Business and Human Rights: States are not off the hook

By Jerome Bellion-Jourdan
Senior Fellow in Residence at the Global Governance Centre
Graduate Institute of International and Development Studies

Synopsis: States are not off the hook in the “Business and Human Rights” agenda:  a key take away of recent events at the United Nations and beyond; a timely reminder of the “smart mix of measures” foreseen by the UN Guiding Principles for States to foster business respect for human rights; a strong call on States to act, along with business, against the background of Kofi Annan’s warning: “if we cannot make globalization work for all, in the end it will work for none.”

Key words: UN Guiding Principles on Business and Human Rights, responsible business conduct, globalization, regulation, negotiation, collective action, Agenda 2030

“Time to act: Governments as catalysts for business respect for human rights”. This was the focus of the 8^th UN Forum on Business and Human Rights which brought together at the Palais des Nations in Geneva some 2,400 participants from governments, business, civil society and other stakeholders from 25 to 27 November 2019. Ahead of the Forum, the UN Working Group on Business and Human Rights published a report to the UN General Assembly on “Policy coherence in government action to protect against business-related human rights abuses”. Contrary to the often-heard perception that “Business and Human Rights” is an agenda only for “business”, the Forum and other recent events came as a clear reminder that the UN Guiding Principles on Business and Human Rights adopted in 2011 by the UN Human Rights Council were developed with 3 pillars: “the State duty to protect”, “the corporate responsibility to respect” and “access to remedy”.

The reminder came also from Prof. John Ruggie, the architect of the UN Guiding Principles on Business and Human Rights when he was Special Representative of the UN Secretary General. In a keynote address on 2 December in Brussels at a conference co-organized by Shift and Finland (as Presidency of the Council of the European Union) bringing back Business and Human Rights on the EU agenda, Prof. Ruggie regretted that “Governments did not seem to understand that pillar 1 was aimed at them” and focussed instead on pillar 2. Under pillar 1, “States should consider a smart mix of measures – national and international, mandatory and voluntary – to foster business respect for human rights”. Prof. Ruggie noted that the “smart mix” had been wrongly “employed to mean voluntary measures” and that the situation is changing with some States and the EU as a whole beginning to put in place mandatory measures. There is probably more to come: the outcome paper of the conference in Brussels suggested that “The fragmented landscape of (existing and envisaged) regulatory measures governing responsible management of supply chains and due diligence has led to the need for further EU-wide initiatives, including regulation on mandatory human rights due diligence”.

Discussions on “voluntary” versus “mandatory” measures have regularly taken place against a backdrop in which “business” is perceived to be opposed to mandatory measures, and more broadly, that business is against State action. The landscape of positions is obviously more complex. Business organizations and individual companies have often made it clear that they expect States globally to implement their existing obligations. There are also increasing calls from individual companies on States to develop further mandatory measures. On 2 December, day 1 of the new European Commission, a group of cocoa companies (Barry Callebaut AG, Mars Wrigley and Mondelēz International) issued a joint call with The VOICE Network, Rainforest Alliance and Fairtrade for an “EU-wide due diligence regulation”, aiming for a draft regulation before the end of 2020. There is a widespread recognition that any new legislation needs to be carefully crafted to be effective, to anticipate the risks of adverse effects and to clearly foresee means of enforcement.

“International legalization is both inevitable and desirable to help level the playing field in a world of global business.”

Beyond the national and regional levels, States are also reminded of the need to look into further legal developments at the international level. From Brussels, Prof. Ruggie recalled his proposal back in 2011 that “governments negotiate a targeted legal instrument addressing business involvement in gross human rights violations, coupled with the need for greater cooperation between states to provide remedy”. This was not acted upon. While recalling his doubts about the “treaty process” initiated in 2014, and the attempt “to shoehorn the entire business and human rights domain into a single, overarching treaty”, Prof. Ruggie stated clearly that “International legalization is both inevitable and desirable to help level the playing field in a world of global business.” In a separate blog, I have presented some of the challenges around the current UN Human Rights Council Intergovernmental Working Group and argued on the need for consensus-building.

