On 22 April 2010, the Special Representative of the Secretary General on Business and Human Rights, Professor John Ruggie, released his latest progress report: "Business and Human Rights: Further steps toward the operationalization of the "protect, respect and remedy" framework."
It is increasingly recognised by business leaders, corporations and those advising corporations (including lawyers) that corporations must consider human rights impacts in their daily business activities. The work of the Special Representative has been a key feature in these developments. Corporations are now aware that the promotion of successful investments and the avoidance of damaging media reports and law suits are significantly assisted by strong internal human rights policies which ensure compliance with recognised human rights standards – even if there is no legal obligation to do so. As the work of the Special Representative (and other related developments) continues, the importance of incorporating human rights compliance into daily business activities and new business projects is increasingly evident.
In 2008, the Special Representative proposed his tripartite framework of "protect, respect and remedy" emphasising a state's obligation to protect against human rights abuses by private actors; a corporation's responsibility to respect human rights and the importance of effective remedies for victims of human rights abuses. This framework was unanimously welcomed by the Human Rights Council and has been endorsed by many in business, civil society and government. The Special Representative's most recent report is the second interim report of his extended mandate pursuant to which he was requested to "operationalise" that framework. The final report is due in 2011.
The Report's recommendations
In this Report, the Special Representative expands upon each of the three elements in his framework, as follows:
- State duty to protect human rights: The Special Representative has identified five priority areas through which States should strive to achieve greater effectiveness as part of their duty to protect. Importantly for those companies that invest off-shore, the Special Representative recognises the need for robust investor protection measures to be provided through bilateral investment treaties and host government agreements, but suggests that these instruments should also balance bona fide public interest measures, such as human rights. Stabilisation clauses in particular are noted as an area where achieving this balance is crucial to the promotion of human rights protection (for more detail see here). Other measures suggested in the Report include ensuring that business entities that transact with the state are encouraged to respect human rights; fostering a human rights compliant business culture through measures such as director's duties, reporting and sentencing guidelines; providing guidance for corporations operating in conflict-prone zones; and considering whether extraterritorial regulation (whether direct or indirect) would assist in ensuring that corporations do not violate human rights offshore.
- Corporate responsibility to respect human rights: The Report emphasises that corporations have a "responsibility" but not necessarily a legal "obligation" to respect human rights – certainly in international law. Corporations are expected to comply with legal requirements relevant to the protection of human rights, even in states where such laws are not regularly or strictly enforced. Strong internal control systems are indentified as important in managing stake-holder risks that can lead to delay, community unrest, reputational damage and reduced productivity. The Report also highlights the dangers for companies of acting in a manner that may be complicit in human rights abuses by others, noting that very real legal risks may arise from such complicity under both domestic and international criminal law.
As in previous reports, the Special Representative promotes the particular importance of adequate due diligence in relation to company activities and relationships. The sharing of experiences and knowledge in this area is key – the Special Representative sees this step as moving away from a "naming and shaming" scenario to "knowing and showing" (the internalisation of respect for human rights by companies themselves through such due diligence). The Special Representative has developed guidance points to assist in the workability of this framework and stresses the need for transparency, long-term commitment and meaningful engagement to ensure a successful due diligence regime.
- Access to a remedy: A wide range of remedies have been considered by the Special Representative and this Report identifies three categories of remedies: corporate-based remedies; state-based non-judicial remedies; and traditional legal remedies (all of which are seen as complementary). Regarding corporate-based remedies (i.e., remedies offered by companies or industries), the Special Representative notes that such remedies should comply with the following principles: legitimacy; accessibility; predictability; equitability; rights-compatibility; and transparency. It is recommended that such mechanisms operate through dialogue and engagement rather than the company itself acting as adjudicator.
The Special Representative clarifies that his Final Report in 2011 will provide a set of guiding principles for the operationalisation of the framework's distinct yet complementary and interactive elements and processes. The Final Report will also present options and recommendations to the Council regarding possible successor initiatives to the mandate. Finally, this Report notes the importance of ensuring that the current impetus in this policy area is continued and urges the consideration of establishing an advisory and capacity-building function within the United Nations to continue the advisory work that Special Representative and his team are often asked to undertake for companies, states and other organisations.