Corporate responsibility for human rights

On 20 January 2010 the UN Special Representative of the Secretary General for Human Rights and Business, John Ruggie, was invited to Berlin to take part in an expert consultation prior to the Federal Ministry for Economic Co-operation and Development's conference "That's Right! - Corporate Responsibility for Human Rights." Together with around 60 other representatives of corporations, governments, and civil society organizations, the ECCHR discussed questions of practical implementation of the conceptual framework "Protect, respect and remedy" developed by John Ruggie to address corporate responsibility. The framework mapped out suggestions for international standards of corporate responsibility with respect to human rights. Before this framework is presented to the United Nations Human Rights Council to be enacted, it will first be reviewed for its practical usability. For this purpose, John Ruggie held further expert consultations worldwide.

The concept "Protect, respect and remedy" states a governmental obligation to protect human rights and to safeguard their compliance; secondly, a corporate responsibility to respect human rights; and finally, the - again governmental - obligation to offer effective remedy when human rights are violated. Ruggie emphasized that the concept of "responsibility" was consciously chosen, in order to distinguish it from "obligation" (duty), as the former is not of a legal nature. In any case it does not have a legal nature yet, since international law can, in the course of time, be developed through practical exercises. According to the concept as developed by Ruggie, corporate responsibility to respect human rights is not only a matter of refraining from doing something. Instead, it refers also to the obligation to carry out certain actions, for example to construct and adhere to mechanisms that analyze, oversee and, if necessary intervene in, the effect of corporate activities on human rights. Such mechanisms would work to prevent or halt human rights abuses. This responsibility extends beyond the corporation itself to consider relationships with subsidiary companies, suppliers, and other stakeholders.

As regards the corporations themselves, they must - either according to voluntary standards or binding regulations - allow themselves to be measured by the criterion that John Ruggie labeled "due diligence." For this purpose, Mark Taylor put forward a model developed by the Norwegian company Statoil, by which the human rights risks would be included at each step of the decision-making process in a given corporation's general risk analysis. Responsible corporate activity requires the observation of all so-called "stakeholder-related risks". These are the risks pertaining to groups of people whose interests are in some form or another affected by the corporation, be they common stakeholders, employees, customers, or neighbors. In the subsequent discussion, experts alluded to the fact that human rights-related risk management often increases costs and thus constitutes a competitive disadvantage, since alternative land must be provided, compensation paid, and/or environmentally friendly technology must be built. The participants of the conference stressed multiple times that a "business case" must be established. By this they referred to the necessity of devising human rights-related risk management which conforms to the basic principles of corporate and economic actions. In contrast, the ECCHR firmly believes that this purely economic approach cannot resolve cases in which the interests of the stakeholders and the corporations irreconcilably collide; for example when the rights of indigenous communities to determine the use of their land are pitted against corporate or governmental plans to mine their natural resources.

From the perspective of the ECCHR, the appraisal was ultimately rather sobering. Despite numerous ideas and projects concerning voluntary corporate responsibility that are to be developed by corporations and other initiatives, there were no plans for the implementation of solid and durable monitoring and evaluation systems on-location. Such systems, in the opinion of the ECCHR, should not be one-sided and partial to the corporation itself, but should rather encourage participation, and be both and devised and used by all parties involved.

Various other representatives of civil organizations criticized the organizers of the consultation for failing to include in the discussion either trade unions or organizations who represent the interests of those people and consumers affected at the production site.

In the course of the one-day expert discussion, the issue of extra-territorial jurisdiction was repeatedly revived: Can or should a court be considered the competent authority when faced with the problem of human rights violations of a domestic corporation abroad? The same question recurs for the state's duty to protect: To what extent should a state control the behavior of a domestic company abroad? Are we dealing here with the "export" of western legal standards, risking the allegations of neocolonialism that many European representatives fear? Or can such a practice be seen, as a Cameroonian participant suggested, as complementing and thus supporting the systems in place in the host country?

ECCHR considers the question of the extra-territorial competence of a corporation's home country to be not purely legal-theoretical, but rather one which must be discussed in the context of actual interests. Thereby it should be taken into account that countries hosting economically powerful transnational corporations are limited both by capacity and inclination to regulate foreign corporations. Host countries are often in need of immediate foreign investments, industries and employment, and do not want to frighten off potential companies. Home countries likewise have an interest in encouraging foreign investment in their companies. This encouragement can and should be bound by terms that compel corporations working abroad to respect human rights.

The ECCHR considers legally transparent, mandatory regulations for corporate responsibility to be essential. Furthermore, codes of conduct should not, due to their voluntary nature, be taken as arbitrary. When this occurs they may in fact betray, or run counter to, their original goal. In order to secure human rights standards within the framework of transnational corporate activity, further steps are necessary both in the legislative enactment procedure and in legal practice. Developments are needed, for example, in the application of law extra-territorially, in the recognition of the standard of care within the actual jurisdiction of a corporation, and in laws concerning the burden of proof.

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