Have the Voluntary Principles Realised Their Full Potential?

Commentary, 17 March 2010

By Salil Tripathi, Senior Advisor, Global Issues, IHRB

Extractive industries have little choice but to operate where they find resources. As a result, they may find themselves in conflict zones, facing human rights abuses taking place in their area of operations. Many have argued that since these abuses take place within their sphere of influence, companies have a responsibility to act.

Ten years ago, officials in the U.S. Government began talking with officials in the U.K, Government, oil and mining companies, and human rights groups, to develop a framework that tries to deal with the problem: powerful companies operating in remote areas where human rights protection is weak, and where local governments are unwilling or unable to protect human rights. The challenge was to create a framework where businesses can protect their people and assets without violating fundamental freedoms.

It wasn’t easy: few human rights groups and companies had talked to one another in closed-door settings at that time. But the process worked, and after a little over a year, the U.S. and U.K. governments were able to unveil the Voluntary Principles for Security and Human Rights for the extractive sector.

Tenth anniversary

This week, the members of the VP process are meeting in London. On the tenth anniversary of the VPs, it is understandable that the mood will be, to some extent, celebratory. Besides the U.S. and the U.K., the VPs now have five more participating governments (the Netherlands, Norway, Canada, Colombia, and Switzerland having joined the process); the number of human rights groups has grown to nine (Amnesty International, Fund for Peace, Human Rights First, Human Rights Watch, IKV Pax Christi, International Alert, Oxfam, Pact, and Search for Common Ground), and 17 companies, drawn from countries whose governments are part of the process.

Crucially, these organisations "support the process and welcome the principles", a phrase that demonstrates willingness to participate in the dialogue, while acknowledging its limitations. (That the Principles are called voluntary, and are not obligatory, remains an issue for many NGOs, but more about that later).

The International Committee for the Red Cross is an observer to the process, as are two industry groups – the International Council for Mining and Metals, and the International Petroleum Industry Environmental Conservation Association.

[A disclosure is in order: I represented Amnesty International in the negotiations leading up to the drafting of the Principles; I will be among the two facilitators at the Plenary meeting this week.]

Full potential realised?

Today, the VPs are used as part of training by many companies internally, as well as by some private security companies. A few companies have made observance of the VPs part of their service contracts with security providers, both state and private firms. The International Finance Corporation cites elements of the VPs as part of its performance standards.

But it is a legitimate question to ask, if ten years later the VPs have realized their full potential. The VPs came into being before the Extractive Industry Transparency Initiative or the Kimberley Process Certification Scheme were launched. And yet, it is fair to argue that outside the narrow circle of practitioners in the field of business and human rights, it is EITI and KPCS which have wider recognition.

Heads of state have made speeches which have cited the anti-corruption agenda vigorously, with EITI referred to frequently as a benchmark; and academic experts as well as officials of international organizations have explored ways of replicating the Kimberley model for other commodities, to find out if a similar mechanism can be created to prevent the flow of resources from commodities trade which would otherwise sustain violent conflict.

This has partly to do with clarity. EITI is simple to understand: it aims to ensure that businesses are transparent in their financial dealings with governments. The Kimberley Process is designed to give effect to U.N. sanctions which specifically banned procuring diamonds from specific areas.

The VPs, on the other hand, are about using influence through a code of behaviour which companies are expected to internalize, and then use their discretion in their interactions with public and private security forces, to remind the forces of their obligations. The VP process also requires businesses to undertake risk assessment, consult communities and other stakeholders widely, and report human rights abuses. While the language says what is expected, encouraging companies to do specific things, it does not clearly specify how that is to be done, leaving all stakeholders – businesses, governments, and human rights groups - with different expectations of what’s required.

That strategic ambiguity had a purpose: expecting companies to ask a foreign state’s security forces to uphold human rights standards can raise all sorts of alarm bells politically. Is it the right thing to do? (Yes). Could it be viewed as interfering in the sovereignty of another nation? (Yes, but so too could other forms of human rights activism). But how does one do this without adverse consequences? The response to that varies across countries. The ongoing challenge for the VPs is to get that right.

Read the fine print

Another reason the VPs appear to be losing momentum is the perception that the principles are voluntary. At one level, indeed they are – read the label. But read the fine print, too: they are voluntary for businesses, but not for governments. Companies voluntarily commit to a process which requires them to use their influence to remind the states to live up to their mandatory legal obligations. Companies that have developed detailed implementation guidelines point out another feature: their guidelines are mandatory – once a company establishes a policy, employees do not have discretion on whether or not to adhere.

As a former oil industry official who was one of the small team (of business, NGO, and government officials) which drafted the principles, puts it: "Companies should see VPs as part of their performance standards; security companies or state security forces are sub-contractors, they should meet certain requirements and standards." That is the right approach.


The final issue is accountability: one way companies can be accountable is by reporting what they’ve done. There is some understandable reluctance among companies about how much they should disclose. There are security considerations, and some dialogue on human rights is often confidential, for good reasons. But there has to be a middle ground between full disclosure and anodyne statistics, showing the number of people who participated in human rights workshops. It is important that more people are trained; it is as, if not more important, to learn how the training has influenced behaviour.

Measuring human rights performance of non-state actors who are not primary duty bearers, and whose impact on a particular human rights context may only be indirect is not easy. But it isn’t as difficult as finding the cure for cancer.

The Voluntary Principles remain necessary because their raison d’etre – state failure to protect rights – has not diminished, and their reach needs to be wider geographically, as companies originating from countries that are not part of the VP process are increasingly making investments in precisely the sort of countries where home governments are unwilling or unable to protect rights.

There is much more the VPs can achieve. Its process can be more transparent, its lessons more widely shared, and the principles could apply across different sectors.

Industries will always face challenges, and as more extractive companies look for resources in remote parts, relationships with local communities will have to be handled with care, in order to protect human rights. The blockbuster film Avatar is fictional, but there are parallels in the real world, and in spite of the VPs, abuses have continued.

At 10, the participants of the VPs have to rise to that challenge – with companies using their influence and becoming bolder; with NGOs helping implementation and acting as watchdogs; and with governments offering advice, warning, and where appropriate, launching prosecution.

As John Ruggie, the UN Secretary General’s special representative for business and human rights, reminds us, the State has a duty to Protect, which companies and NGOs are expected to remind the states of; companies have the Responsibility to Respect, which means undertaking due diligence and causing no harm, for which the VPs provide a framework; and where there are abuses and gaps exist, there is need for judicial and non-judicial mechanisms to identify and apply Remedies. The VPs offer a forum where these issues can be discussed to fill that gap.

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