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| Pix Credit here |
April showers bring may flowers, but what do brainstorm sessions bring? Organizations in the UK have the answer: offended reactions. Cities in both England and Ireland have banned the word “brainstorming” from use at various government agencies, asking their employees instead to use the term “thought showers.” (UK Bans The Word “Brainstorming,” Considered Offensive to Some Epileptics)
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| Surya Deva; pix credit here |
To that end, the in-person only brainstorming roundtable is to focus on a number of questions, some core sample of which include the following:
1. Is a course correction required about the role and purpose of business in society? If so, how should this look like?
2. What changes are needed to the legal architecture concerning corporations such as corporate laws and international investment agreements?
3. How could people have an institutionalised say in corporate decisions making processes?
4. Are certain business models or business practices inherently problematic for being incompatible with the goal of realising all human rights or ignoring planetary boundaries?
5. Are there any good practice examples of business models that place people and the planet central to how business is run?
Pix credit here
The questions suggest the core of the inquiry, though additional questions may be welcomed in consultation with the secretariat before the start of the session.
What is that core? The key terms define the trajectories of discussion: (1) course correction for business purpose; (2) changes in legal architecture for corporate law and investment treaties; (3) changing architecture of institutionalized say in corporate decision making; (4) identifying a range of organizational and practice taboos around the concept of forbidden private practices in business activity around principles of human rights/sustainability incompatibility and inherent problematics; and the (5) modelling the ideal organization and operation of economic activity within institutions that aggregate productive forces. All of this makes perfect sense within the rationalized environment in which the discussion is to take place--
(a) one identifies a problem, business purpose, the core premise adherence to which is a necessary predicate for the discussion that follows;
(b) one identifies the key current institutional forms, in this case law (broadly understood), that may be utilized toward the realization of the core premise (change business purpose);
(c) one then identifies institutional transformations that might ensure the longevity of deployments of law toward definitively changing the permissible scope of business purpose, in this case de-centering investors (shareholders) to be replaced by stakeholders (the scope of the definition of which is a key subject of discussion);
(d) in the manner of dialectical intersubjectivity, one then advances and refines the normative baselines as a consequence of the effects of realizing the objectives , in this case further advancing the normative development of human rights and sustainability principles in the forms of refinements of law and administrative supervision;
(e) and finally, in the course of this interactive process (premise/objective to implementation tool to institutional transformation to further development of normative premise--the fundamental process of normative intersubjectivity in human rights and sustainability) a disciplinary process grounded in iterative mimesis, in this case the development of toolkits and examples that serve both to guide actors toward compliance with new mandatory behaviors and to provide a basis for developing systems of accountability.
The questions, then, are not focused on the core fundamental issues--should business purpose focus on development/innovation/production through private law rather than public policy (e-g-. Brief Thoughts on Martin Lipton: "ESG, Stakeholder Governance, and the Duty of the Corporation" (Harvard Law School Forum on Corporate Governance); to what extent is the premise of administrative supervision either a wise one (as norm or as applied) or one that complements the ideology of liberal democracy (e.g.,New From Shift: "Aligning the EU Due Diligence Directive with the International Standards: Key Issues in the Negotiations"); should private markets (and private production decision making) be abandoned in favor of a greater role for public authorities to guide macro-markets decision making (e.g., 对各类市场主体一视同仁 ["Treat All Market Players Equally"]: Developing the Formal Legal Framework for Markets-Based Activities in China) or perhaps better put, should privatized bottom up authority for economic production be abandoned or narrowed in favor of public institutional central planning (on the basis either of behavior norms, eg human rights/sustainability) or some other set of objectives, eg the development of social forces tp move toward the establishment of a communist society;Hold High the Banner of Anti-Globocolonization: "Que las ventajas de la globalización funcionen para las grandes mayorías de todos los países" ["May the advantages of globalization work for the vast majority of all countries"] Remarks by Miguel Mario Díaz-Canel Bermúdez, 1st Secretary of the Communist Party of Cuba (17 November 2023).
