Beyond voluntarism
Developing
international legal accountability for companies in relation to human rights
David Petrasek*
March
2001
The
idea that companies should be concerned about human rights, and that they have
an important role to play in protecting these rights, has gained widespread
acceptance in a short period of time. Over the past few years, there has been a
dramatic increase in the attention devoted to the human rights record of
companies. Yet despite all the interest, little attention has been given to the
question of whether companies are legally
obliged to protect and respect human rights.
Advocacy
groups (and less frequently, companies themselves) might make reference to the
Universal Declaration of Human Rights (or international labour standards) as a
basis for company policy in this area. Only rarely, however, are such standards
cited as establishing clear legal commitments for companies. For the most part,
advocacy groups are basing their work in this area on voluntary commitments,
whether these are company or government-sponsored codes of conduct, multilateral
initiatives like the UN’s Global Compact initiative, or principles put forward
by NGOs themselves.
Of
course, this lack of a focus on law is not a mere oversight. The question of
whether international human rights law can be applied beyond the state to
private actors, like companies, is complex. It is fair to say that there is no
clear agreement among international lawyers (or scholars of international law)
about the extent to which, if at all, this body of law creates legal obligations
on companies. Given this uncertainty, it is natural that the debate and
campaigning has largely by-passed the legal issue.
The
International Council on Human Rights Policy, an independent Geneva-based
applied policy centre, began work last year to examine whether international law
might create legal obligations on companies in relation to human rights. A draft
report** was distributed for comments in January 2001.
What’s
law got to do with it?
Does
the absence of clear legal rules matter? After all, few would deny that
significant progress has already been achieved in getting companies to take
seriously the argument that they should respect human rights. Some would argue
that commitments voluntarily entered into by companies are likely to prove more
effective in changing company behaviour than abstract rules imposed from above.
This will be especially true where reliable means are found to ensure these
commitments are given effect in day-to-day practice.
Moreover,
if there is a role for law surely the primary focus should be on national law.
Governments should be expected to put in place clear rules obliging companies
to, for example, respect freedom of association and non-discrimination. What
added benefit would international law bring? The difficulties in enforcing
international law are well known. Would it not make better sense to strengthen
national law?
In
addition, some would argue that international human rights law should remain
true to its origins. It should be directed at states, not private actors.
Shifting the focus risks letting states off the hook, as it could deflect
attention away from the failures of national institutions – such as courts and
government agencies – which are meant to apply and enforce the law.
A
role for international law
The
short answer is that international law does bring added value to the debate.
Further, it could do so in a manner that complements and strengthens both
voluntary efforts and national regulation.
International
law provides a universal benchmark against which to judge company behaviour. In
the absence of a common minimum standard, there is no objective way to assess
whether any particular code of conduct is adequate. This is particularly true
where voluntary codes are meant to apply across different national
jurisdictions. Similarly, voluntary codes advanced by one set of actors will
always be open to the charge of selectivity – why does the code highlight
children’s rights and not freedom of association? Of course, international
human rights standards are not free of controversy. It is indisputable,
nevertheless, that an overwhelming majority of governments have formally
committed themselves to respect these standards. Additionally, both developed
and developing countries have actively participated in drafting them.
Further,
international law does not take away from the importance of national regulation.
On the contrary, one of the main purposes of international human rights
standards is precisely to set benchmarks for developing national legislation and
its enforcement. Victims of human rights abuses will in almost all cases be
expected to seek redress first in their own national courts. International
enforcement mechanisms usually only kick-in where national efforts have failed
or been found wanting. If there were clearer international legal rules in regard
to companies, it is likely that they would give priority attention to steps that
states (and national institutions) should take to better regulate company
conduct.
In
addition to providing a universal standard against which particular conduct can
be judged, international human rights law also brings the element of accountability
to the debate. If human rights are not to remain abstract and intangible, there
must be systems in place to ensure individuals whose rights have been abused can
seek redress. This in turn implies that there be legal remedies and, further, that those individuals and institutions
which have the duty to protect the right are clearly identified.
If
companies engage in systematic discrimination in the workplace, knowingly work
in a manner that supports repressive state institutions, show little concern for
hazardous production processes that destroy people’s livelihoods (and lives),
or suppress freedom of association, it is of little help to the victims of such
abuses that, in theory, duties to respond lie with the national government.
Of course, individual governments should put in place the legal structure
(laws, courts etc.) that would prevent such abuses, or act quickly against
perpetrators. The fact is, however, that there are real obstacles to effective
action at the national level. Even well intentioned governments may find
resource and other constraints work to the advantage of those companies that are
abusing rights.
Towards
legal accountability
The
draft report argues that international law can play an important role in setting
rules for companies in relation to human rights. The idea that international law
is only meant to regulate the conduct of states is out-dated. The report notes
that, although the present rules create clear legal commitments on companies
only in very few respects, there is a definite trend towards greater legal
accountability. Several “voluntary” or explicitly non-binding guidelines
that are directed at companies and which have been adopted by international
organisations (like the ILO, or OECD) might, over time, begin to have
significant legal effect. The Universal Declaration of Human Rights itself was
originally intended only as a non-binding set of principles.
International
rules requiring companies to respect human rights might develop in two ways.
First, it is already clear that, in certain respects, human rights standards
require states to take action to prevent and punish abuses by private actors.
For example, if a state systematically failed to take any action to prevent
domestic abuse it would be in breach of its international obligations -- even
though state agents had not committed the abuse. One can imagine developing in
further detail the types of action states should take to prevent abuses by
companies, and here the clear thrust would be to strengthen national law and its
enforcement.
It
would also be sensible to explore how international law might create direct
obligations on companies to respect human rights. Existing law does not, for the
most part, create direct and binding obligations on companies. There are,
nevertheless, a number of “soft” international standards (like that adopted
by the OECD) that do speak directly to companies. Though they are of a different
nature than an international treaty, there are international procedures in place
that allow victims or advocates to complain about companies that “breach”
the standard. It is a fair bet that such initiatives are evidence of a trend
towards clear and direct accountability for companies in relation to human
rights.
Threat
or opportunity for companies?
The
common view is that companies would oppose the development of binding
international legal obligations in respect human rights. Voluntary approaches
and self-regulation would appear to offer distinct advantages to companies,
whereas law raises the prospect of (expensive) litigation.
On
the other hand, companies that are genuinely committed to respecting rights
should have nothing to fear from such a development. In fact, it might provide
significant advantages. Where commitments are voluntary, there is always the
possibility that more enlightened companies will lose out to competitors who see
no need for directing resources towards ensuring rights are respected.
Further,
if the commitment of businesses to human rights is more than a passing fashion,
then it is inevitable that sooner or later international law will enter into the
picture. It is in international law that human rights are defined and
elaborated, and this body of law has set a minimum, objective standard against
which the conduct of governments can be assessed. It can play a similar role for
companies.
*Research
Director, International Council on Human Rights Policy
**
Business wrongs and rights: human rights
and the developing international legal obligations of companies. Draft
report available on the Council’s web site in PDF format at http://www.ichrp.org