Friday, October 12, 2018

Thoughts on John Ruggie, ‘Guiding Principles’ for the Business & Human Rights Treaty Negotiations: An Open Letter to the Intergovernmental Working Group"

("Le marchand de colifichets", England 1756-58; Musée Ariana, Geneva; pix © Larry Catá Backer)

At its 26th session, on 26 June 2014, the Human Rights Council adopted resolution 26/9 by which it decided “to establish an open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights, whose mandate 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.”

The fourth session of the open-ended intergovernmental working group will take place from 15-19 October 2018 in Room XX of the Palais des Nations, Geneva. During that session, the Working Group will discuss the zero draft “legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises”, as well as the zero draft optional protocol annexed to the instrument. Many who have worked diligently to see this process through will be in attendance. (Draft Programme of work for the 4th session; A/HRC/RES/WG.16/4/1)

Apparently the IGWG expects that they will be at work on this draft through the end of 2019, as a Fifth Session has already been largely scheduled as well (Draft Programme of work for the 5th session).

Many have had much to say about that Zero Draft. Much of it can be accessed at the Business and Human Rights Resource Centre Website. But by no means all of them (e.g., here, here, here, here, and here) Among the most useful recent comments and helpful advice has been that of John Ruggie, the former Special Representative to the Secretary General and the principal progenitor of the UN Guiding Principles for Business and Human Rights. His Guidance (‘Guiding Principles’ for the Business & Human Rights Treaty Negotiations: An Open Letter to the Intergovernmental Working Group  and my brief comments follow.

1.  With the production of the Zero Draft, all of those responsible can claim a certain degree of victory. 
The small states that have shepherded this project through to the production of something tangible--as unrealistic as it content may be--can claim the greatest share of positive value from the effort.  Ecuador, in particular, emerges a great winner--punching well above its weight within the byzantine status and political structures that constitute the U.N.'s Geneva operations. If the Zero Draft goes nowhere (as is likely), they can claim that they have managed to produce something valuable that was then torpedoed by any of a large cast of opponents.  If the Zero Draft moves forward in some form or other (though from the looks of things there is very very little "play in the joints" for much  revision given the program already scheduled for 2019) the Ecuador can claim an oversize influence int he area which, if it is lucky, it can leverage into something far more valuable to its national interests.  Some might say, though it would be unfortunate if these scandalous rumors were proven true, that among the objects of this enterprise is the goal of securing money from any number of multinational enterprises with which there might have been as certain degree of collusion when that proved advantageous but to which all remedial liability can now be shifted.    
Those who have patiently advanced a deeply held and quite coherent vision for a specific form of approaches to the regulation of transnational macro-economic behaviors and its assignment of risk and liability, can also claim a great victory.  Despite fierce opposition, and within the often byzantine politics of such efforts, they have managed to more or less manage a process in a way that preserved the core of their vision through to a Zero Draft.  Whatever happens next is less important.  The draft might well have been the object.  It will live on forever--much like the Norms before it--providing future generations with inspiration or at least draft language, for future efforts.  But more important--they have managed to do precisely what John Ruggie had done a decade earlier with the UN Guiding Principles--they have managed, to some extent, to center all discussion around the Zero Draft. That in itself, represents a quite significant assertion of power to frame conversations the ramifications of which remain to b fully appreciated.

2. Given the advantages of declaring victory at this point, it might be more politically advantageous for the Zero Draft to serve as the first and LAST version of the work of the IGWG and those who officially and unofficially have been charged with its care and development. But of course, that won't happen. There has been too much time and ego invested for sharp political analysis. And in any case it will not matter. That combination of the personal, the professional, the institutional, and the principled will ensure a long and slow process through which the underlying structures, premises and principal objectives likely will be overwhelmed. And that is a pity. There is much at its core that is appealing ion the principles--if not in the actual language--of the Zero Draft.

3. To move into the details of the Zero Draft might provide an unfortunate opportunity to unmask the somewhat cynical ways in which the core principles that guided the movement toward a Comprehensive Treaty have been betrayed or perverted in the process of producing a draft acceptable to its principal movers. No doubt those lamentable consequences were unintentional. Yet there they are. Small states appear to have sought to protect their own enterprises form an obligation that they are quite happy to impose on external economic actors. Beyond the ironic way in which this process deepens the Neo-colonial relationships between a "responsible" metropolis against (almost always former colonial) subaltern peripheries ought to give one pause.

4. And, indeed, going forward, the most troubling aspect of the Zero Draft is its likely unconscious embrace of hierarchies that deny agency to a large set of actors. Among these are rights holders (disparagingly reduced to the status of "victim"), and and non-metropolitan states that have been cast in the role of dependencies. Stripped of all agency, they are also stripped of responsibility. This re-imposition of feudal status hierarchies (and all for the best of reasons) ought to give even more pause, since the hand that appear to have been responsible are precisely those quite willing to submit to relationships of domination now embedded in transnational legal frameworks. If the principles mean anything, it ought to mean that agency and responsibility must be equally shared. Power relationships might speak to the allocation of risk and liability, but they ought to speak to agency and responsibility.

