Next UK government must show leadership on business and human rights

May 5th 2010 | by John Morrison

The outcome of this week’s election in the UK (6 May) looks as if it will be close. Perhaps unsurprisingly, the links between human rights and business are not prominent in the manifestos of any of the main parties. But corporate responsibility and accountability clearly are issues that will have to be addressed by whichever party takes office.

In the British context, there are perhaps three constants that any winning party will need to consider:

• First, the public increasingly expects that the government should pay attention to the overseas activities of UK-registered companies. The Trafigura case is one prominent example of this, and the campaign targeting Vedanta is another instance. BP’s response to rights related impacts of ongoing environmental damage in the Gulf of Mexico is a further unfolding story to watch. Beyond that, ethical consumerism continues to grow at a slow and steady pace and has withstood the impact of the financial crisis so far.
• Second, UK business needs a level playing field in terms of non-financial risks when operating in countries of poor or weak governance. With developments within the United Nations, OECD and the World Bank Group, UK companies will increasingly find themselves called on to adhere to international standards of corporate accountability for their actions. They will want to see their Chinese, Indian, Russian and other emerging economy counterparts held to the same standards.
• A third and more elusive factor concerns the uncertain long-term competitiveness of the British economy. Though the UK has a strong financial sector along with research-led expertise in life sciences, biotechnology and nanotechnology, the challenge is to find other areas where Britain can lead in the future. As sustainability and product quality become increasingly important factors worldwide, these markets can be Britain’s competitive edge, but only if government puts the right policies in place to ensure market growth is built on respect for international standards of human rights.

We also shouldn’t forget that the last five years has witnessed a number of important benchmarks in the arena of business and human rights within the British Parliament including the
landmark report of the Joint Committee on Human Rights which set out a roadmap for implementing the United Nations’ ‘Protect, Respect and Remedy’ framework within a UK context.

That momentum must be maintained and built upon by whichever government takes charge. The UK government was a leading actor in creating Professor John Ruggie’s mandate in 2005 and should remain so as the mandate reaches its conclusion in 2011.

Being a leader in this area going forward means the new government will have to show strong political will, particularly on issues like the reform of Export Credit Guarantees, bilateral trade and investment agreements and the role of UK company law.

A recent letter from Lord Mandelson, the outgoing Secretary of State for Trade, to our chair Mary Robinson indicated the UK was committed to the harmonization of Export Credit safeguards across the OECD. However, the current proposals by the Export Credit Guarantee Department to relax tight labour standards adopted six years ago as a means of helping British exporters through the recession increase the risk of child and bonded labour in UK companies’ spheres of operation.

UK Company law was reformed near the start of the previous Parliament but the financial crisis has left serious questions about corporate governance which have not yet been answered.

Implementing business and human rights reforms has been agreed in principle: on the international stage, the Trade Union Congress and the Confederation of British Industry have both welcomed the need for such implementation. The creation of an All-Party Parliamentary Group to monitor progress on integration of the UN business and human rights framework domestically would be a wise investment. Political pressures can come into play to persuade the executive not to follow due process - as was the case with the dropping of the BAE Systems case from the OECD Anti-Bribery Convention in 2007. A parliamentary watchdog should be created to stand against such pressures.

Equally important, the UK must show leadership in shaping the future directions of important initiatives, including the Voluntary Principles on Security and Human Rights, with the opportunity for new impetus under the chair of the Obama Administration. Arguably, the UK government has ceased to play the leadership role on business and human rights that it did up until about 5 years ago. In Europe, it is the Swiss and Norwegian Governments that continue to play the most significant role across a range of diplomatic and pragmatic initiatives.

The UK Government must demonstrate again that it is a key actor in this domain, in particular around proposals for what should follow the Ruggie mandate at the UN in 2011. The updating of the OECD Guidelines on Multinational Enterprises is yet another part of this puzzle. The UK should take a leading role in the next phase of the development of the international architecture on business and human rights. The Department for International Development should commit to providing operational back-up to this policy agenda as is the case for ODA departments in several other European states, in particular Germany, Denmark, Finland and Sweden.

The new government should embrace the flourishing network of ‘social entrepreneurs’, the small and medium-sized enterprises across the UK, whose voices should be heard. The much troubled UK Equality and Human Rights Commission has now moved to create a working group on business and human rights and this small step in the right direction should be embraced and supported.

Finally, it is worth reflecting on the broader human rights context in which the UK finds itself. The European Charter of Fundamental Rights has now come into effect as part of the European Union’s Lisbon Treaty, but it has limited justiciability in the UK – a fact that is unlikely to change whoever wins the election this week. The European Convention on Human Rights (Council of Europe and not the European Union) is another constant in the UK, and although one of the main parties has raised the issue of replacing the 2000 UK Human Rights Act, there is no proposal from the main parties to derogate from the European Convention itself. In general, it will remain difficult for UK citizens to have any direct recourse to most international human rights mechanisms and any further integration of the UN business and human rights framework into the UK will need to recognise this fact.

Whoever is successful on 6 May, a single party or a coalition, the next five years will require the UK Government to step up to the plate and provide leadership on these critical issues.