U.N. Special Representative for Business and Human Rights Releases Draft “Guiding Principles”

The U.N. Special Representative for Business and Human Rights, John Ruggie, has released the long-awaited draft of his final report, the Guiding Principles for the Implementation of the United Nations "Protect, Respect and Remedy’" Framework (.pdf).  The Guiding Principles are the culmination of the Special Representative’s mandate, which began in 2005, and which will conclude when the final report is delivered to the U.N. Human Rights Council in June 2011.  The draft is open for public comment until January 31, 2011.

The Guiding Principles build on the Special Representative’s previous reports and are organized around the three-pillar “Protect, Respect and Remedy” policy framework first set forth in his 2008 report (.pdf).  Under this framework:

  • States have a duty to protect against human rights abuses by third parties, including companies;
  • Companies have a responsibility to respect human rights; and
  • Victims of human rights abuses must have access to effective remedies.

As noted by the U.N. Special Representative, this three-pillar policy framework “has already influenced policy development by Government and international institutions, business policies and practices, as well as the analytical and advocacy work of trade unions and civil society organizations.”  Through the Principles, the Special Representative has not created “new international legal obligations,” but rather has elaborated “the implications of existing standards and practices for States and business” and integrated them around a comprehensive framework.

There are 29 principles in all, each with detailed commentary.  Corporate leaders, and their stakeholders, should not limit their attention to the 11 principles specific to the “corporate responsibility to protect” pillar of the Special Representative’s policy framework.  All of the principles have important implications for the business community.  In future posts, we will provide a deeper analysis of several specific elements of the Guiding Principles.  In the text below, we provide an overview of key points, as well as questions, raised by the draft report.

The State Duty to Protect Human Rights

The State duty to protect is part of international law. The Special Representative clarifies that the State duty to protect against business-related human rights requires States to:

  • Take appropriate steps to prevent, investigate, punish, and redress business-related human rights abuses within their territories or jurisdictions through effective policies, regulation, and adjudication.

The Special Representative adds that States should:

  • Encourage businesses domiciled in their jurisdictions to respect human rights abroad;
  • Address the roles of such businesses in conflict zones; and
  • Maintain their ability to meet their human rights obligations when they negotiate investment treaties and contracts.

The Guiding Principles also suggest that governments should encourage businesses domiciled in their jurisdictions to respect human rights abroad, and should address the roles of such businesses in conflict zones.

The Corporate Responsibility to Respect Human Rights

The corporate responsibility to respect human rights means to avoid infringing on the human rights of others, and to address adverse human rights impacts.  These human rights refer to, at a minimum, the International Bill of Human Rights (which encompasses the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the International Covenant on Economic, Social, and Cultural Rights) and the eight core conventions of the International Labor Organization.  This responsibility applies across a company’s business activities, as well as through its relationships with third parties, such as suppliers, business partners, or host governments. It also applies to all enterprises, regardless of their size or ownership structure.

The Special Representative states that companies should ensure that they are respecting human rights by integrating human rights into their management systems.  Steps that companies should take include:

  • Establishing policy commitments to human rights; and
  • Conducting human rights due diligence, which includes:
    • Assessing actual and potential human rights impacts;
    • Acting upon the findings;
    • And tracking and communicating performance, for example through audit systems.

The practical implication of these Principles is that companies should integrate human rights into their management systems, from performance incentives to procurement practices.

Also notable is the Principles’ creation of heightened expectations regarding consulting and communicating with external stakeholders.  For instance, the Principles suggest that simply engaging within the company to conduct human rights due diligence is likely not sufficient.  Rather, the report’s commentary indicates that the process of identifying risk should involve meaningful engagement with potentially affected groups and other stakeholders.  Furthermore, companies with significant human rights risks should report regularly, presumably publicly, on their performance, although the Guiding Principles do not specify what forms such reporting should take.

Access to Remedy

One of the three “foundational principles” set forth in the draft report is the duty of States to ensure that victims of human rights abuses have access to effective judicial and non-judicial remedies.  The Principles also recognize the importance of “non-state- based grievance mechanisms” and call on companies to:

  • Establish or participate in operational-level grievance mechanisms in order to provide access to remedy.

Such mechanisms should be legitimate, accessible, predictable, equitable, rights-compatible, transparent, and based on dialogue and engagement.  The commentary notes that such grievance mechanisms support corporate efforts to track human rights issues, and enable disputes to be resolved early, before they escalate.

Implications for Companies

The Guiding Principles are not binding, nor is the corporate responsibility to respect human rights – thus the use of the less legalistic term “responsibility” rather than “duty.”  Nevertheless, businesses should be aware that if the U.N. Special Representative’s Guiding Principles gain substantial government support, they may develop into international legal standards over time.

The U.N. Special Representative’s framework also is likely to influence the policies and laws of States and multilateral institutions.  For instance, the OECD has cited to his framework (.pdf) in its Terms of Reference for the ongoing revision of its Guidelines for Multinational Enterprises.  A number of countries (.pdf), ranging from the United Kingdom to South Africa, have recently cited the framework in undertaking their own policy assessments.  In the future, national courts may look to the framework as a standard of reasonable care in tort law and other cases.  Moreover, corporate stakeholders, including investors, are likely to use these Guiding Principles as a point of reference in their dialogues with companies.

Although the U.N. Special Representative’s draft Guiding Principles provide greater detail and more guidance than his previous reports, many questions remain.  As the U.N. Special Representative recognizes in his report, exactly what human rights due diligence looks like will depend on the size of the business enterprise, the severity of its human rights risks, and the context of its operations.  In addition, the precise manner in which human rights due diligence is implemented will depend on organizational structure and company culture.  Therefore, although the Principles provide helpful general guidance, each business will need to tailor the Principles to fit its own structure and risk profile.

The Principles do make clear that companies will increasingly face pressure to:

  • Conduct human rights risk and impact assessments throughout the course of their activities, and to engage with external stakeholders in the process;
  • Integrate human rights concerns into their management systems across the full extent of their business operations;
  • Evaluate and address the human rights risks posed by business partners; and
  • Establish effective operational-level grievance mechanisms.

Furthermore, businesses will be expected to communicate their efforts to external stakeholders. Simply having human rights policies in place will no longer suffice.  Rather, companies will be expected to show how their human rights commitments are being implemented.

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