C Explanatory memorandum by Mr Elzinga,
rapporteur for opinion
1 Human rights – a core business of the Council
of Europe
1. The Council of Europe and its Parliamentary Assembly
can take pride in the vast work accomplished over the last sixty
years in upholding human rights in Europe. In parallel, significant
progress has been made beyond Europe as an array of international
treaties, frameworks and mechanisms in this field were put in place. However,
the evolving international context reveals the need to review both
our understanding of human rights and the effectiveness of human
rights protection.
2. Mr Haibach’s report rightly points out the growing importance
and influence of business entities in that respect. It describes
the concept of corporate social responsibility and presents a comprehensive
inventory of existing international legal instruments addressing
the issue of businesses’ responsibilities towards society, in particular
on human rights. The fact that most of those instruments are not
legally binding for enterprises – big or small, national or multinational
– reflects the absence of a global consensus for stronger regulatory frameworks.
3. Mr Haibach’s analysis concludes that although “there is a
growing awareness of the impact that businesses can have on human
rights”, “existing frameworks do not provide adequate guidance to
businesses …”, “nor do they provide adequate remedies to victims
where abuses occur”. He also notes that there is an imbalance in
the scope of human rights protection for individuals and businesses
vis-à-vis the European Convention on Human Rights, that the case
law runs ahead of current regulatory frameworks and that human rights
violations by European companies in third countries, in particular
outside Europe, cannot be properly investigated by either national
courts or the European Court of Human Rights. This speaks of loopholes
in the existing legal set-up across Europe that need to be remedied
if Europe wants to lead by example. What other body should take
action if not the Council of Europe for which human rights are its core business?
2 The need for stronger European legal frameworks
for business and human rights
4. It has been argued that ethically sound corporate
behaviour is good for enterprises’ image/reputation and profitability,
hence making it unnecessary to resort to mandatory norms. This assumption
takes inspiration from the traditional free market theory where
self-regulation of the market is favoured over state interventionism and
is deemed sufficient to ensure fair competition between optimally
informed market players. The recent outbreak of the financial-economic
crisis has shown that both the market’s “invisible hand” and regulatory oversight
by states can fail dramatically, thus inflicting serious damage
to society. We have learned that we need better regulation and better
oversight of corporate behaviour at national and supranational levels.
Now is a good time to rethink our systems of checks-and-balances
with regard to the corporate sector in terms of ethics, including
on human rights.
5. Already in 2004, the Assembly, alarmed by a series of corporate
scandals and eroding public confidence in the economic system, warned
that “these scandals reflect a broader breakdown in the corporate
culture” which “… will require not only legislative change but also
a broader cultural response”.
Note Among the cultural changes
thus called for were proposals concerning the development of a culture
of integrity and good corporate governance towards the harmonisation
of corresponding legislation and practice. From a Council of Europe point
of view that necessarily implies measures for fostering transparency,
accountability and ethical behaviour, also as regards human rights.
Even though some measures were taken, those steps proved to be “too
little and too late” to rectify the eroding balance of the economic
system.
6. Furthermore, on the occasion of the Assembly’s first debate
on the state of human rights and democracy in Europe, in 2007, the
Economic Affairs Committee
Note stressed
the manifold nature of human rights – covering also economic and
social rights – that all together enable people to lead meaningful
lives with dignity. It therefore pleaded for the strengthening of
the (revised) European Social Charter – the counterpart of the European
Convention on Human Rights (ECHR) in the field of economic and social
rights – by considering the possibility to open its complaints procedure
to individuals as is the case with the ECHR. This call remains valid and
pertinent. It should be reconsidered as the Council of Europe is
undergoing a major structural reform which could pave the way to
a more ambitious approach to the implementation of treaties in general
and the Social Charter in particular. Your rapporteur would like
to call to mind a recent meeting of the Secretary General of the
Council of Europe with the European Committee of Social Rights where
Mr Jagland highlighted the indivisibility of human rights, the complementarity
of the Charter and the ECHR, and the insights that can be drawn
from the (revised) European Social Charter framework.
