Tuesday, July 11, 2017

John Ruggie and John Sherman Respond to Jonathan Bonnitcha and Robert McCorquodale, "Is the Concept of ‘Due Diligence’ in the Guiding Principles Coherent?"

(Pix © Larry Catña Backer 2017)

The role of human rights due diligence is central to the understanding of the societal responsibilities of enterprises under the Second Pillar of the UN Guiding Principles for Business and Human Rights. In Is the Concept of ‘Due Diligence’ in the Guiding Principles Coherent?, Jonathan Bonnitcha and Robert McCorquodale, human rights due diligence simultaneously and incoherently refer to (1) a set of processes used by businesses to identify and manage risks and (2) a standard of conduct expected of an actor in order to discharge a responsibility, obligation or duty. This, they argue, suggests that the UNGP imposes a strict responsibility on business enterprises to avoid causing adverse human rights impacts, but imposes a lesser due diligence standard of conduct to prevent adverse human rights impacts caused by third parties with which the enterprise has business relationships.

Recently John Ruggie and John Sherman has responded to this argument in The Concept of ‘Due Diligence’ in the UN Guiding Principles on Business and Human Rights: Reply to Professors Bonnitcha and Mccorquodale, which will appear in a future issue of the European Journal of International Law. Ruggie and Sherman suggest that "none of these interpretations [put forward by Bonnitcha and McCorquidale] is aligned with the UNGPs, and they fall well short of the UNGPs’ own scope conditions of enterprises’ responsibility to respect human rights and provide for or contribute to remedy."

Both article and response are well worth reading. They suggest the development of a vibrant interpretive community around the UNGP, one in which the UNGP themselves serve as the definitive and legitimate source of framing the context in which the regulatory management of the human rights responsibilities of enterprises and the human rights duties of states may be understood and elaborated. This post briefly considers some of the arguments of the rich analysis of Bonnitcha and McCorquidale through the lens of Ruggie and Sherman's sophisticated and nuanced response. 
(Pix © Larry Catá Backer 2017)

A reading of the two articles suggests the continuing richness of the debate about the UNGP in the evolving context of managing behaviors in global production. Some of the points that especially struck me on a first reading:

1. I would agree with Ruggie and Sherman that human rights due diligence is not at the heart of the UNGP.  HRDD is a critical methodology for operationalizing the 2nd Pillar corporate responsibility--that is, it is a means through which enterprises might embed their responsibilities in the operations.  Due diligence, of course, is an essential component of all of the Pillars, but they manifest differently within the complex of duties that makeup the state duty to protect, and are expressed quite differently with respect to the remedial rights of Pillar 3.

2. It is those distinctions between the legal frameworks of Pillar I (and to some extent Pillar 3) and the societal expression of managerial responsibility in Pillar 2 that much of the disagreement between these scholars lies. Bonnitcha and McCorquidale are of course correct in their analysis of due diligence within the construction of legal systems. Yet Ruggie and Sherman are quite correct to note that Pillar 2 is grounded in societal responsibility rather than in legal constructs.  That difference is important.  In its societal manifestation, HRDD doe snot necessarily share the characteristics, nor the constraints, of due diligence as a methodology (and  as a normative expression) of law. But this difference also suggests something more profound--the extent to which the scholars differ on their sense of the importance of law as a totalizing ordering principle for the management of human and institutional relationships. Ruggie and Sherman argue that "the transposition of a state-based legal concept onto the corporate responsibility to respect human rights under the UNGPs is fundamentally inappropriate." (draft pp. 4).  And yet, Bonnitcha and McCorquidale are correct to suggest that within state law systems and especially within the governance matrices of domestic legal orders, the legal basis of HRDD is important and cannot be ignored.  Yet that importance does not transform the legal construction of HRDD into a legally cognizable universalizing character that can have mandatory effect outside the domestic legal orders of states (and of the 1st Pillar itself). 

3. Given that distinction between the societal and legal realms of law-governance, it follows that Ruggie and Sherman would correctly be suspicious of any proposal that would conflate the law-state and societal orders into a singular aggregation in which law triumphs beyond its jurisdiction. In some respect, of course, Bonnitcha and McCorquidale articulate and apply a set pr premises that have powerful advocates within the global academy and in many quaters of public organizations (and states). That view tends to organize the global order around states and through the language of law. It makes perfect sense, then, that just as the current efforts toward a comprehensive treaty on business and human rights would view societal governance with suspicion as unaccountable and illegitimate, so might one view the legitimacy of a HRDD system (and its normative overtones) as grounded in law.  That conservative view, in part, largely ignores the work of Professor Ruggie as SRSG and the repeated emphasis in his reports through 2011, on the autonomy and importance of both legal and societal spheres.  The former was bound up with the state, with law, and in the "state duty" pillar.  The later was bound up with the enterprise (and with non governmental organizations), with governance, and with the "corporate responsibility" pillar of the UNGP. These were separated for a reason.  And all efforts to rejoin them under the banner of politics and the state have at their core the rejection of the fundamental organizing premises on which the UNGP are built. Not that these alternative visions are "wrong"--just that they do not reflect the object of their interpretation; they seek to read into the UNGP expectations and sensibilities that were themselves rejected in the very construction of the UNGP.  For that reason alone the great insight of Bonnitcha and McCorquidale, whose vision is plausible if not compatible with the UNGP, is that in order to effectuate the interpretive framework they suggest a comprehensive treaty is necessary.  In other words, theirs is not so much an interpretive project as a normative one, one for which the mechanics of (international) law will be necessary.