5. Yet these are all old problems. The Zero Draft makes a set of hard choices between the application of principle that might in the long term recast practices, and the most efficient short term means of attaining a set of specific objectives. That takes courage. And it runs a terrible risk. That risk is augmented to the extent that the Zero Draft purports to do more than it possibly can. It is in its own way a remarkable instrument. But it is also an amalgamation of choices that are sometimes self contradictory, and quite cynically directed toward a set of quite certain aims. All of that can be forgiven--and even applauded. Less praiseworthy would be any attempt to suggest that the Zero Draft is more than that.

6. This last point is perhaps the one best brought out, though quite subtly, in John Ruggie's Advice letter that follows below. He divides his advice in
to four parts.
First, he reminds the drivers of the Zero Draft of the importance of political consensus in adoption.  This reminds people of the notion of the principled pragmatism that drove the UNGP, for which John Ruggie was criticized by many Zero Draft Project supported. And yet, the Zero Draft could as easily be understood as a pragmatist project itself preserving a vision through compromise to further the interests of all of its drivers. But it also reminds the Zero Draft drivers that the choices they made will ensure no consensus among states.  While the "usual suspects" here--the OECD states are likely to be thought of as the principal culprits, it is as likely that by ignoring the sensibilities, politics, and economic principles of Marxist-Leninist actors, principally China, the Zero Draft will likely have built its own tomb.
That is a point emphasized in the second advice, which focuses on consensus among "2nd Pillar" constituencies. But of course that merely reminds readers that the Zero Draft project had never really been a project driven by or with business; its principal drivers--important elements of global civil society, internationally minded academics, and certain clusters of small states, tended to view business as the object rather than as a partner. At least for the production of a draft that would serve as the mandatory basis for negotiation.  Business would be invited in once the deck had been stacked in the draft. That is hardly a formula for securing robust buy in.
Third, John Ruggie reminds the Zero Draft drivers that complexity has consequences.  For many those consequences requires either a move toward new forms of regulatory structures.  In the West these might include regulatory governance mechanisms grounded in markets; in Marxist Leninist States (and to some extent within the societal sphere in the West) it might include a move toward data driven analytics to which consequence producing algorithms would provide appropriate rewards and punishments.   But the Zero Draft is structured as a 20th Century document attempting to deal with the realities of a new era which has passed it by and to which it cannot well align or respond. 
Fourth, John Ruggie reminds the Zero Draft drivers of something respecting which they are fully aware--the temptations and dangers of extra-territoriality in this new era. A generation ago progressive thought  might have viewed extraterritoriality as a vestige of colonialism and empire. Later generations saw in it a short term opportunity to cram down "correct" views through production chains overseen by the "right" courts in the "right" states. Expediency then bred its own theoretics. These haunt us still.   Perhaps there is room for empire in the new era.  Emerging South theorists have begun to consider the value of empire shorn of its historical ties to Europe as a means of managing peoples for some greater good or other. Yet there is irony here as well, for it is likely that those who drive the Zero Draft will be the first to be subsumed within such imperial systems in ways they might not altogether like. But that is a problem for a future generation. 

7. John Ruggie's guidance letter follows:

Kofi Annan surely was right when he stated, in a World Economic Forum speech nearly twenty years ago, that unless the social and environmental pillars of globalization were strengthened, globalization itself would be highly vulnerable – “vulnerable to backlash from all the ‘isms’ of our post-cold war world: protectionism; populism; nationalism; ethnic chauvinism; fanaticism; and terrorism.” A year later, in the same venue, he added: “My friends, the simple fact of the matter is this: if we cannot make globalization work for all, in the end it will work for none.”

Annan began a journey, and I had the honor to walk with him. In 2000 he launched the Global Compact and the Millennium Development Goals; in 2006 the Principles for Responsible Investment. He appointed me Secretary-General’s Special Representative for Business and Human Rights in 2005, under a mandate from the then Human Rights Commission to identify and clarify standards of responsibility and accountability for states and businesses in all regions of the world. That effort ultimately led to the UN Guiding Principles on Business and Human Rights.

When I presented the UNGPs to the Human Rights Council in 2011, I stated that their endorsement by the Council would not mark the end of business and human rights challenges; that it was not even the beginning of the end; but it was the end of the beginning because at last an authoritative foundation would exist.

I also stated that international human rights law, like any other body of law, would need to continue to evolve to reflect new realities. I did not then and do not now see any contradiction between the UNGPs and further international legal developments. But of course I do believe that any treaty proposal that seeks to have a positive impact on real people in challenging contexts should meet certain requirements. I have commented on specific provisions of the current “zero draft” treaty elsewhere.1 With intergovernmental deliberations to begin soon, allow me to suggest here some ‘guiding principles,’ as it were, which I hope might assist the overall process itself.

