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The weaknesses of CSR governance that led to the collapse of Enron and the advent of Sarbanes-Oxley legislation in the US has implications for the challenges of CSR governance at the global level. The primary global dialogue and reference point for business and human rights concerns the Special Representative of the UN Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises (SRSG). The Interim Report issued in February 2006 by the SRSG, Harvard University Professor of International Affairs and former UN Assistant Secretary-General John Ruggie, provoked a flurry of reactions and stakeholder engagement.
The SRSG offered hope for blazing new ground in standards concerning business and human rights, and more specifically clarification of terms such as 'business spheres of activity and influence' by stating that its final report will go beyond restating what has taken place to date and contain 'normative judgments'.13 In addition to strengthening the body of standards, a full overview of existing standards and tools and support for the most effective would move the field ahead in its application on the ground. An addition to this mix, a new Human Rights Guide for Business, was launched in June 2006 by the Business Leaders Initiative on Human Rights, the United Nations Global Compact Office and the Office of the United Nations High Commissioner for Human Rights.14
Amnesty International (AI) called on the SRSG to address the responsibilities of companies to protect human rights when they are in host states that are unwilling or unable to do so. Interestingly, both AI and the International Chamber of Commerce (ICC) called for clarification of the terms 'complicity' and 'sphere of influence' as used in the business and human rights context.15
The ICC's response to the SRSG's mandate commented that 'the state is the duty-bearer in protecting and promoting human rights' and, in its favoured monolithic monotone of the omnipotent voice of all enterprise, that 'Business does not believe there is a need for a new international framework.16
The SRSG's Interim Report noted that 'it may be desirable in some circumstances for corporations to become direct bearers of international human rights obligations, especially where host governments cannot or will not enforce their obligations and where the classical international human rights regime, therefore, cannot possibly be expected to function as intended.17
A letter issued by over 100 NGOs in May in response to the Interim Report called on the SRSG to take into account the UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, or simply the UN Norms for short.18 The SRSG, however, had criticised the UN Norms in the Interim Report in unusually stark language. Criticisms levelled include 'exaggerated legal claims', by taking 'existing state-based human rights instruments and simply asserting that many of their provisions now are binding on corporations as well. But that assertion itself has little authoritative basis in international law-hard, soft, or otherwise.' Ruggie went on to say that 'All existing instruments specifically aimed at holding corporations to international human rights standards ... are of a voluntary nature. Relevant instruments that do have international legal force ... impose obligations on states, not companies.' This critique does not even encompass the most volatile elements of the UN Norms-to monitor corporations and provide for payment of reparations to victims. Further, the SRSG cites 'the flaws of the Norms' as 'a distraction from rather than a basis for moving the SRSG's mandate forward.19
Approved on 13 August 2003, by the UN Sub-Commission on the Promotion and Protection of Human Rights, the UN Norms compiled a laundry list of the key human rights documents related to business under one roof, which served to focus the discussion greatly.20 Subsequently, the UN Commission on Human Rights decided not to move ahead with the document. By virtue of this decision and the sheer lack of governmental support, the SRSG stated that the UN Norms did not possess legal standing.21 A former high-ranking official with knowledge of the process commented that the SRSG's statement 'was the embalming oil of something that was already dead in the coffin'.
A lead in drafting the UN Norms, Professor David Weissbrodt, argues that the SRSG's critique of the Norms was 'inspired if not copied word-for-word from the advocacy of the International Chamber of Commerce (ICC) and the International Organization of Employers (IOE)' and 'relies on the tendentious and highly biased views of lawyers employed by' those organisations and 'ignores the considerable positive commentary that the Norms have generated'. He criticises the SRSG for exaggerating the potential power of the Norms, reminding us that they 'do not constitute a treaty and therefore cannot bind either states or corporations in the same way that treaties are binding if they are ratified'. Weissbrodt explains that 'the Norms principally reflect, restate, and refer to existing international standards, but apply them not only to governments but directly to businesses. The Norms are consistent with the progressive development of international law in applying standards not only to states, but also to individuals, armed opposition groups, and other non-state actors.22 In this sense, the Norms seek to move forward the basic concept and application of international law in line with recent developments on non-state actors, as highlighted by the establishment of the International Criminal Court. Ruggie's approach rejects that development.
Despite this, the UN Norms are still breathing, in two respects: the issues lie at the heart of the SRSG's mandate, and NGOs continue to use the UN Norms as a campaigning and learning tool, while consultants are using it in work with companies.
Human rights impact assessment standards are another area that the SRSG cited as having considerable impact on the ability of companies to meet their human rights obligations at both national and project levels, but which are in need of development. Unfortunately, the broad scope of the SRSG's mandate-an entirely unfunded mandate-means that this task will be left to others to carry out.23
The SRSG declares in the final paragraph of the Interim Report 'an unflinching commitment to the principle of strengthening the promotion and protection of human rights as it relates to business, coupled with a pragmatic attachment to what works best'.24 As a school of philosophy, pragmatism suggests that beliefs qualify as valid or not, even 'true' or 'false', depending on how helpful they are in accomplishing the believer's goals. Thus it is only through their usefulness that theories and beliefs acquire meaning and validity. Even when the term is used in a more colloquial way, it often reflects this type of world-view.25 Many human rights are widely seen, and legally recognised, as inalienable principles which are therefore absolute, not awarded by human power, not transferable to another power, and incapable of repudiation.26
The idea, which is held by Amnesty International, that rights should never be relative to circumstance sits uneasily with the concept of pragmatism. 'We are concerned that the approach of "principled pragmatism" to which you refer in your report may lead to underestimating the need for binding legal principles and guidelines as well as the state of applicable international law', said Amnesty's director Irene Khan in a letter to Professor Ruggie in April.27 They pointed out the limited evidence of success from voluntary initiatives and the problem of providing mechanisms of redress based on voluntary benevolence from powerful actors. It is also worth remembering that, when the Norms were originally launched, Professor Weissbrodt also claimed pragmatism in defence of criticisms from NGOs that they did not go far enough. Perhaps if there is ever to be 'principled pragmatism', it will require incorporating a set of absolute values which counterpose the relativist and opportunistic dimensions to pragmatist philosophy. Otherwise, claims to pragmatism may mask how our views have been shaped by acquiescence to those power relations that sustain our privilege. If it did, then the successful acceptance of our ideas would merely make us the intellectual totalitarians of our time.
A potential area of common thought lies in the desire by business groups such as the ICC, IOE and Business for Social Responsibility,28 as well as human rights groups, for more stable operating environments with better governance and rule of law. The fact remains that the lack of effective global governance mechanisms, coupled with national governments that have proven woeful in preventing or holding accountable corporate involvement in human rights abuses, has resulted in a void that needs to be filled.
One step in that direction occurred when the new UN Human Rights Council convened its first meeting on 19 June 2006. The new and improved body will take up the SRSG report and serve as a key global institution for dealing with business and human rights. It will now meet throughout the year and has a mechanism to take up urgent crises. All 192 UN member states will now have their human rights record examined, resources permitting. The real test of the new UN Human Rights Council, much like the challenge more broadly for business and human rights standards, will be in its ability to hold accountable 'any Council member who commits gross and systematic violations of human rights' and 'have their rights of membership suspended by a two-thirds majority of the General Assembly'.29
13 John Ruggie, 'Interim Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises', UN Doc. E/CN.4/2006/97 (2006); www1.umn.edu/humanrts/business/RuggieReport2006.html.
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