Legislation and regulation are only one of the means for States to progress on Business and Human Rights. In her address to the Forum on Business and Human Rights, High Commissioner Bachelet welcomed the growing number of countries that are developing National Action Plans, including, recently, Kenya and Thailand. Much more can also be done by States to use their leverage as economic actors. The UN Guiding Principles provide clear provisions on the “State-business nexus” notably that: “States should take additional steps to protect against human rights abuses by business enterprises that are owned or controlled by the State, or that receive substantial support and services from State agencies (…).” States can encourage or even require human rights due diligence by export credit agencies, official investment insurance or guarantee agencies, development agencies and development finance institutions. These are positive developments, albeit limited.  In Brussels, Mairead Lavery, the CEO of Canada’s Export Credit Agency, Export Development Canada (EDC), shared her vision of a “value driven leadership” and explained how EDC became the first commercial banking institution to release in 2019 a dedicated human rights policy built on the UN Guiding Principles. As a financial institution providing support to companies, EDC states clearly that “Human rights-related risks—as well as environmental, political and economic risks—can compromise their reputations, increase liability and affect their social license to operate.”

Progress on the implementation of the UN Guiding Principles on Business and Human Rights often comes with initiatives involving various stakeholders. While some States have played an important role, there is widespread recognition that more States from across regions could usefully engage. On the margins of the Annual General Assembly of the International Code of Conduct for Private Security Service Providers’ Association (ICoCA) with a tripartite board of directors (governments, industry and civil society organisations), the call was made for more States to become members of this oversight mechanism with three functions: certification, monitoring and handling of complaints. Currently, 7 States (Australia, Canada, Norway, Sweden, Switzerland, the UK and the US) and three international organisations (EU, OSCE, NATO) are members. States and international organisations as clients of private security companies could leverage their contracts to require compliance with the International Code of Conduct or even membership in the Association. Switzerland went a step further by adopting legislation, the Federal Act on Private Security Services, stipulating that all companies must accede to the International Code of Conduct for Private Security Service. This can be seen as a “hardening of soft law”:  while the International Code of Conduct was initially voluntarily designed by companies allowing for a buy-in by the industry, legislation has made it an obligation to accede to it.

The Mega-Sporting Events Platform which led to the Centre for Sport and Human Rights has demonstrated the power of collective action with an alliance of intergovernmental organisations, governments, sports bodies, sponsors, broadcasters, civil society, trade unions, employers’ associations, and national human rights institutions. The testimony of Hakeem al-Arabi at the Sporting Chance Forum hosted by UNOG, ILO and OHCHR in Geneva on 28 November was powerful as he shared his journey of a Bahraini footballer who sought refugee status in Australia and was detained on a visit to Thailand with a risk of being sent back to Bahrain. Collective action was considered as instrumental to secure his release, as it has also contributed to press on other issues such as allowing women access to stadiums in Iran. In this and many other situations, sports bodies have considerable leverage on States and there is progress by some. Since Prof. Ruggie produced his report and recommendations to FIFA in 2016, there has been progress, such as FIFA integrating human rights risk assessment into the 2026 FIFA World Cup bidding process. Yet, much more remains to be done, and also for more sports bodies to embark in this journey. Ultimately, progress will also need to come from States. “States are not off the hook”, stated Mary Harvey, CEO of the Centre for Sport and Human Rights as she introduced a session of the Sporting Chance Forum session with speakers from the African Union, the Council of Europe and the Ibero American Sports Council. In her closing statement, the Centre’s Chair, Mary Robinson, emphasized the need for “government leadership at every level”. Back-to-back with the Forum, Switzerland brought together governments that host major sporting events. The Supreme Committee for Delivery and Legacy (Qatar 2022) and the Organizing Committee of the Tokyo 2020 Olympic Games and Paralympic Games are currently members of the Centre for Sport and Human Rights’ Advisory Council.

“If we cannot make globalization work for all, in the end it will work for none.”

As States were reminded that they are not off the hook on the Business and Human Rights agenda, governments and business were also reminded of the direct connection between this agenda and tackling global issues such as climate change and inequalities.  In her address to the Forum on Business and Human Rights, High Commissioner Bachelet stated that “without businesses and responsible investors, it will be, quite simply, impossible to achieve the promise of the 2030 Agenda.” – a link which comes also clearly in a joint publication by the ILO, OECD and OHCHR on “Responsible business. Key messages from international instruments”. For his part, Prof. Ruggie reiterated that “Business and Human Rights” is about the “social sustainability of globalization” and recalled the warning of former UN Secretary General Kofi Annan: “if we cannot make globalization work for all, in the end it will work for none.”