Five on Friday – Five Recent Developments that We’ve Been Watching Closely

iStock_000011057325XSmallIt’s Friday and time for another overview of developments in the field of business and human rights that we’ve been monitoring.

This week’s post includes: the formal withdrawal of the United States from the EITI; the passage of the Canadian Magnitsky Act; and the launch of the Investor Alliance for Human Rights.

  • On November 2, the Government of the United States formally withdrew from the Extractive Industries Transparency Initiative (“EITI”). The Director of the U.S. Office for Natural Resource Revenue sent a letter to the EITI Board of Directors which stated that the withdrawal was effective immediately. The EITI Chair issued a statement shortly afterwards, stating that “[t]his is a disappointing, backwards step. The EITI is making important gains in global efforts to address corruption and illicit financial flows. Our work supports efforts to combat transnational crime and terrorist financing. It’s important that resource-rich countries like the United States lead by example. This decision sends the wrong signal.” The United States has been implementing the EITI since 2014, when it became the first G8 country to join the Initiative. Government members of the EITI are required to disclose the payments that oil, gas, and mining companies make to them, and companies operating in those countries publish their payments to the governments.
  • On October 18, the Canadian Parliament formally passed the “Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law).” The law allows Canada to freeze the assets of, and establish visa bans, for officials from Russia and other nations if they are believed to be guilty of gross human rights violations. The law also prohibits Canadian companies from doing business with foreign nationals who are responsible for, or complicit in, gross human rights violations committed against those that have sought to expose illegal government activity or defend and promote internationally recognized human rights and freedoms. Canada’s passage of a “Magnitsky Act” comes after the United States and the United Kingdom passed similar legislation.
  • On October 18, the Interfaith Center on Corporate Responsibility announced the launch of a new Investor Alliance for Human Rights. The Alliance is intended to provide a collective action platform for investor advocacy regarding human rights and labor issues. Membership in the Alliance is open to all institutional investors. The Alliance aims to provide capacity for quick mobilization on critical issues, the ability to coordinate and amplify investor efforts, and the opportunity to expand shareholder engagement efforts.
  • On October 16, the United States Supreme Court granted petitions for writs of certiorari in United States v. Microsoft. The U.S. Department of Justice is challenging a July 2016 ruling by the Second Circuit Court of Appeals which held that the Stored Communications Act (“SCA”), part of the broader Electronic Communications Privacy Act (“ECPA”), does not authorize law enforcement authorities to order U.S.-based companies to turn over customer e-mail content that is stored exclusively outside the United States. The case highlights many of the challenges faced by companies using technologies not contemplated at the time that the laws governing access to electronic information were drafted. In a blog post published after the Supreme Court’s announcement, Brad Smith, Microsoft’s President and Chief Legal Officer, urged Congress to reform ECPA, and observed that “the current laws were written for the era of the floppy disk, not the world of the cloud” and that “we believe that people’s privacy rights should be protected by the laws of their own countries and we believe that information stored in the cloud should have the same protections as paper stored in your desk.”
  • In October, the International Finance Corporation (“IFC”) published a Good Practice Note on Managing Contractors’ Environmental and Social Performance. The Note is intended to assist IFC clients in managing the social and environmental performance of their contractors, subcontractors, and other third parties working on IFC-funded projects. The Note includes detailed guidance on both contractor selection and project performance and monitoring. Ultimately, IFC clients are responsible for compliance with the IFC Performance Standards and other applicable requirements, including local laws and regulations, and therefore must ensure that contractors are operating consistently with relevant standards.

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