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Making the Business Case for Human Rights

The Human Rights Context

The Global Agenda Council on Human Rights  has selected the promotion of the United Nations Guiding Principles on Human Rights and Business as its primary strategic goal for 2012. This strategic goal was chosen for three reasons. First, the impact of businesses on human rights is an issue of increasing concern to all the world’s citizens, governments and businesses. Second, the UN Guiding Principles are the first definitive international framework to address this challenge. Third, the institutional credibility of the Guiding Principles represents a significant opportunity for businesses to advance their social responsibility and long-term value-creation.

Every company in every industry sector has the potential to affect human rights. Energy companies purchase large tracts of land that may be inhabited by indigenous peoples or collectively owned by rural communities. Technology and apparel companies employ large numbers of workers in factories that may not provide adequate wages or working conditions. Manufacturing companies sell equipment and tools to foreign governments that may apply them to suppress dissent or monitor political enemies. Companies of all kinds make products that are intentionally or unintentionally misused to cause harm.

In recent years, more attention has been paid to the human rights impacts of corporations around the world. From large-scale labour violations to collusion with authoritarian regimes, multinational corporations can no longer claim that “human rights are not our business.”

The increasing scrutiny of companies has been accompanied by an increasing effort by companies to safeguard human rights throughout their operations. Hundreds of multinational companies have an explicit human rights policy or business guidelines, and refer to human rights in their codes of conduct and compliance monitoring. Dozens of industry associations have developed codes of conduct and disseminated best practices with regard to business operations in challenging environments.

As these efforts have spread to new sectors and regions, companies around the world are increasingly coming to the realization that human rights, far from being an undue burden on business, are a powerful tool for developing stakeholder relationships and building long-term value.

This report provides an introduction to the Guiding Principles, followed by a description of how the Council intends to work toward their promotion in 2012 and beyond.

The UN Framework and Guiding Principles on Human Rights and Business

In the second half of the 20th century, a number of international institutions were established to develop and enforce human rights standards. The most prominent of these, the United Nations, has passed dozens of conventions and treaties mandating standards on issues ranging from racial discrimination to child soldiers, and has implemented a number of mechanisms to hold states accountable for the behaviour of their leaders and the conditions of their populations.

These institutions, however, were not built to look into the actions of private-sector actors. For decades, multinational companies operated in a “governance gap”: They were international, so domestic laws could not fully apply; and they were privately held, so international laws did not apply.

Beginning in 2006, the United Nations appointed a Special Representative to investigate this gap and propose a framework to close it. This effort crystallized with the unanimous Human Rights Council endorsement of the Protect, Respect and Remedy Framework in 2008 and its accompanying Guiding Principles for implementation in 2011.

The UN “Protect, Respect and Remedy” Framework

Developed in consultation with governments, businesses and civil society organizations around the world, The UN “Protect, Respect and Remedy” Framework  is a globally agreed roadmap for all actors to address the impacts of businesses on human rights. The Framework consists of a series of principles that define the responsibilities of all actors who have the power to impact human rights in business operations.

  • First, the Framework reaffirms that the protection of human rights ultimately remains the obligation of governments. Human rights laws were written for governments, and states bear the duty to protect the human rights of their citizens.
  • Second, regardless of the country, industry or context, all companies have the responsibility to respect human rights. Even if a state does not live up to its responsibility to protect the rights of its population, companies must “do no harm”: That is, they must refrain from infringing upon human rights in their direct operations and take steps to prevent or mitigate human rights risks among their suppliers and business partners.
  • Third, everyone—governments, businesses and civil society organizations—must work to ensure that victims of human rights abuses by companies have access to remedy—their cases must be heard and addressed by strong, accessible institutions.

The UN Guiding Principles

In 2011, the United Nations endorsed a set of Guiding Principles that explains how the Framework may be implemented, and gives concrete recommendations for companies and governments to work toward ensuring that human rights are upheld in business operations. The Guiding Principles provide specific procedures for companies to assess risk, develop policies and implement procedures toward this goal.

The core recommendation of the Guiding Principles is that all companies must perform human rights due diligence to determine the areas where they affect human rights, and must put in place safeguards to prevent and mitigate negative impacts.

Human rights due diligence can be thought of as three interlinked components:

  • Headlights: Processes that identify the human rights risks companies face in their countries of operations and industry sector. This means incorporating human rights into risk assessment, company policies and community engagement before challenges become abuses.
  • Brakes: Procedures that prevent violations before they occur. This includes training of managers and including decent work practices in supplier contracts.
  • Seat belts: Procedures that mitigate negative impacts in the event that a violation occurs. Under the Guiding Principles, this could mean hearing community grievances about local land use, or instituting a policy of restitution in case child labour is found.

Together, the UN “Protect, Respect and Remedy” Framework  and the Guiding Principles define duties and provide recommendations for companies to safeguard human rights in all sectors and all geographic regions.

The World Economic Forum Global Agenda Council on Human Rights Strategy and Activities

The Council works for the promotion of the Guiding Principles in three ways:

  • Identify barriers related to the uptake of the Guiding Principles: For the Guiding Principles to reach their potential, they must be disseminated and applied in a wide range of businesses. The Council aims to identify the factors (whether substantive, micro or macro) that prevent companies from incorporating the Guiding Principles into their operations.
  • Use the World Economic Forum platform to gain wider support: The World Economic Forum is among the world’s most powerful actors for convening leaders and legitimizing new concepts in the role of business to advance social good. The Council aims to work with all companies—Forum members and beyond—to ensure that all relevant actors understand and promote the Guiding Principles as a driver of social responsibility and long-term value creation.
  • Make the business case for the Guiding Principles: For companies, implementing the Guiding Principles is not just good social responsibility, it is good business. Assessing human rights impacts builds the capacity of businesses to react to their operating environments, and builds relationships with stakeholders that contribute to sustainability and profitability. Similarly, states, consumers and civil society organizations will gain from an environment where businesses know—and show—their human rights responsibilities.

These strategic work streams link human rights to a number of issues that are already on the World Economic Forum agenda, namely the role of business in society, supply chain and risk management, as well as a number of industry sector agendas, including technology and mining and metals. The Council organized a private event during the World Economic Forum Annual Meeting in Davos in order to use the Forum platform and the synergies with other Global Agenda Councils to promote the UN Guiding Principles. The UN High Commissioner for Human Rights and companies such as Microsoft, SABMIller and Standard Chartered attended the private meeting to discuss human rights and business. The Council provided a concise introduction to the Guiding Principles, and then discussed key challenges related to their uptake. Companies highlighted mainstreaming human rights in risk management, sustainable supply chains and raising awareness among senior management as the key issues they face. A key take away from the meeting was that the Guiding Principles remain relatively unknown among businesses.

This reinforced the Council’s earlier decision that it should continue to focus on the dissemination and promotion of the Guiding Principles in its 2012-2013 session as well. The challenge of human rights and business cannot be tackled in only one year and the window of opportunity afforded by the recent adoption of the UN Framework and Guiding Principles requires prompt and focused action. Other activities include linking pro-actively with other Global Agenda Councils to promote dissemination and uptake of the principles.

The impact of business on human rights is undeniable. At the same time, the potential of business to enrich the lives of communities, consumers and employees is limitless. The Council, by linking international business leaders to newly established international principles and frameworks, aims to unlock this potential.

Disclaimer

The opinions expressed here are those of the individual members of the Council and not of the World Economic Forum or any institutions to which they are affiliated.