4.  Bonnitcha and McCorquidale's construction of a two part liability standard built around the HRDD obligation is quite interesting and worth considering in detail.  It is, in its own way, respectful of the principles of asset partitioning at the heart of the legal distinctions between enterprises in global production chains. In a sense, their notions have been taken up by the French Supply Chain Due Diligence Law. And, as a matter of constructing legal standards around due diligence, it has much in its favor. To that extent, Bonnitcha and McCorquidale have provided a powerful argument for the basis of legal regulation through and in due diligence.  Yet, Ruggie and Sherman are right to argue that as a societal standard within the 2nd Pillar, the distinction has less power. They advance a more nuanced and pragmatic approach, consistent with the ethos of societal governance and point to the way this is supported by their interpretation of the UNGP and its commentary. 

5. This is not to suggest that Bonnitcha and McCorquidale ignore the differences between the business sense of due diligence and that of states, that is the difference between the methodologies of meeting enterprise responsibility and the standards to which states are bound in meeting their duties. Where the differences between Bonnitcha and McCorquidale on the one hand, and Ruggie and Sherman on the other, appear to be acute, is in the relationship between  state and enterprise, or better put, between law and governance. One would appear to conflate enterprises within the state, the other recognizes regulatory spaces beyond the state.  The recognition of an autonomous place for such societal governance suggests that difficulty of assuming that the structures of societal governance can be folded into and arranged according to the conventional logic that animates the domestic legal orders of states.

6. Put in the language of the language of the papers, Bonnitcha and McCorquidale are perfectly correct to suggest that HRDD can be read, in a legal context, as constituting both methodology and standard. Under law, enterprises may incur liability for failures either to employ HRDD or to employ it correctly (and in this later guise the legal standard for the quantum and character of effort the law requires). Here is the strongest case for the Bonita and McCorquidale argument--that HRDD may be incorporated by states into their domestic legal orders as both a normative and process standard, and that, within the logic of the legal systems within which it can be thus embedded, to distinguish (in law) between direct enterprise action with respect to which a strict responsibility could be imposed, but impose a lesser standard with respect to human rights impacts caused by third parties with which the enterprise has business relationships. As a consequence legal coherence is achieved through the imposition of HRDD as a mandatory methodology with differing substantive obligations to act on the basis of what HRDD reveals.

7.  Ruggie and Sherman are also perfectly correct to point out the Bonita and McCorquidale argument itself is at odds with the fundamental ordering premises of the UNGP.  In the best light, Bonita and McCorquidale make an effective argument for the legalization of the UNGP 2nd Pillar within the normative context of the duty of states to protect human rights.  That is a perfectly respectable effort that has been urged by many. But the 2nd Pillar is not merely a set of norms and processes waiting to be legalized.  The corporate responsibility exists within a context that is marked by its own normative standards and its own logic.  It is not necessarily disciplined by or through states, but it still embraces a regulatory order of its own. That is Ruggie and Sherman's most important point. 

8.  Indeed, in the end, it is the analogy to international law--that great stretch that marks many recent efforts to "legalize" the 2nd Pillar and the corporate responsibility to respect human rights--that do not work compatibly with the fundamental logic of the UNGP. The UNGP quite clearly rejects the identity of 1st and 2nd Pillars.  That distinction has consequences--and these consequences can be great, indeed.  The 2nd Pillar corporate responsibility produces a baseline normative standard--the international bill of human rights.  The 1st Pillar applies the logic of international law and the global public order by recognizing that as among states there is no baseline normative standard as binding law (even international law). The 1st Pillar speaks to legal relationships, to politics, and policy. It recognizes the formalities and limitations of political structures expressed as law.  The 2nd Pillar speaks to economic relationships and risk. It recognizes the pragmatic functionalism and limitations of economic structures expressed through risk.

9.  Perhaps the best way to understand the quite distinct conceptual starting points of both sets of authors, one might remember that for Bonnitcha and McCorquidale "The corporate responsibility to respect human rights could not be implemented in law, or remedies made available, without clarification of the standard of conduct required to discharge that responsibility. "  On the other hand, for Ruggie and Sherman, "Due diligence is how risks and impacts are identified and mitigated . And remedy is commensurate with and proportional to the nature of the company’s involvement with the risk or impact." There is a wide conceptual gulf that separates these approaches, one that unlikely to be overcome in the current context of the discourse of business and human rights.   

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