Business and human rights: mind the gap

Is there some risk that the current greater attention to the human rights responsibilities of business misses the mark?

Last week here in Oxford I chaired a session at a 1-day meeting on the evolving normative framework on the place of transnational corporations and other business enterprises in international human rights law.

I put aside here all the debates about the form and pace at which further international legalisation might occur in this area.

Instead I return, at risk of repetition, to a steady refrain of this blog.

This is the argument that society is justified in narrowing the 'governance gap', that is in seeking to make the social responsibilities of business actors commensurate with their levels of influence. But it should avoid doing so in ways that tend to obscure the principle that governments are and should be the primary duty-holders. In human rights terms, it is tolerably clear that whatever the responsibilities of non-state actors, the state has certain duties to protect, respect and fulfill human rights -- including by regulating the activities of business actors that have an impact on those rights.

This is a cousin of the argument, also typical of past posts (here), that the current attention to the private sector's role in helping meet sustainable development goals is welcome and/or inevitable, but should not result in shifting the burden from states.

How did last week's meeting prompt this return to something noted in recent posts (see for instance here)?

It seemed to me that some participants at the meeting had lost a certain perspective on the source and nature of the bulk of unfulfilled or violated human rights in the world. At some points some participants painted corporations as responsible for the bulk of unmet needs and abused rights in the world. Now there is undoubtedly a serious mismatch between companies influence and their degree of accountability and responsibility, but they hardly account for the most serious human rights abuses evident in the world today, and are to my mind certainly not obviously responsible for public goods that might fulfill human rights.

Participants' desire to find ways to close the governance gap cannot be faulted, but I wonder if we're seeing something else happening in recent years. In the field I work in, 'business and human rights' has become far more topical, attracting funding for advocacy and capacity-building programmes. This is welcome, especially considering that the issue had been under-scrutinised.

Yet even if one considers 'human rights' to involve the full range of social and economic rights (such as a right to education) and not just civil and political ones (such as a right to freedom of speech), and even if one acknowledges the huge influence that business entities have in the world and on the shape of its governance, this does not alter the facts. The great bulk of the aggregate of abused or unfulfilled rights in the modern world result from the acts or omissions of states -- including the omission to regulate abuses from non-state sources such as corporations.

To focus advocacy campaigns on what business should be doing to protect human rights is a justifiable strategic decision for a rights advocacy group. It is after all an area I work on myself. It suffers from widespread lack of awareness on the part of governments, businesses, victims. Yet more than once in recent months I've had the sense that the human rights movement has found a new issue and, frustrated with the intransigence or incapacity of governments, might pursue the wrong point in its growing focus on business and human rights.

The main point is the duties of states, not the responsibilities of corporations. To argue otherwise is ironically to afford business actors far more significance and legitimacy than makes sense for those trying to narrow the 'governance gap.'

Jo

Compliance fatigue and sustaining sustainability

Is the proliferation of disclosure and reporting schemes capable of undermining efforts for more sustainable, responsible business?

Now, it is very hard to refute the merits of the 'disclosure revolution' on environmental, social, and governance (ESG) issues that has come in recent times at least to major Western listed firms.

The merits are fairly obvious. The more we and the market know, the better we can ascribe meaning to a firm's value proposition. The more a firm knows about its own ESG impact (through committing itself to data collection, analysis and disclosure), the better it can address potential disruptions and problems in its operations or supply-chain. Do well while doing good, etc.

The same goes for the proliferation of voluntary, hybrid or other multi-stakeholder, quasi-regulatory schemes for addressing issues ranging from a firm's impact on local insecurity to transparency around revenues paid to host governments.

In this light, the recent announcement by Unilever of a new human rights reporting and assurance framework is good news, and consistent with the due diligence elements of the UN 2011 Guiding Principles on Business and Human Rights.

One would hardly want to curb the energy and enthusiasm evident around institutionalising the responsible business agenda within corporate systems and cultures. Yet it was that announcement that prompts this week's post. Because there seem to be so many schemes and initiatives and regulations and conferences that I imagine the landscape now is becoming somewhat bewildering even to a well-meaning executive within a major publicly-listed firm.

(A related issue is the proliferation of single-issue charity, aid and advocacy groups: that industry now talks about engaging with business but might require some rather hard-headed business strategies to reduce the over-heads and donor fatigue associated with organisational proliferation, and focus instead on delivering social value 'at scale'. But hush -- the same could be said of proliferating blogs...!).

