INTERNATIONAL: Human rights norms good for business

Analysis

The UN Sub-Commission on the Promotion and Protection of Human Rights unanimously adopted the "Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights" on August 13, 2003. The final text was published on August 21. Together with the accompanying interpretive commentary, the Norms constitute an authoritative guide to international human rights for business. They bring together a range of obligations drawn from existing international human rights, labour and environmental standards.

The Sub-Commission consists of independent human rights experts and serves as an advisory body to the UN Human Rights Commission. As such, the Norms are not yet politically agreed by the member states of the UN. However, they represent an interpretation of politically agreed norms. The resolution will go to the 53-nation Human Rights Commission for consideration in March 2004. The Norms are not currently binding in themselves, but are expected to form the basis for a binding document in the near future.

Content. The Norms are the result of requests made by the Sub-Commission to the 'Working Group on the Working Methods and Activities of Transnational Corporations' to "contribute to the drafting of relevant norms concerning human rights and transnational corporations (TNCs) and other economic units whose activities have an impact on human rights." The five-person working group, headed by David Weissbrodt, a US academic, drafted them after receiving comments and recommendations from a wide range of stakeholders including governments, non-governmental organisations (NGOs) and business. The Sub-Commission also adopted an accompanying commentary, which provides clarification and references. They set out a number of obligations:

• Businesses shall ensure that their impact does not constitute a violation or work against the realisation of human rights. Such responsibility relates to the full range of human rights, ie civil, political, economic, social and cultural rights. Obligations extend to security of persons, core labour rights, legal compliance, curbing corruption, consumer protection, environmental protection and operations in conflict zones.
• Companies should establish internal structures and contract clauses to ensure compliance, and shall provide reparation to those parties affected by non-compliance.
• States have the primary obligation to respect, protect, fulfil and promote human rights. They shall create the necessary legal and administrative framework to ensure implementation.
• The UN should establish a Norms compliance monitoring unit.

Notably, the Norms overturn two paradigms dominating corporate social responsibility (CSR): that all initiatives should be voluntary, and that 'no one size fits all'. Instead, they assert that minimum responsibilities shall bind businesses across sectors.

Over-reaction. Much of the alarm with which the norms have been greeted in some quarters of the business community and the media is exaggerated. Most of it reflects wariness at the prospect of binding regulation, which is likely to be overseen by an international monitoring unit paired with national enforcement mechanisms. However, governments already have an obligation to regulate to prevent 'private actor' violations of human rights. The Norms are minimum standards already adopted by the International Labour Organisation (ILO) which, owing to its tripartite nature, means they have been agreed by companies, governments and labour unions.

The Norms provide coherence to a disparate set of human rights provisions, with varying levels of corporate obligation (see INTERNATIONAL: Do ethical codes help corporate profits? - January 23, 2003). EU human rights initiatives, the UN Global Compact, the Global Reporting Initiative, the OECD guidelines for Multinational Business, the SA 8000, the Caux Round Table Principles for Business and the Amnesty International Human Rights Principles all refer to or use human rights principles with varying levels of obligation.

Outlook. It is quite likely that the Norms will become binding within a decade or two. It will be necessary for all businesses to raise awareness of human rights and carry the cost of implementing systems to assure compliance. The direction outlined by the Norms offers the convergence needed in a field congested with a plethora of divergent initiatives and codes of conduct. Assuming that the increasing stakeholder pressure on TNCs will not decrease in coming years, the Norms actually offer some advantages:

• They are a comprehensive description of companies' risks in relation to reputation beyond economic conduct. Most existing codes only cover core labour rights.
• They might also enhance the quality of stakeholder relations. Since many NGOs base their work on human rights principles, adopting the Norms enables companies to understand and communicate positions on sensitive issues in the same language.
• Companies that have invested in CSR will probably be better able to reap the benefits of such investment. The Norms will level the playing field and open the comparison between companies, thus establishing the basis for competition on better performance.

There might also be some 'positive externalities' from the Norms. The principles expressed in the Norms are conditioned by stable and regulated societies, which in turn are a prerequisite for the successful operation of an enterprise. The Norms thus encourage development of national legal systems under which contracts are honoured, where corruption plays a diminishing role and where foreign companies enjoy equal protection under law.

International law. The Norms arguably mark a major development in international law. By specifically focusing on non-state actors, they challenge the conservative view of international law, which avoids the scrutiny of non-state actors. In truth, such an interpretation has been breaking down for years. ILO statutes and UN resolutions on slavery and piracy all apply to non-state actors.