Jernej Letnar Černič^[1]:


United Nations and Corporate Responsibility for Human Rights

1. Attempts to regulate corporate behaviour within the United Nations framework 

The association of human rights with business has gained a strong foothold in international, as well as domestic, law. A great number of United Nations (UN) initiatives include a reference to corporate responsibility for human rights.  This article attempts to clarify the current attempts within the United Nations to address and regulate corporate responsibility and accountability for human rights at the international level.  U.N. Norms on Human Rights Responsibilities of corporations are examined and critically analysed in sections 2 and 3. Following this, the mandate and reports of the U.N. Special Representative on business and human rights will be analysed in section 4, whereas the UN Global Compact initiative is examined in section 5. Analysis of this question is a central element of clarifying whether United Nations avenues of addressing the human rights obligations of corporations may at some point translate into binding mechanisms for corporate responsibility for human rights.^[2]  

A number of attempts to regulate corporate activities notoriously failed at the United Nations level in the 1970s and 1980s when no consensus was reached to adopt a code of conduct for transnational corporations (TNC); however the United Nations Centre for Transnational Corporations (UNCTC) was inaugurated in 1977.  Abrahams notes that ‘its mandate was carefully drafted to include monitoring transnational companies’ positive and negative, social and environmental impact.’^[3]  However, as Abrahams continues, ‘the arrival of the Centre gave rise to mixed emotions’ and ‘transnational companies and some developed nations were openly hostile, while developing countries felt elated after years of negotiation for its existence.’^[4] The next section discusses the U.N. Norms on Human Rights Responsibilities of Corporations. 

2. The U.N. Norms on Human Rights Responsibilities of Corporations  

This section examines the U.N. Norms on Human Rights Responsibilities of Corporations.  On 13 August 2003, the UN Sub-Commission on the Promotion and Protection of Human Rights approved the ‘Norms on the Responsibilities of Transnational Corporations and Other Business enterprises with regard to Human Rights’ together with accompanying Commentary as a document specifying the human rights obligations of corporations.^[5] The UN Norms offer human rights rules and principles for companies in areas ranging from international criminal and humanitarian law, civil, political, economic, social, and cultural rights, as well as consumer protection and environmental practices.^[6]  

The UN Norms place a normative obligation on TNCs and other business enterprises to promote, secure the fulfilment of, respect, ensure respect of, and protect human rights.^[7] In section 2, the UN Norms refer explicitly to fundamental human rights norms in the following way: 

Transnational corporations and other business enterprises shall ensure equality of opportunity and treatment, as provided in the relevant international instruments and national legislation as well as international human rights law, for the purpose of eliminating discrimination.^[8] 

The UN Norms offer a binding language of corporate human rights obligations even though they are not legally binding.^[9] Section 3 stipulates that corporations are prohibited from engaging in or benefiting from ‘war crimes, crimes against humanity, genocide, torture, forced disappearance, forced or compulsory labour, hostage-taking, extrajudicial, summary or arbitrary executions, other violations of humanitarian law and other international crimes against the human person as defined by international law, in particular human rights and humanitarian law.’^[10] In addition, the UN Norms provide that ‘transnational corporations and other business enterprises shall not use forced or compulsory labour as forbidden by the relevant international instruments and national legislation as well as international human rights and humanitarian law.’^[11] They further stipulate that ‘transnational corporations and other business enterprises shall respect the rights of children to be protected from economic exploitation as forbidden by the relevant international instruments and national legislation as well as international human rights and humanitarian law.’^[12]  

The UN Norms refer to transnational corporations and also to other ‘other business enterprises’, a phrase that covers all corporations with TNCs. Accordingly, the contractor, subcontractor, supplier, licensee or distributor is not exempt from the ambit of the UN Norms.^[13] As noted, corporations have under the UN Norms a general obligation ‘within their respective spheres of activity and influence’ to ‘promote, secure the fulfilment of, respect, ensure respect of and protect human rights recognized in international as well as national law, including the rights and interests of indigenous peoples and other vulnerable groups.’^[14] In this regard, ‘spheres of activity and influence’ cannot be found in any other human rights treaty. However, its definition and application are under discussion.^[15] The concept of ‘sphere of influence’ is clearly inclusive to show corporate complicity. Admittedly, one may take the concept of an exceptionally broad reading to include the whole range of potential involvement of corporations in violations of fundamental human rights.  And yet, while conceptually attractive and practically sound, the concept of ‘sphere of influence’ is limited by virtue of the vagueness of its content. 

