A Glass Filling Up - Reflections on the first year anniversary of the UN Guiding Principles on Busin

Things did not look good. Last summer, in the immediate aftermath of the UN Human Rights Council’s strong endorsement of the Guiding Principles on business and human rights (GPs), there was a definite pause.

After six years of John Ruggie’s thorough and exhaustive pursuit of a solution, and an intense period of debate leading up to the Council meetings, the business and human rights world might be forgiven for suffering a bit of a policy hangover.

Or was there more to it than that?

In the lead up to the June meeting of the Human Rights Council, it had been possible to discern grumblings. Some business no doubt disliked Ruggie’s use of terms like “regulation” under the State Duty to Protect pillar of the UN business and human rights framework and global civil society organisations bemoaned the lack of ‘binding’ rules for companies under the Business Responsibility to Respect.

This was probably to be expected. Both sides are defending very concrete interests and that reality means differences of opinion will remain. But the dark clouds of the post-Ruggie hangover posed a very real danger: if the grumblings became paralysis – or even simply disinterest - there would be no active implementation of the GPs. Without even an attempt to implement, the risk was that the GPs would go the way of so many other bits of UN paper and the objective of changing business behavior with respect to human rights would remain a pipe-dream. 

Today, the gloom of last summer seems more apparent than real. There have been tremendous strides made in a very short time in two - and possibly all three – of the areas which are necessary to changing business behavior with respect to human rights.

Governments have moved quickly to level the normative playing field internationally with respect to business responsibilities for human rights. In addition to the UN GPs, the OECD integrated the notion of respecting human rights – and its operationalization in the form of due diligence – into the revised Guidelines for Multinational Enterprises. That step was made in full coordination with Ruggie’s team, ensuring a coherence of standards that is not always the result of multilateral norm-building.

The same can be said for the OECD’s Guidance on Responsible Supply Chain Management relevant for conflict minerals from 2011, probably the most detailed public document on supply chain due diligence produced to date and one likely to be integrated into US Dodd-Frank rules on conflict minerals (if those rules ever emerge from the Securities and Exchange Commission). Similarly, the EU’s new CSR Strategy built on the GPs to redefine a social responsibility as based ultimately on business social “impacts” is significant and the Commission has begun a process of defining due diligence guidance for different sectors.

At the same time, social expectations have begun to emerge based on the new normative standards set down in the GPs. A global coalition of civil society organisations representing leading civil society voices on business and human rights have launched the Human Rights Due Diligence Project with an Expert Team to formulate legal and policy recommendations to governments on ways to promote due diligence to prevent, remedy and mitigate adverse human rights impacts (disclosure: I am part of that expert team).

Through regional consultations with legal experts, and through our own independent research, the objective of the HRDD project is to answer the question of how States can, through law and regulation, require or encourage businesses to engage in human rights due diligence. By looking at state practice – that is, how the legal systems in countries in every region already require due diligence by business (either directly in statute or indirectly through incentives in law) - the project aims to develop a principled basis for designing requirements for business due diligence in the area of human rights. Consultations with legal experts in every region are already underway.

Many businesses - at least those who are conscious of the issues – praised as fair and workable the GPs definition of a business responsibility to respect human rights based on a business’s impacts, the risk that its activities and relationships would infringe on the rights of others. A number have made explicit commitments to implement the GPs. But far too many businesses remain either ignorant of the issues or locked in to old school approaches to CSR.

Meeting social responsibilities in the era of the GPs requires a business to integrate due diligence to core business activities. But the problem for many businesses remains the fact that the incentives are all wrong, or at least not very progressive. Business has a crucial role in developing that clarity, not least as to the nature of due diligence across different sectors. But it cannot do it alone. Government must step up, make clear what the expectations are for compliance, and ensure that the normative basis of policies and rules are coordinated internationally.

On a number of fronts the signs remain unpromising: there seems to be little expectation anywhere that any company will be reporting risks detected by corporate due diligence practices, nor does there seem to be any attempt to develop ways to make that possible. And on the issue of remedies there is the risk of real set-backs: while countries like Norway and Colombia have reformed their National Contact Points of the OECD Guidelines, key players in key industries or economies - like Canada, China, India or the US - seem unwilling to take the steps necessary to make non-judicial remedies a real option for victims of business-related human rights abuse. In most places, the obstacles for victims to take their complaints to court remain extremely high.

So progress is tentative. Government and civil society, together with business, are taking significant steps in efforts to put in place the international framework for implementation of the business responsibility to respect. But this process has yet to pick up momentum where it really matters: at the national level. And, with the exception of EU policy, the world of CSR seems intent on rumbling on as if nothing happened in 2011. For the progress to continue, for a glass not quite half-full to continue filling up, civil society will have to ramp up its efforts and ensure that governments put the right policies in place, with the right mix of remedies to ensure the incentive framework for business is both fair and effective.