[International Organisation of Employers, March 2005]
SIXTY-FIRST SESSION OF THE UN COMMISSION ON HUMAN RIGHTS
ITEM 16 OF THE PROVISIONAL AGENDA:
Report of the UN High Commissioner for Human Rights on the
responsibilities of Transnational Corporations and other
Business Enterprises with regard to Human Rights
On behalf of the International Organisation of Employers, which represents the interests of 139 national employers' organizations around the world, we are writing to you to convey our views on the content of the above-mentioned paper. We believe it is important that the representativeviews of business are before you when you consider this report.
Whilst the I0E is pleased to see its concerns with regard to the responsibilities of business becoming better clarified, the IOE is concerned that the issue remains filtered through a human rights organization prism. In our view, this distorts both the approach taken in the report and, in particular, the recommendations contained in the final pages of the document.
The IOE and the ICC - the only global business representatives - contributed their views on behalf of their members to the consultation process undertaken in producing this paper. However, it is not clear from the document how much weight was given to the views of representative business organizations and the paper relies instead as a rationale to act on isolated initiatives by a handful of businesses, often associated with NGOs, that do not engage the business community widely. This particularly comes through strongly in the number of statements made that there are gaps in the understanding of the nature and scope of the human rights responsibility of business. The paper does not say who has this view, or how representative such a view is.
Similarly, errors persist in the referencing to International Labour Organization instruments in the annex and, in many instances, initiatives such as SA 8000 appear to be given equal status with national legislation. This confuses the roles of the State and other actors and taints the conclusions.
What is CSR?
The IOE, like the business community globally and others, has defined CSR to mean "initiatives by companies voluntarily integrating social and environmental concerns in their business operations and in their interaction with their stakeholders". This definition recognizes that CSR is beyond legal compliance. Legal compliance is not CSR and for the paper to link the concept of CSR to the obligation to obey the law distorts the CSR concept itself as well as undermines the true status of legal compliance.
CSR is driven by the needs of individual companies. This means that there is no one CSR response or one business case for engagement as no two companies are exactly the same. Unfortunately, the reality of this diversity is seen in the report as "inconsistency between companies and across nations"(page 12 paragraph 25) and that somehow consistency and commonality should be pursued by the Commission. This impacts on both companies and countries. Such efforts could be seen, particularly from the developing world, as an attempt to impose western standards upon them.
Gaps in understanding
The issue of "gaps" or "space" is relied on in the text as a rationale for the Commission to act. For example, the lack of specificity seen in the ILO MNE Declaration, the Global Compact and the OECD Guidelines is seen as a problem. This does not fully reflect the real situation. The ILO Declaration is clear on the rights it contains and includes an interpretation mechanism, should clarification be needed. The Global Compact was conceived as a statement of principles which the UN Secretary-General asked business to support and work towards, deliberately allowing companies space to respond in accordance with their own realities. Similarly, the OECD Guidelines provide space for business, with the National Contact Points available to assist where necessary.
All three of these initiatives operate in the realization that it is not possible to define every issue to such a degree that is suitable for every context. That reality is reflected in ILO responses to the world of work. They give countries the "space" in certain areas in enabling them to reflect reality in achieving the overall aims of the instruments.
It is our firm view that these so-called gaps do not of themselves necessitate the Commission to act. To approach this issue without considering the reality of the business world would be fatal to the effectiveness of any response.
The role of business
The Commission Secretariat has only recently begun a dialogue with the business community and this is reflected in the statements made as to how they see business providing a vehicle for human rights promotion. The paper seems to suggest that investment decisions by business could be used by others to promote human rights. This carries with it the idea that some "conditionality" should be attached to business investment decisions. We see this as unhelpful to both business development generally and in terms of how it could be used as a tool by States. Economic conditionality could harm developing countries in their own development. At the
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moment, business decisions include a range of considerations and business is in dialogue with stakeholders in how it engages in countries. We would not like to see the UN impose itself into the stakeholder relationship.
