Putting human rights in the bottom line
August 2008: The Advisory Council of Jurists has recommended steps that national human rights institutions can take to promote human rights standards to business.
The power of transnational corporations (TNCs) to shape the economic, political and social environments in which they operate has never been greater.
Since 2002 the number of TNCs operating around the world has grown from approximately 65,000 to an estimated 78,000 in 2007, with flows of foreign investment into West Asia, South Asia, East Asia and South East Asia currently at record levels.
The investment of such large amounts of capital – estimated last year to be US $12 trillion worldwide – brings with it the capacity to stimulate sustained economic growth in host countries and provide employment opportunities for the local labour market.
The social benefits that flow from economic development were recognised by the former United Nations Secretary General, Kofi Annan, who stated “it is the absence of broad-based business activity – not its presence – that condemns much of humanity to suffering.”
However, the operations of some TNCs have been strongly criticised for their poor record on human rights. Labour standards and occupational health and safety rank high on the list of concerns, as well as the displacement of local and indigenous communities.
These failures to adequately respect human rights standrads can exacerbated when TNCs operate in countries with weak or corrupt governance and limited capacity to develop, implement and enforce relevant laws and regulations.
ACJ Reference
With a rapidly growing number of TNCs now operating in the Asia Pacific region, the APF Forum Council requested its legal advisory body, the Advisory Council of Jurists (ACJ), to consider a reference on ‘Human Rights, Government Responsibility and Business Accountability’ during the recent APF Annual Meeting in Kuala Lumpur.
As part of the reference, the ACJ examined:
- the scope of the State’s obligations in relation to the operations of business
- the obligations of business to respect human rights under existing international law
- corporate complicity in human rights abuses, and
- the role of national human rights institutions to promoting rights observance by business.
The ACJ found that since the 1970s, the United Nations has unsuccessfully attempted to establish binding international rules to govern the activities of TNCs. Instead, there has been a proliferation of soft law initiatives, the most comprehensive being the OECD Guidelines for Multinational Enterprises and the ILO Declaration of Principles for Multinational Enterprises.
There have also been a number of voluntary initiatives by international organisations and corporations that have sought to promote human rights standards into the operations of business. These include the UN Global Compact and industry-specific initiatives dealing with, amongst other things, the use of government and private security forces and project financing.
Preliminary findings
The ACJ concluded that these initiatives do not provide a comprehensive international law framework for imposing relevant human rights obligations on TNCs and that, at best, the Universal Declaration of Human Rights imposes a responsibility on corporations to ‘respect’ human rights.
This corporate responsibility to respect human rights is one of the three principles recently adopted by the UN Special Representative on Human Rights and Transnational Corporations and other Business Enterprises (UNSR-TC).
The principles include the States’ duty to protect against human rights abuses by corporations, the corporations’ obligation to respect human rights, and the provision of effective remedies in situations of where violations occur.
In its report to a plenary session on the final day of the APF Conference, the ACJ said that national human rights institutions could promote corporate respect for human rights by:
- utilising their complaints process to monitor the activities of corporations
- educating corporations about to their human rights obligations
- raising awareness and advising corporations and governments to establish and support dispute resolution processes including mediation
- developing tools and guidelines to assist corporations in the due diligence processes aimed at preventing human rights violations, and
- becoming a point of recourse for complainants of human rights violations and providing information to victims on available remedies.
A number of experts assisted the ACJ in their discussions, including representatives from the Danish Institute of Human Rights and the UNSR-TC. Civil society representatives also met with the jurists and provided invaluable insight into the impact of business on human rights defenders.
The ACJ is currently reviewing additional issues raised during their deliberations and at the presentation to the APF Conference. The Final Report and Reference Paper will be available later this year.
