UN Draft Report Calls on Corporations and Nations to Uphold Human Rights

December 20, 2010

Professor John Ruggie, United Nations Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, has issued a Draft Report on the role of corporations and states in protecting human rights. Although the draft has not yet been adopted by any UN body or implemented by any state, there is a substantial probability that it will soon be formally recognized at the international level, and thereafter implemented in some form by multiple individual states. 

The Draft Report has been posted for public review and comment until January 31, 2011. 

Background

In 2004, a sub-commission of the UN Commission on Human Rights issued a set of draft norms on the responsibilities of transnational corporations that sought to create binding human rights obligations. The Commission declined to adopt the controversial draft norms and instead asked the UN Secretary-General to appoint a Special Representative to submit views and recommendations on the roles of states and private enterprises with respect to human rights. In July 2005, then Secretary General Annan appointed Professor Ruggie as Special Representative. 

In June 2008, Professor Ruggie presented a report entitled Protect, Respect and Remedy: a Framework for Business and Human Rights to the UN Human Rights Council (which had replaced the Commission). The Framework aims to provide an “authoritative focal point” for stakeholders to “anchor the business and human rights debate.” It consists of three core principles: 1) the duty of states to protect against human rights abuses by third parties, including business enterprises; 2) the duty of corporations to avoid infringing on others’ rights and to redress adverse impacts; and 3) access to judicial and non-judicial remedies for victims.  

In November 2010, answering the Council’s call to offer “concrete and practical recommendations” for implementing the Framework, Professor Ruggie issued the Draft Report. It takes the form of prescriptive guidance to states and businesses, offering additional clarification on the roles and responsibilities of each in light of the obligations conceptualized in the Framework. The purpose of the Draft Report is not to create new obligations in international law, but to elaborate on “the implications of existing standards and practices for states and businesses,” to integrate them into a comprehensive and coherent form and to identify gaps in the current regime. The draft also offers explanatory commentary.

Overview of the Guiding Principles

The Principles in the Draft Report track the tripartite structure of the Framework, with each substantive section addressed to one of the three pillars. 

First, the Draft Report reiterates the obligation of states to “prevent, investigate, punish and redress” abuses and exhorts them to encourage respect for human rights by firms domiciled in their territory (Recommendations 1 and 2). The Draft Report recommends, for instance, that states should:

  • Consider human rights across all relevant governmental agencies (Recommendation 3);
  • Maintain space to fulfill human rights objectives when pursuing economic objectives such as investment treaties and contracts (Recommendation 4);
  • Promote human rights performance transparency by businesses (Recommendation 5d);
  • Ensure that state support for business takes human rights performance into account (Recommendation 8);
  • Assist businesses operating in conflict zones to identify and mitigate risks (Recommendation 10b); and
  • Withdraw support for enterprises that fail to address adverse human rights impacts in such areas (Recommendation 10c).  

Second, the Draft Report calls on firms to “avoid infringing on the human rights of others and to address adverse human rights impacts they may cause or contribute to,” which at a minimum means compliance with the eight International Labor Organization core conventions (only two of which the United States has adopted) and the International Bill of Human Rights (parts of which the United States has ratified, and parts of which the United States has signed but not ratified). The draft states that this obligation should flow to all activities of a business enterprise, regardless of size, ownership, or function (Recommendation 12a, b). Corporations are further asked to:

  • Conduct human rights due diligence across all aspects of their activities, including in their relationships with state and private business partners, to assess actual and potential human rights impacts (Recommendation 15);
  • Integrate the findings of these assessments into their operations and track and communicate their performance (Recommendation 17);
  • Find ways to respect human rights regardless of the domestic enforcement context (Recommendation 21a); and
  • Treat the risk of contributing to international crimes through human rights violations as a matter of legal compliance (Recommendation 21d). 

As for providing a remedy for human rights abuse victims, the Draft Report calls on states to:

  • Establish means for redress (Recommendation 23);
  • Reduce barriers to justice (Recommendation 24); and
  • Provide effective non-judicial and non-state grievance mechanisms (Recommendation 25 and 26). 

Business enterprises, for their part, are exhorted to establish or participate in such grievance mechanisms (Recommendation 27). In all cases, the draft declares that these mechanisms should be legitimate, transparent, accessible, predictable, equitable, and based on dialogue and engagement. 

Conclusion

The Draft Report is an important start in identifying a framework for business and human rights norms. The Draft Report also raises a number of issues for multinational businesses, which will likely face the expectation of enacting human rights compliance programs, engaging with stakeholders, and participating in meaningful remediation programs. In addition, while the recommendations are not considered “law,” they almost assuredly will lead to increased human rights regulation around the world, may be adopted in whole or in part by certain countries, and certainly may form the framework for norms reflected in the work of  UN Special Rapporteurs, international tribunals, and other bodies with legal authorities. They also may be considered by courts in the context of identifying a relevant “duty of care” in a common law negligence action.

For companies, complying with the expectations, and fallout, of the recommendations may be operationally difficult. Indeed, companies may face inconsistent regulations among jurisdictions, and one Recommendation (21) even calls on companies to honor internationally recognized rights though they might be “undermine[d]” by domestic law.

The Business & Human Rights Advisory is published quarterly by Steptoe & Johnson LLP. To learn more about Steptoe's Business & Human Rights practice visit: www.steptoe.com.