Given the unsettled nature of many of the underlying core premises of
economic production, the state, and globalization, within a changing
framework of behavior norm expectations, the governmentalization of
private actors and the privatization of states, one can expect, and perhaps anticipate, the broad range of plausible responses but all as a function of the guiding premises on which they are based. But that is not the object of the consultation or the questions generated around it. And thus some key core issues appear to emerge:
(1) should private markets, and with it, the core presumption of private gain with positive public collateral aggregate effects, be abandoned? More to the point, perhaps, should markets be understood as a complement to state authority--that is, as merely another means by which public policy may be translated into state directed action; or might markets continue to provide their own direction?
(2) if private markets-driven economic activity is to be retained in some form, to what extent should the capital aggregating institution of economic activity be reformed to fair more robust direction by groups of actors other than investors--or put differently, should economic enterprises be subject to a democratic constitutional law of market actors?;
(3) if a larger regulatory space is to be created for public oversight of economic activity--including the scope, shape, and forms of economic production as well as favored or disfavored production, then what are to be its forms--classical mechanics of central planning; broad administrative supervision of every aspect of production but with private implementation mechanics; narrow administrative supervision focused on norms (human rights/sustainability) or norms and production ("just transitions" broadly understood);
(4) what may be the consequences of advancing broad theories of administrative supervision with respect to the laws of state owned enterprises; compensation for constructive nationalization; power to block foreign control; and the like;
(5) to what extent ought states to be stripped of a power to develop and apply macro-norms (development, climate change, just transitions, the extent of non-taboo markets); or where some national discretion is to be permitted, what would be the limits of national interpretive power;
(6) what is the role of transnational norm institutions, particularly religion and cultural institutions, to opt out of these systems at the national or international levels;More generally, to what extent are national conditions to be a factor in the interpretation and application of the normative baseline premises of state supervision constituted, at their highest level of generality, within the sphere of international law/norm making?
(7) what role if any for risk taking and innovation--traditionally economic capital aggregation was grounded on a distinctive core premise, to encourage risk taking to enhance innovation through competition and private financial rewards; to the extent this premise is now to be discredited in favor of a more comprehensive application of prevent-mitigate-remedy risk adverse principles, how would innovation be (a) directed and (b) encouraged; and by whom?
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| Pix © Larry Catá Backer; Max Ernst, Celebes (1921) |
Within those premises, central to the guidance provided by the form of the questions, answers become fairly straightforward, with lots of space to quibble around details.
(1) Assuming that "capitalism" is to be discredited as a human rights compatible system of economic organization, and that markets must be viewed as suspicious in the absence of public guidance, then it follows that a "course correction" is both necessary and inevitable. Even if markets are reduced to a complementary instrument of public policy articulated or manifested through the process of the utilization of productive forces in economic activity, that course correction would have to follow the political line of public organization. It ought to be democratic (as that term might be understood in liberal democratic, Marxist-Leninist, or develping states); it ought to focus on the use of economic production to serve the political collective; and it ought to be guided in that respect by a political apparatus established for that purpose. In effect, the idea of corporate purpose must be abandoned in its entirety in favor of a principle of productive responsibility to the political community.
(2) Assuming a "course correction" the legal consequences would be fairly easy to sketch out: (a) elimination of legal personality for economic aggregations; (b) elimination of the principle of asset partitioning (institutional autonomy or veil piercing) in favor of collective responsibility grounded in production chains; (c) institution of a legal principal of agency; that economic enterprises must be understood as an agent of the state; (d) reconsideration of the doctrine of sovereign immunity either to eliminate it entirely in the field of economic activity, or to extend sovereign immunity to all economic actors; (e) broadening the power of the state trough its functionaries to intervene in institutional production which are not directly undertaken by the state; (f) instituting systems of approvals and review of economic activity by public officials at the local, state, or national level.
(3) At its limit, the process of democratizing corporate governance would shift the power to appoint members of the board of directors ot the state through its designated administrative apparatus; at its limit the question suggests that the current classification that distinguishes between sate owned enterprises and private enterprises ought to be abandoned in favor of a principle that all economic actors operating in institutional forms are state owned or state directed enterprises. That would require substantial changes in the classical legal architecture of economic regulation.
