Professor Ruggie, the UN Special Representative on Business and Human Rights has released his latest report – Report of the UN Special Representative on Business and Human Rights: Further steps towards the operationalization of the “protect, respect, remedy” framework. The 2010 report continues to build on the protect, respect and remedy framework outlined in previous reports by the Special Representative – see previous post on the 2009 Report. The current phase of the Special Representative’s mandate is focussed on operationalising this three-tiered framework. The latest report re-emphasises that the underlying approach to this issue is principled pragmatism which is described as:
“an unflinching commitment to the principle of strengthening the promotion and protection of human rights as it relates to business, coupled with a pragmatic attachment to what works best in creating change where it matters most – in the daily lives of people.” (2010, Report, para. 4)
Thus, a key strategy for the Special Representative seems to be the collection and dissemination of best practice: “the operationalization phase combines research, consultations and practical experimentation” (2010 Report, para. 7)
It follows that much of the 2010 report simply describes the evidence that has been collected by the Special Representative and his team over the past twelve months concerning the challenges and opportunities in relation to business and human rights. To this end, the 2010 report can be seen as a stepping stone towards the final report which will be issued next year. Yet, the latest report does contain a number of interesting indications of what the ultimate guidelines and recommendations produced by the Special Representative may look like.
The 2010 report discusses several aspects of the state duty to protect human rights. First, it considers policies adopted by states which may prevent them from fulfilling their human rights obligations. In particular, the report focusses on the conclusion of bilateral investment treaties and investor-state contracts which may contain obligations which prevent a state from enforcing human rights against companies operating in its territory. The Report notes that many states are currently undertaking reviews of their investment agreements and they are encouraged by the Special Representative to “to ensure that new model BITs combine robust investor protections with adequate allowances for bona fide public interest measures, including human rights, applied in a non-discriminatory manner.” (para. 23) One example is the current review of the US BIT. Yet, whilst there has been discussion of strengthening the labour rights provisions in the US model BIT, it would not seem that the inclusion of human rights clauses has featured significantly in the debate. See report of the Advisory Committee on International Economic Policy on the Review of the US Model BIT. The Norwegian government also proposed innovative human rights provisions in the draft Model BIT which it produced in 2007 but it announced in June 2009 that it was dropping the proposals for reforming its Model BIT due to various concerns expressed by stakeholders – see Investment Treaty News. Indeed, there is considerable controversy about whether or not investment treaties should includes provisions on other areas of social policy at all. At the same time, it is clear that if one compares the exceptions that are available to states under most investment treaties, they are significantly more limited than exceptions available in other areas of international economic law, such as the exceptions in the WTO agreements. This is one area that could be explored by states in reviewing their investment treaty practice. The Special Representative also highlights the need to take human rights into account when concluding individual investment agreements with companies and the report says that the Special Representative is working on possible guidance for states and companies on “responsible contracting.”
As well as encouraging states to ensure that they avoid constraining their human rights policy freedom when they pursue other policy objectives, such as investment promotion, the 2010 report also suggests that states should take action to proactively promote rights-respecting corporate culture to companies operating in or from their territory. Specific mention is made of corporate social responsibility policies, encouraging or requiring companies to report on human rights policies impacts, and specifying directors duties in relation to human rights.
The section of the report on the corporate responsibility to respect human rights re-emphasises many of the key aspects of this responsibility that have been included in previous reports, including carrying out due diligence and human rights impact assessments. Four components of due diligence are described:
“a statement of policy articulating the company’s commitment to respect human rights; periodic assessment of actual and potential human rights impacts of company activities and relationships; integrating these commitments and assessments into internal control and oversight systems; and tracking and reporting performance.” (2010 Report, para. 83)
Whilst recognising that what is required may differ depending on the company and the country in which it is operating, the Special Representative makes clear that his goal is to “provide companies with universally applicable guiding principles for meeting their responsibility to respect human rights, recognizing that the complexity of tools and processes companies employ, will necessarily vary with circumstances.” (2010 Report, para. 82) The Report also stresses that human rights due diligence is different to many other forms of due diligence in that it is an on-going process and it involves active engagement with communities which may require reaching compromises with those affected by the activities of a company. In the end, such universally applicable guiding principle may be quite general in nature and it may be that the most valuable aspect of the Special Representative’s work is in getting support for the concept of due diligence and the sharing of best practice, rather than in producing specific guidelines that can be followed by companies. The Special Representative also makes clear in this report that the carrying out of due diligence alone cannot be a defence to claims of human rights violations. Whilst due diligence may offer evidence that a company took reasonable steps to avoid negative impacts on human rights, it should not completely absolve a company from liability under relevant legal regimes.
In concluding, the 2010 report notes that the creation of the UN framework for business and human rights is only the starting point for improving the human rights impacts of transnational corporations and other business operations. Whilst the final report in 2011 will offer guiding principles for the operationalization of the framework, aimed at both states and companies, it is also important that the issue stays on the international agenda. Thus, the report is adamant that a new home for business and human rights must be found within the UN system once the mandate of the Special Representative expires. The report tentatively suggests that this role could be taken on by Office of the High Commissioner for Human Rights but that more resources may need to be given to that organisation if it is to be successful.