This idea is further developed in the text when it looks at the issue of "sphere of influence" (page 14) where it states that limits could be set on responsibilities according to a business entity's "power to act". This is incorrect in our view. A sphere of influence is just that – an area where influence can be extended - but influence does not mean that business has a power to act; that power must come from a "right".
The paper then suggests that business could be made to "promote" human rights through its supply chain via contractual relationships. This is often done voluntarily when there is a business case for it. This suggestion ignores the business case aspect that is inherent in business decisions. The idea is to promote the values and expectations of the business to supply partners, not to assume responsibility for that partner's omission. It has also been shown that business cannot just simply walk away when suppliers fails to meet the expectations placed on them contractually therefore limiting the effect a company can have on suppliers in the simple sense envisaged by the paper. This contractual aspect is referred to at length within the text but it is, in our view, no replacement for the responsibility of States.
On page 14, paragraph 36, the idea, promoted by the original thinking behind the Draft Norms, is that somehow larger companies have greater responsibilities than smaller ones. This is dangerous as it promotes a belief that the "support and respect the protection of internationally proclaimed human rights", as set out in the first principle of the Global Compact for example, varies among companies because of size. Resources available and ability to act may vary, but not the "support" they are meant to bring to human rights.
Similarly, on page 15, paragraph 45, the paper recognizes that company and market initiatives have their limits. This should come as no surprise as they are not, as the paper goes on to state, a substitute for legal action, i.e. State action. However, such limitations do not nor should not be considered as making company efforts any less valid.
State Responsibility
This aspect is hardly touched on in the paper. Rather it focuses instead on existing CSR initiatives. The main mechanism by which human rights protections are enforced is through national laws. It is not surprising that gaps can be seen if the main framework of law is ignored. It is our firm view that the Commission should do more to work with States to enable them to give effect to their obligations rather than look to short-cut the issue by turning to business to give effect to these responsibilities. At the end of the day, business must comply with national law and the Commission should not look to place business in a position that could be seen as antagonistic by States.
We are pleased to see the paper reaffirming that States are the primary duty bearers of human rights. However, that reaffirmation tends to be diluted or even forgotten in the development of the text and the drift, as contained in the "Draft Norms", towards business responsibility persists in the tone of the paper.
Conclusions and Recommendations
The paper comes back to the "Draft Norms" which were not accepted by the Commission on Human Rights, and promotes them as a simple response to the paper's view that so-called gaps need to be filled. The international business community does not share the view that the Draft Norms could be a helpful starting point for further work. Should the Commission consider further work necessary, it would be better if a non-prescriptive, non-confrontational framework were considered.
The Conclusions suggest that there is "growing interest in discussing further a UN statement of universal human rights standards applicable to business." Who it is who wants it is left unanswered, as too is the value another statement would bring to the debate.
In our view, what is needed is more discussion with the Commission on what, if anything, should be done and member States must control any future work that might be identified
The Commission should support the efforts of the Global Compact, ILO and OECD in the promotion of their instruments and the collection of "good practice". They should also give clear recognition to the usefulness of voluntary company initiatives. The Commission should take care to ensure that it does not take any initiative which would weaken any of these current approaches. The Commission could try to identify what, if anything, is really missing from these approaches although care is needed to avoid overlapping or confusing the application of these proven texts.
The Commission could do more in clarifying for all actors what the principles of the UN Declaration on Human Rights mean and to give them tools to help them in addressing human rights issues in the diverse situations in which they arise. More is also needed to help States in giving effect to their international obligations at the national level and employers' organizations, as the representative voice of business, can play a role in national dialogue.
From the international level, care is needed to ensure that nothing is done to hamper State action at national level. Similarly, the Commission should ensure nothing is done which creates economic or trade conditionality linked to human rights to be delivered by business. States need to determine their relationship with each other vis-a-vis international obligations, and business should not be placed in the middle of such relationships.
Yours sincerely,
Antonio PenalosaSecretary-General