I cannot put a finger on it, but do think there's an issue with this flowering of schemes and initiatives, in terms of strategic considerations relevant to the business sustainability / responsibility agenda, such as the resources and attention-span and goodwill of corporate decision-makers.

Instead of carrying on further, I refer to a post from pre-Christmas 2012 (here), on proliferation and fatigue related to the many initiatives on responsible and sustainable business.

See too this recent piece in The Gaurdian on how over 2,500 different metrics are in use for measuring and reporting supply chain sustainability.

It is true that reporting on 'non-financial' issues can serve a commercial and risk-management purpose and is increasingly being incorporated into core business strategies; it is true that leading firms think beyond compliance to how the sustainability agenda can be an opportunity to create both social and commercial value; it is true that there is a counter-trend to this proliferation, where broader concepts such as 'materiality' are being deployed rather than  endless multi-indicator checklists and indices. It is true that the field is evolving and emerging, and this flowering of schemes and requirements may settle into something more sustainable and manageable without becoming complacent or quieted.

Yet this proliferation phenomenon is relevant (or is perceived as relevant) to compliance burden and cost, and so to the competitiveness of responsible business and finance (see here, a past post on regulation and values amid perceived strategic competition for access to markets and resources).

Now I believe there is no necessary trade-off between being responsible and being competitive when investing in developing regions. Indeed in time one might only be competitive through being responsible (and being seen that way).

Nevertheless the perception remains in those places inside firms and funds where it matters.

Those interested in promoting sustainable and socially responsible business practices ought to reflect more, I think, on whether the proliferation of schemes and reporting processes is confusing 'the means' with 'the ends' in ways that do not advance the end goals. 

Jo

See too this past post reflecting on who the audience is for corporate sustainability communications.

'Business for Peace'

What drives current expectations that the private sector will play a more direct role in ensuring more peaceful societies?

This week's UN Global Compact 'Business for Peace' event in Istanbul is part of a growing field, as it were.

This field is dedicated to exploring the unrealised potential for business entities, communities and actors to contribute appropriately -- in more explicit, direct or deliberate ways -- to conflict prevention, mitigation or resolution in particular situations or more generally, and especially in fragile or divided societies.

This is the topic of my forthcoming book Regulating Business for Peace by Cambridge Univ. Press. There is a big, complex and evolving research and policy agenda here. There are plenty of ways into the debate, too, from practically-minded policy prescriptions on how businesses (and their financiers, insurers, etc) can be more conflict-sensitive in their operations and supply-chains, to understanding what incentives might help to promote responsible but competitive investment in fragile states.

These issues are topical, and highly relevant in much of sub-Saharan Africa. I could blog on, book and beyond, but instead think one observation is important. Much of the 'Business for Peace' / business and peace / business and conflict debate focuses on what business actors should do more or less of or do differently, and under what circumstances. To my mind this partly misses the issue.

This focus on business responsibilities or opportunities to help promote or consolidate peace is driven by various things, and is part of a wider shift in the expectations of business in society. In large part it is driven by recognition that more can be drawn out of the peace-relevant influence, incentives, impacts and attributes of the private sector; in some ways it is driven by business leaders' own sense of the need for the private sector to be more proactive in ensuring the sorts of peaceful, prosperous societies conducive to sustainable growth.

Yet what can be lost in this focus, and at events such as Istanbul, is that the proper way to frame this issue is not 'what can business do for peace and how' but surely 'what must public policy do to maximise the scope for business to contribute to peace'.

This is really reiterating an earlier post this year: here. It also is a theme of other posts that reflect on how business has gone from being an ignored stakeholder in the development agenda, to a presumed panacea for developmental problems.

To express caution on taking 'business for peace' too far is not to deny the scope for business actors to do more to mitigate conflict risk and maximise social cohesion. It is not to bring everything back to policy or make any worthwhile initiative contingent on government action.

Instead it is to recognise that the greater focus on the role of business is no substitute for recognition that business has limited scope, incentives, legitimacy (etc) for peace-building. The growing enthusiasm for realising business's unmet peace-building potential should thus not obscure that the primary question is a public policy one; the primary responsibilities rest with governments; any failure by business to contribute more positively (or less negatively) to peace is ultimately a public policy failure.

Jo