            Human rights obligations of corporations laid down in the UN Norms appear to reflect layers found in the state context of human rights obligations. Weissbrodt and Kruger suggest that the Norms are ‘represent a landmark in holding businesses accountable for their human rights abuses and constitute a succinct, comprehensive, restatement of the international legal principles applicable to business.’^[16] The fact that the UN norms directly translate state human rights obligations has been their main criticism. The UN Norms, however, make clear that primary responsibility for human rights protection rests with states.   

            The UN Norms seem to suggest that there are no compelling policy arguments as to why corporations cannot have direct obligations under international law.  In this regard, it appears that it is more apt to ask whether a direct international regulation is appropriate in different instances. This approach has been questioned by the UN Special Representative on Business and Human Rights. Kinley and Chambers note that ‘most provisions of the Norms do not represent international law (instant or otherwise), and that they would not become so even if they had been adopted by the Commission, or the Human Rights Council that has replaced it.’^[17] In this regard, the former UN Commission on Human Rights noted that the Norms ‘as a draft proposal, has no legal standing, and that the Sub-Commission should not perform any monitoring function in this regard.’^[18] It appears that in order for UN Norms to be transformed into binding law, the states and corporations would have to start to include them in their policies and practices. Considering that they cover an array of human rights, they are certainly an improvement over earlier such attempts at the international level.  They are a step in the ‘right direction’, albeit a humble and ‘an imperfect step.’^[19]

3. Implementation of the UN Norms 

For once, fundamental human rights should not be entrusted to self-regulatory responses only. The norms include ‘many implementation provisions, which may indicate that they are not just aspirational statements of desired conduct.’^[20] In contrast, they are drafted in mandatory terms. The UN Norms call on states to ‘reinforce the necessary legal and administrative framework for ensuring that corporations implement the Norms and other relevant national and international laws.’^[21] Resolution 2003/16 sets forth implementation methods and suggestions for development of further mechanisms.^[22] Corporations ‘shall periodically report on and take other measures fully to implement the Norms and to provide at least for the prompt implementation of the protections set forth in the Norms.’^[23] Moreover, corporations  

‘shall enhance the transparency of their activities by disclosing timely, relevant, regular and reliable information regarding their activities, structure, financial situation and performance. They shall also make known the location of their offices, subsidiaries and factories, so as to facilitate measures to ensure that the enterprises, products and services are being produced under conditions that respect these Norms.’^[24]  

To this end, the Norms include a reparation provision, which obliges corporations to provide prompt, effective and adequate reparations to those affected by corporations’ violation of the Norms. This provision has provoked a lot of criticism.^[25] The Norms further offer that ‘corporations shall be subject to periodic monitoring and verification by United Nations, other international and national mechanisms already in existence or yet to be created, regarding application of the Norms.’^[26]  

The Norms also address implementation concerning supply chains of corporations and they encourage businesses ‘to apply and incorporate norms into their contracts with business partners, and ensure that business partners only do business with others who follows standards similar to the Norms.’^[27]  Weissbrodt claims that ‘as the legal status of the Norms is developing, as it begins to be addressed by different international; inter-governmental, and non-governmental bodies, the methods of implementation will continue to develop as different bodies consider the Norms.’^[28] For example, Deva suggests that ‘enforcement mechanisms should be put in place before the Norms are being adopted’ and that the mechanism must ‘not only preempt human rights violations but also offer speedily an adequate remedy to the victims in cases of violations.’^[29] However, there has been a lack of any development concerning the Norms since their adoption by the UN Sub-Commission on Human Rights.  The problem is one of enforcement: it cannot be realistically expected from an already an overburdened and understaffed United Nations system to enforce the Norms. In this regard, it appears that the proposal submitted by Alfredsson, former member of the former United Nations Sub-Commission on Human Rights working group on the working methods and activities of transnational corporations, suggests that while (transnational) corporations ‘should respect human rights, national laws protect human rights and so legislative action at the national level should be the vehicle for ensuring that companies respect human rights.’^[30] The United Nations could then provide technical assistance to those states that are not easily able to monitor and enforce compliance on their own.^[31]  