7. In this context, your rapporteur wishes to recall the ILO’s
Decent Work Agenda
Note which promotes
a balanced and integrated approach towards the pursuit of productive
employment and decent living for all through means that may differ
from country to country, reflecting national priorities and capacities.
Through their powers to create or destroy jobs, multinational enterprises
exert a strong influence over employment, wages and working conditions.
They should do their utmost to implement core labour standards wherever
they operate and to resist the temptation of depressing wages or
working conditions (“social dumping”) in third countries. Council
of Europe member states should take a clear position on this issue,
in particular in their dealings with non-European countries at state-to-state
level (e.g. development assistance programmes and export promotion
schemes) and through regulations applicable to multinational enterprises
registered in these states but operating abroad.
8. Moreover, we should recall this Assembly’s invitation to the
governments of the Council of Europe member states to consider drawing
up an additional protocol to the ECHR recognising the right to a
healthy and viable environment.
Note If implemented, such
a protocol could clarify the liabilities of businesses towards society
in terms of environment and human rights.
9. Your rapporteur is convinced that, if the Council of Europe’s
action is to have an added value in the process of strengthening
human rights frameworks in Europe, it should be ambitious. The Parliamentary Assembly,
acting as the Organisation’s generator of ideas and proposals, should
put forward a full range of legislative measures that the Council
of Europe and its member states could take. This applies also to
the feasibility of preparing a binding legal instrument such as
a convention or an additional protocol to an existing convention/treaty.
10. To those hesitating about the ways to compel businesses to
take serious account of human rights fundamentals, we could suggest
to look into the mechanism put in place by the OECD’s Convention
on Combating Bribery of Foreign Public Officials in International
Business Transactions (“Anti-Bribery Convention”). This convention,
together with two related OECD recommendations and rigorous peer
review process, requires all OECD countries to implement a comprehensive
set of measures to prevent, detect, investigate, prosecute and sanction
bribery of foreign public officials by individuals and companies.
11. The Council of Europe could either work together with the
OECD on a new legal instrument relating to business and human rights,
or use the relevant OECD’s know-how and experience to prepare its
own legal instrument. That the two organisations can successfully
work together is proven by the fact that they negotiated and concluded
a joint Convention on Mutual Administrative Assistance in Tax Matters
(CETS No. 127) and a subsequent additional Protocol (CETS No. 208)
which, by the way, opens the convention for accession to non-member
states of these organisations.
Note
12. Moreover, as the process for updating this joint convention
and the SWIFT scandal
Note have shown, there is also a need
to modernise another Council of Europe instrument – the Convention
for the Protection of Individuals with regard to Automatic Processing
of Personal Data (ETS No. 108). Indeed, it is necessary to ensure
better protection of the right to privacy against the background
of swelling cross-border data flows over the Internet, increasing
involvement of enterprises in the handing of personal data, growing
use of surveillance technologies and a push for greater transparency
in order to combat tax evasion, copyright violations and other crime.
3 Conclusion: the Council of Europe must lead by
example
13. In conclusion, new economic realities and legislative
challenges arising from globalisation compel European decision makers
to re-examine the design of human rights protection in Europe and
beyond as far as the activities of the corporate sector are concerned.
There is a widening understanding of what constitutes human rights
and the growing awareness of the interaction between human rights
and the business activities, trade and investment flows of transnational
enterprises. The Council of Europe should cover the existing gaps in
human rights coverage by acting swiftly and ambitiously, notably
in considering the elaboration of a mix of hard and soft law instruments.
In a world in which business activities are increasingly transnationally
organised, the Council of Europe must lead by example and play its
part fully in proposing strong fixes to current judicial frameworks
where they lack effectiveness to protect human rights and to guide
businesses effectively on human rights.