(4) here the old rules apply but under a new normative regime: states have always had the power to suppress certain forms of business organizations (for example private corporations in Europe in the pre-Modern period); states have always had the authority to suppress markets for certain goods (e.g., opium) or activities (e.g., prostitution). It would be an easy matter--CONCEPTUALLY AT LEAST--to transpose those old practices into the new normative orthodoxies of human rights/sustainability. That is not the problem: the issue is one of interpretation of those norms; application of those norms to specific behaviors and behavior expectations, and disciplinary regimes (what and by whom). It is here that the inherent contradictions of human rights and sustainability--and the inevitable ranking of such rights and objectives will re-produce a politics of operation now shifted from the market to markets in public policy.
(5) practice examples, including mandatory practices, are growing. ESG sensibilities and toolkits provide a god example of practice oriented guidance models that can drive the transformations implied in the earlier questions; so can emerging human rights due diligence schemes mandated at the state level. Of course, the best model--given the core parameters around which the questions are built, would be the idealized state owned or state controlled enterprise.
The background text of the roundtable follows below.
28 November 2023, 9:00am-10:30am
Room XXIII, Palais des Nations, Geneva
(In person event only)
Background
The UN Guiding Principles on Business and Human Rights and other international standards
expect businesses to respect all human rights wherever they operate. Some of these
expectations are increasingly solidifying into binding obligations through mandatory human
rights laws. Businesses are also expected to contribute to the 2030 Agenda for Sustainable
Development. Despite these normative expectations, the world is seriously offtrack to meet the
Sustainable Development Goals (SDGs) by 2030. It is also increasingly becoming clear that
businesses would need to play a more transformative role to overcome global challenges such
as poverty, inequalities, child labour, modern slavery, hunger, affordable housing, biodiversity
loss, climate change, conflicts, corporate capture and shrinking civic space.
In his 2023 report to the UN General Assembly, the Special Rapporteur calls for a fundamental
shift in how businesses operate in society by reorienting the purpose of business, changing
irresponsible business models and going beyond the “do no harm” approach. Only by making
these systemic changes, businesses will be able to make a meaningful contribution not only to
achieving inclusive and sustainable development but also to building a human rights economy.
Building on this 2023 report and other work done by various scholars and civil society
organisations, the Special Rapporteur is starting a new project on “business models for
inclusive and sustainable development”. The project will focus on addressing the root causes
of business-related human rights abuses and structural inequalities or exclusions in society as
well as markets. It will examine whether the current business models are fit for the purpose.
The project will result in developing practical policy briefs unpacking how transformative
business models may look like, highlighting legal and policy changes required, and showcasing
good practices. It is envisaged that several thematic drafting groups will be constituted to take
the project forward.
Discussion questions
This brainstorming roundtable will focus on questions such as the following:
1. Is a course correction required about the role and purpose of business in society? If so,
how should this look like?
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2. What changes are needed to the legal architecture concerning corporations such as
corporate laws and international investment agreements?
3. How could people have an institutionalised say in corporate decisions making
processes?
4. Are certain business models or business practices inherently problematic for being
incompatible with the goal of realising all human rights or ignoring planetary
boundaries?
5. Are there any good practice examples of business models that place people and the
planet central to how business is run?
Registration
Kindly complete the registration form for the roundtable here.
If you need a badge to enter Palais des Nations, please contact Ms Antoanela Pavlova
(antoanela.pavlova@un.org).
Contacts
If you have any questions about this project or would like to receive further updates or
contribute to developing the policy briefs, please contact Ms Antoanela Pavlova, Human Rights
Officer and Ms Namindranasoa NY HAJA supporting the Special Rapporteur mandate at the
Office of the High Commissioner for Human Rights in Geneva (+41 22 917 93 31,
antoanela.pavlova@un.org ; namindranasoa.nyhaja@un.org or hrc-sr-development@un.org).
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