1. The Human Rights Council endorsed the UNGPs by consensus. This marked the first time that the Council (or Commission before it) adopted official guidance for business and human rights, despite several preceding efforts in this and other UN bodies to do so.

The core sponsors of the resolution recommending endorsement were Argentina, India, Nigeria, Norway, and the Russian Federation. Agreement among them, broad support from key constituencies across business and civil society, and subsequent consensus across the Council’s membership, help explain the widespread influence of the UNGPs. The initiative took six years and involved nearly 50 international consultations.

The UNGPs have been incorporated or otherwise referenced in the policies of governments, intergovernmental organizations, businesses, investors, workers’ organizations, NGOs, sports organizations, and law societies. While much remains to be done, great care must be taken that a treaty text does not lock in standards lower than those embodied in the UNGPs, and that the definition of terms in the treaty are consistent with the same terms used in the UNGPs. Otherwise the treaty risks sowing confusion and disillusionment among those already striving to implement the UNGPs, lowering expectations of those who have yet to step up to their responsibilities, and letting down the rights-holders who depend on today’s momentum being maintained and increased, not diluted or diverted.

2. To succeed in practice, a business and human rights treaty must strive for the same broad base of support that we saw for the UNGPs. This includes both home and host states to companies whose businesses affect people’s human rights. In this regard, the current treaty draft expects much in terms implementation and enforcement of the home countries of multinational corporations. That suggests, thereby, that it is particularly important for those states be part of any consensus.

In this context, it is also worth noting that, on current trends, by 2025 half of the Fortune Global 500 companies will be headquartered in so-called emerging market economies. 120 Chinese companies are already on that list. So today business and human rights can no longer be framed simply as an issue of North vs. South, as it was in the 1970s and early 1980s when the UN Code of Conduct on Transnational Corporations negotiations took place. The global economy has changed foundationally.

3. As a result of vast and complex global supply chains, roughly 80% of global trade today (in terms of gross exports) is linked to the production networks of multinational corporations, with trade in intermediate products greater than all other non-oil traded goods combined.

My iPhone was produced by 785 suppliers in 31 countries. None were Apple subsidiaries, and by current global standards that is a relatively small supply chain. A major consumer products company can have tens of thousands of first- tier suppliers, and through various layers of contractual arrangements procure the products of over one million smallholder farmers around the globe.

One out of seven jobs in the world is estimated to be directly global supply chain related (one out five in G-20 countries). This does not include “informal” and “non-standard” forms of work.

The current treaty draft’s focus on “business activities of a transnational character” neither limits the scope to transnational corporations, nor does it include all business enterprises. Given the scale of global supply chains, how to translate this formula into legal and operational meaning is a mystery. No effective treaty can hinge on a mystery as to the scope of its jurisdiction.

The UNGPs do not draw lines between companies that are part of global supply chains and those that are not. They apply to all enterprises regardless of their size, sector, location, and ownership structure. An effective treaty should do the same or risk creating yet another gap in human rights protection.

4. It is certainly no secret that access to judicial remedy remains the biggest challenge in the global business and human rights space. It is also the most difficult to resolve. States already have the obligation to protect against human rights abuse within their jurisdiction by third parties, including business. No new treaty is needed to reinforce that.

The issue comes down to extra-territorial jurisdiction. There are and will remain deep doctrinal differences among states on this question. Their existence cannot be ignored; but nor are they insurmountable. Indeed, there is one critical step on which I believe states could and should find broad agreement: the provision of greater mutual legal assistance, to remove a range of structural, logistical, and capacity barriers to victims’ access to judicial remedy.

Of course requiring greater mutual legal assistance raises its own challenges: it is costly and labor intensive. Systems could and would quickly become overwhelmed if they tried to address all types of impacts on human rights. Investigative and judicial entities would be more likely to contribute fully to the effort if it focused on cases that involve the most severe human rights abuses, such as crimes against humanity, forced labor, sexual violence, and the worst forms of child labor.

Therefore, in the interest of achieving broad support and ensuring effective implementation, it would be wise to define the jurisdictional scope of the treaty in these terms, as the first step in the international legalization of business and human rights standards.

To conclude, in this brief note I wanted to stress once again that the UNGPs are entirely compatible with further international legal developments. And I wanted to add my thoughts as to what an effective treaty initiative should involve.

The task before the Working Group is immense, and it is important. Success—not on paper but on the ground—demands deep reflection, good will, and a constructive process that searches for consensus in the knowledge that real change requires it.

John G. Ruggie is the Berthold Beitz Professor in Human Rights and International Affairs at Harvard’s Kennedy School of Government and Affiliated Professor in International Legal Studies at Harvard Law. He has served as UN Assistant Secretary-General for Strategic Planning (1997-2001), Special Advisor to the SG for the Global Compact (2001-2005), and SRSG for business and human rights (2005-2011). He has won several awards from law societies for his contributions to the development and practice of international law.

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