It appears that the Norms will have more impact where they are incorporated into the national legal orders.  This can be done by means of a number of steps. Firstly, if the Norms were included into contracts with subcontractors, they could be relied on in domestic courts, or in binding arbitration.^[32] Secondly, the adoption of the Norms would streamline policy language concerning the fundamental human rights obligations of corporations.  Thirdly, it may be argued that Norms could become an interpretive device for the human rights conditions related to a procurement framework that opts out corporations with poor human rights accord. All in all, it appears that the most appropriate solution would be the mixture of a number of alternative mechanisms in order to enforce corporate responsibility for fundamental human rights. It appears that in order for UN Norms to be transformed into binding law, a state would have to include them in their policies and practices. Considering that the Norms cover an array of human rights, they are certainly an improvement over earlier such attempts at the international level.  

4. The work of the UN Special Representative on business and human rights  

The UN Norms have been described by their principal author as a ‘restatement and clarification of the existing human rights obligations of corporations.’^[33] However, the UN Norms have earned a great deal of criticism, perhaps unwarranted, for the perceived lack of certainty of corporate human rights obligations.  The Norms were eventually not adopted by the then UN Commission on Human Rights.  Instead, the Commission asked the UN Secretary-General to appoint a Special Representative on the issue of corporations and human rights.  In July 2005, John Ruggie, a professor at Harvard University was appointed Special Representative of the UN Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises. 

            Ruggie criticized the 2003 Norms and has submitted that the ‘norms exercise became engulfed by its own doctrinal excesses.’^[34] The 2008 Ruggie Report noted that ‘flaws of the Norms make … a distraction from rather than basis for moving the Representative’s mandate forward.’^[35] He further observed that ‘if the Norms merely restate established international legal principles then they cannot also directly bind business because, with the possible exception of certain war crimes and crimes against humanity, there are no generally accepted international legal principles that do so’.^[36] In the 2008 report, Ruggie proposes a three-pillar framework for corporate accountability for human rights, which he describes as ‘Protect, Respect and Remedy’. The framework ‘rests on differentiated but complementary responsibilities,’^[37] which include: the state duty to protect against human rights violations by or involving corporations; the corporate responsibility to respect human rights; and effective access to remedies.^[38] In his 2009 report, Ruggie notes that corporate responsibility to respect human rights ‘has acquired near-universal recognition by all stakeholders.’^[39] Going beyond the previous report, the 2009 Report recognises that ‘there may be situations in which companies have additional responsibilities. But the responsibility to respect is the baseline norm for all companies in all situations.’^[40] In his 2010 report, Ruggie argues that the scope of corporate responsibility to protect human rights is 'defined by the actual and potential human rights impacts generated through a company’s own business activities and through its relationships with other parties, such as business partners, entities in its value chain, other non-State actors and State agents.'^[41] He further notes that 'the corporate responsibility to respect human rights exists independently of States’ duties or capacity. It constitutes a universally applicable human rights responsibility for all companies, in all situations.'^[42] To claim that corporations have responsibility to protect human rights is not controversial. It would have been more persuasive and interesting if Ruggie would to attempt to identify when corporations have also obligations to protect and fulfil human rights.  

