EU to stop sabotaging UN action against corporate human rights abuses, Treaty Alliance, 25 June 2014. Available http://treatymovement.com/.