INTERNATIONAL: Human rights/business report divides

Analysis

Professor John Ruggie was appointed Special Representative to the Secretary-General (SRGS) in July 2005, charged with exploring human rights in a corporate context (see INTERNATIONAL: Human rights and business pose dilemmas - November 7, 2005). His interim report, published on March 3, contains numerous open questions and assumptions. These may change during the continuing dialogue and investigations initiated by the SRGS, but the UN is unlikely to receive clear and definitive recommendations by the end of his two-year term. One of the major challenges arising from the report will be clearly balancing 'de lege lata' (what the law is) and 'de lege ferenda' (what the law ought to be).

The report. The SRGS works from the premise that "securing respect for human rights must be a central aim of governance at all levels, from the local to the global, and in the private sector no less than the public". This conclusion lies behind the rationale for his appointment. Moreover, the SRGS interprets the mandate to indicate that it should be primarily evidence-based, automatically shifting the focus from 'what can be done' to 'what has been done'. Evidence in the field does exist:

• It was gathered by the Office of the High Commissioner for Human Rights in its report to the Human Rights Commission when creating the SRGS mandate.
• The Subcommittee for Human Rights, which prepared the UN Norms on the responsibilities of transnational corporations and other business enterprises with regard to human rights (the 'Norms'), also deliberated extensively on the need for increased private sector accountability vis-a-vis human rights.
• Numerous books, articles, reports and case studies on the subject have been published in recent years.

However, the report appears to take the view that further studies are necessary to fulfil the mandate itself.

General conclusions. The SRSG has indicated that, in order to assist firms in preventing human rights abuses, clearer standards and better tools are needed. He has also stated that existing voluntary initiatives are insufficient, as they do not cover corporations deliberately exploiting opportunities to violate human rights and do not adequately cover many areas of human rights.

In the report, the SRSG claims that since no international human rights law, possibly excepting international criminal law, binds corporations, the Norms made a false claim by purporting merely to restate existing human rights principles for business. He hereby distances himself from the very reason for his appointment. He adds that the work of the SRGS has been harmed by the discussions on the Norms, as they have biased stakeholder opinions on human rights and business -- a paradox, since the SRGS would never have been appointed had the Norms not been proposed. Ruggie appears to conclude that it will be impossible to establish common standards for the vast range of business sectors -- and this after limiting the report's scope to transnational corporations only.

From a human rights perspective, the SRGS seems to have overlooked the 1993 Vienna Declaration, in which the vast majority of states concluded that internationally agreed human rights were to be considered universal, and that no new standards were necessary. The challenge was seen to lie with implementing existing standards. In claiming that human rights standards for business do not exist, the SRGS refers to current initiatives and debates as a process of social construction, and claims that constructing legal accountability for corporations may undermine endeavours to hold governments responsible for human rights. By distancing himself from the 'de lege ferenda' part of his mandate, the SRGS is likely to disappoint many observers except those that oppose the proposed mandatory construct of the UN Norms.

Specific challenges. Based on a study of only 65 recent alleged human rights violations, the SRGS draws two conclusions:

• Firstly, the indisputable differences between the human rights dilemmas faced by different sectors should be reflected in public and private sector policy responses dealing with business and human rights.
• Secondly, since there appears to be "a negative symbiosis between the worst corporate-related human rights abuses and host countries that are characterised by a combination of relatively low national income, current or recent conflict exposure, and weak or corrupt governance", this area requires special attention.

By highlighting these two conclusions, the SRGS touches upon two highly contested areas.

• The 'industry diversity' argument was raised by business itself. From the perspective of non-governmental organisations (NGOs), this appears to undermine any hope of creating a common set of internationally binding human rights standards for business; emphasising industry-specific human rights dilemmas will become a protracted exercise in determining the specifics of an industry and its most probable exposures, without resulting in binding standards. This is in contrast to the essence of human rights law, that is, that binding conventions with minimum standards can be established to obligate all states to protect all individuals, no matter how 'diverse' their context. Dismissing the Norms without proposing a route to establish another set of universal standards to which all businesses may be held accountable will generate opposition from a wide range of human rights NGOs.
• The special attention given to human rights and business in relation to developing countries makes a distinction that many actors in the field wish to apply. In the creation of a universal cross-sectoral set of standards, such bias will inevitably alienate the states thereby put in focus.

Common law bias.Ruggie is not a lawyer and receives pro bono help from Harvard Law School and legal resources in the United States, United Kingdom and Australia, guaranteeing substantial common law input into the report. The dynamics of common law are different from civil law systems and may influence the perception of possibilities for regulating business and human rights. An indication of this appears in the report itself: "a large fraction of disputes related to foreign investments nowadays is settled by private arbitration, not national courts. And so corporate law firms and accounting firms add yet additional layers to routine transnational rule making". In civil law systems court decisions are not perceived as 'rule making' as in common law systems. Furthermore, in the few places where international legal principles are included, the narrowest possible interpretation is applied.

Outlook. It is too early to predict the final direction of the recommendations to be presented next year. However, the interim report suggests that the exercise will lead to no substantive changes in the accountability gap that lay behind the UN Norms and the subsequent appointment of the SRGS. There is little doubt that, if the preliminary conclusions prevail, it will become impossible to satisfy NGOs and those businesses that are in favour of a 'level playing field' in relation to human rights (see INTERNATIONAL: Human rights norms good for business - August 27, 2003).