Are Companies Ready to Implement UN Guiding Principles on Business and Human Rights?

The much anticipated Guiding Principles on Business and Human Rights prepared by United Nations Special Representative John Ruggie to implement the UN 'Protect, Respect and Remedy' Framework on business and human rights were released in final form last week. They will be discussed by governments in the UN Human Rights Council at its June session in Geneva.

Leading civil society organizations have already started to weigh in on the value of the Principles. Oxfam America believes they "will constitute a major milestone in a long-standing effort to apply human rights standards directly to corporations."

The Interfaith Center on Corporate Responsibility (ICCR), a coalition of 300 faith-based and socially responsible institutional investors, has welcomed the Guiding Principles as a "defining framework for the future work of what needs to be done to improve the on-the-ground impact of corporations on the full range of human rights of individuals and communities."

The Institute for Human Rights and Business engaged actively in the process led by the Special Representative to develop the Guiding Principles and agree with his view that the Principles themselves will not bring business and human rights challenges to an end.

But his efforts to establish “a common global platform for action, on which cumulative progress can be built, step-by-step, without foreclosing any other promising longer-term developments” (A/HRC/17/31, para 13) is an invaluable contribution that should not be under-estimated.

We’ll get a better sense in the weeks ahead of how other non-governmental and business actors feel about the final version of the Special Representative’s Principles. Governments will of course be mindful of these views as they gather in June to consider next steps for follow up UN work on business and human rights as the Special Representative’s mandate comes to its completion.

Are corporate leaders ready?

A key question for the time ahead - are corporate leaders ready for the Guiding Principles? The short and perhaps unsurprising answer is that most leading companies have a lot of work ahead of them. Take Guiding Principle 16 as an example of what will be expected going forward. It makes clear that all companies should embed their responsibility to respect human rights throughout their operations by expressing:

"...their commitment to meet this responsibility through a statement of policy that:

1. Is approved at the most senior level of the business enterprise;

2. Is informed by relevant internal and/or external expertise;

3. Stipulates the enterprise’s human rights expectations of personnel, business partners and other parties directly linked to its operations, products or services;

4. Is publicly available and communicated internally and externally to all personnel, business partners and other relevant parties;

5. Is reflected in operational policies and procedures necessary to embed it throughout the business enterprise."

Many corporate leaders will admit that even this first step is no small task for their companies. It is hard to know for sure how many business enterprises around the world have already gone through such a process and have a policy in place as no definitive survey has been attempted. Available information indicates however that only a very small number of major companies have developed their own human rights policy statement in keeping with the Guiding Principles.

Most Admired Companies

Where should we look to get some sense of where leading companies are on this journey? Examining lists of corporate leaders is one place to start. For example, Fortune magazine recently released its 2011 "world’s most admired companies" list.

Of its 50 all-stars, selected for a range of attributes including “ability to attract, develop, and keep talented people”, “quality of products and services" and “responsibility to the community and environment”, only 15 of the firms have a public statement on human rights according to the running list of publicly available policies maintained by the Business and Human Rights Resource Centre

Most Ethical Companies

Ethisphere’s 2011 list of the "World’s Most Ethical Companies" reveals even less encouraging results.

Of the 110 companies on its list, only 22 turn up on the BHRRC site.

Five companies who have public human rights statements – Cisco Systems, General Electric, Marriott International, Microsoft and, PepsiCo make both the Ethisphere and Fortune lists.

Integrating the UN Framework

Of course, public statements of policy are only one way of assessing a company’s commitment to respecting human rights. But given that the new Guiding Principles will in all likelihood become the internationally agreed framework against which civil society, investors and governments themselves will measure the extent to which corporations are respecting human rights in the years ahead, it clearly isn’t too soon for business leaders – from leading brands to lesser known firms - to be asking themselves and their companies where they stand and how they will integrate the UN framework into their operations over the years ahead.