It appears that the framework ‘protect, respect and remedy’ does not offer the right answer for explaining the normative framework of corporate responsibility. Kinley noted that ‘as a conceptual framework, ‘protect, respect, remedy’ was “unobjectionable”, but that it did little to answer the problem which Professor Ruggie had identified: “in which states are so weak or unwilling to protect human rights and corporations are so comparatively strong or conveniently transnational to evade human rights responsibilities”.’^[43] What is more, Ruggie does not attempt to explain how his proposed framework relates to the generally accepted framework under international human rights law, where state obligations are usually classified into three categories: the obligation to respect, the obligation to protect and the obligation to fulfil. Ruggie nonetheless recognises that corporations already have obligations and responsibility to respect (‘obligation to do no harm’), but he refrains from addressing the question as to whether corporations also have obligations and responsibility to protect and fulfil fundamental the human rights of individuals.^[44] This is somehow surprising, particularly as some corporations have already recognised that they also have obligations to protect and fulfil human rights.^[45] In this light, it may well be argued that not only do states have obligations to respect, protect and fulfil fundamental human rights, but also that corporations have obligations to respect, protect and fulfil fundamental human rights.

5. Global Compact

The United Nations Global Compact encourages corporations to ‘embrace and enact’ ten principles concerning human rights, labour rights, the protection of the environment and corruption.^[46] The two human rights principles included in the Compact ask businesses to ‘support and respect the protection of internationally proclaimed human rights’^[47] within their sphere of influence and that businesses ‘should make sure that they are not complicit in human rights abuses’^[48] but, with the exception of labour rights, the principles do not specify which human rights which business should support and respect. The two principles do not refer directly to fundamental human rights, but it is argued that they can be derived from ‘the protection of internationally proclaimed human rights’ in the principle one.^[49] It seems that Global Compact is not conceptually clear, which leaves a wide margin of appreciation for corporations on how to interpret and apply principles. That said, principles concerning labour rights are more precise, as they stipulate that corporations should uphold the elimination of all forms of forced and compulsory labour, the effective abolition of child labour, the elimination of discrimination in respect of employment and occupation, and the freedom of association and the effective recognition of the right to collective bargaining.^[50] In the next paragraph, the common criticisms of this initiative are briefly explored.

The common criticisms of the Global Compact are that the Compact does not provide the ‘mechanisms for monitoring and sanctioning’ corporations that violate the principles and that ‘companies that break the principles are not expelled.’^[51] In other words, some commentators believe that the Global Compact is based on an erroneous assumption, namely that ‘corporate-driven globalisation serves everyone’s interests and that corporations are using the Compact as a means of derailing the Norms, illustrating that the Compact does not serve to compliment the effort to create binding regulations.’^[52] One commentator argued for ‘the scrapping of the Compact so that efforts can be concentrated on building support for the UN Norms.’^[53] For these reasons, it appears that the Global Compact must develop a closer association with the normative protection of human rights in national legal orders and international law.

Admittedly, the Global Compact has been successful to the extent that it attracted large numbers of participants, now estimated at more than 7,700 participants, including over 5,300 corporations in 130 countries worldwide.^[54] In this regard, there are aspirations that Global Compact principles will evolve into stronger ones, much as human rights law principles have over the past decades. Given the fact that only two of the nine principles of the Compact deal with human rights, it is clear that there is work to be done. Additionally, responsible business practices can ‘contribute to social and economic inclusion,’ and to the protection of human rights.^[55] This cannot be easily brushed aside. This is true, but it does not mean that all corporations operate towards this goal. However, for above reason, it appears the Global Compact’s overall effect has been marginal.

6. Conclusion

From this analysis of the most important initiatives at the United Nations relating to corporate responsibility for human rights, it becomes clear that a number of different avenues are being pursued in an attempt to achieve better protection of human rights. Even at the level of the United Nations, where corporations are considered equal partners in protection and promotion of human rights, it appears that clear and objectively verifiable criteria for evaluation of corporate human rights violations must first be developed to improve corporate compliance with human rights norms. Nonetheless, the UN norms are a seminal point of departure for corporate responsibility for fundamental human rights. However, effective procedures and mechanisms of international review must be established to screen every alleged corporate human rights violations and to ensure corporate accountability.