C Explanatory
memorandum by Mr Haibach, rapporteur
1 Introduction
1. On 30 June 2008, members of the Parliamentary Assembly
submitted a motion for a recommendation on human rights and business
(
Doc. 11673). The Committee on Legal Affairs and Human Rights appointed
me as rapporteur at its meeting on 10 and 11 November 2008.
2. On 31 May 2010, in order to determine the scope of future
action of the Council of Europe in this area, the committee held
an exchange of views with the following experts:
- Professor Emmanuel Decaux, Vice-Chair
of the French NationalConsultativeCommission onHuman Rights(Paris)
- Professor David Kinley, Chair in Human Rights Law, University
of Sydney (Australia)
- Dr Jernej Letnar Černič, European University Institute
(Italy)
- Dr René Schmidpeter, Project Manager, Corporate Social
Responsibility Programme, Bertelsmann Stiftung (Germany)
3. The issue of “human rights and business” is closely related
with that of globalisation, which not only contributes to raising
living standards all around the world, but also poses new challenges
to the effectiveness of international human rights protection.
4. Due to globalisation, since the 1960s and 1970s businesses
have grown in power and influence. Indeed, many of the largest multinational
corporations have revenues greater than the gross domestic product
(GDP) of some states. A study conducted in 2000 found that multinational
corporations accounted for 29 of the world’s 100 largest economic
entities. Royal Dutch/Shell was larger than the GDP of Ukraine and
the tobacco giant Phillip Morris was comparable in size to the GDP
of Slovakia, Croatia or Luxembourg.
Note
5. There can be no doubt that businesses, be they national, European
or multinational corporations bring enormous economic benefits to
society through creating jobs, producing economic growth, generating
tax revenues and transferring skills and technology. In doing so,
companies can help to reduce poverty and have the potential to assist
in the realisation of a great number of human rights.
Note
6. Despite this potential to have a positive impact, in recent
years businesses, and multinational corporations in particular,
have become the target of intense scrutiny and criticism for their
impact on human rights in developing countries. For instance, allegations
of the use of child labour in the garment manufacturing industry;
complicity in state violations of human rights in the oil industry;
and concerns over the right to privacy and large telecommunications
companies are merely a sample of the challenges that globalisation
poses to the effectiveness of current frameworks on international
human rights protection. Nevertheless, concerns about human rights
and business are not limited to developing countries and can also
have a real impact on people living within Council of Europe member
states.
7. Traditionally, the duty to protect human rights has rested
with the state.
Note There
is increasing legal recognition, however, that private individuals
and legal persons, including businesses, have responsibilities. Indeed,
there has been a slow shift away from a purely state based model
of international law in this realm. Case law of the European Court
of Human Rights, the Court of Justice of the European Union and
the International Criminal Tribunals for the former Yugoslavia and
Rwanda have indicated that private individuals and legal persons,
such as businesses, can play a role which is as important as states
in some respects.
Note
8. Over the past few decades, a number of initiatives, frameworks
and toolkits have been adopted at the international and regional
level in an attempt to define the responsibilities that businesses
have towards society and, in particular, towards human rights. This
report analyses the effectiveness and the ability of these initiatives
to protect human rights. It subsequently looks at recent case law
on business and human rights. Finally, it assesses whether there
is a role for the Council of Europe in developing co-operation between
its member states on business practices and human rights.
2 Impact
of business on human rights
2.1 Outside the European
space
9. Businesses have the potential to impact upon all
internationally recognised human rights,
Note anywhere
on the planet. Over recent years, non-governmental organisations
(NGOs) and the media have highlighted many cases where subsidiaries
of European-based multinational corporations are either alleged
to have committed, or have been complicit in, human rights abuses.
This has included unfair labour conditions, abuses by security forces,
displacement of indigenous communities and environmental destruction.
The following examples are illustrative of this.
10. The European Centre for Constitutional and Human Rights, an
NGO based in Germany, has recently filed a legal opinion, in the
form of an
amicus curiae brief,
with a criminal tribunal in Argentina. The case is against Mercedes-Benz
Argentina SA a subsidiary of the German based Mercedes Benz. The
European Centre for Constitutional and Human Rights alleges that
the company was involved in the kidnapping and enforced disappearance
of unionised members of its workforce during the military dictatorship
between 1976 and 1983.
Note
11. A group of claimants from the Ivory Coast recently brought
a claim in the United Kingdom against the oil trader Trafigura.
The United Kingdom-based company chartered a ship, the
Proba Koala, in 2006, which allegedly
took toxic waste to the country’s capital, Abidjan. The waste was
subsequently dumped in various locations across the city. About
100 000 people sought medical treatment and 15 deaths were reported,
Note representing
a serious violation of the right to life.
Note Ultimately,
Trafigura opted to settle the case out of court (without making
any admissions of liability) and agreed to pay £1 000 to each of
the 30 000 claimants.
Note
12. Royal Dutch/Shell is a multinational corporation which has
its headquarters in the Netherlands and its registered offices in
the United Kingdom. In June 2009, it agreed to settle a case for
US$15.5 million which had been brought against it in the United
States
Note for
alleged complicity in murder, torture and other human rights abuses
in the 1990s in Nigeria.
Note Security
forces were alleged to have beaten and shot at local people protesting
against the devastation of their property for the construction of
a pipeline.
Note
13. The huge environmental disaster in the Gulf of Mexico caused
by British Petroleum shows that even governments of powerful states
such as the United States of America are relatively helpless in
the face of the sheer scale of the impact of negligent behaviour
of multinational corporations.
Business impact on human rightsNote
14. The following table has been reproduced from Professor
John Ruggie’s report to the Human Rights Council entitled “Protect,
Respect and Remedy: A Framework for Business and Human Rights”.
The table is used to support Professor Ruggie’s proposition that
businesses can impact upon all internationally recognised rights.
It was based on a study of 320 cases from all sectors and regions
of the world for alleged corporate related human rights abuses.
These cases were reported on the Business and Human Rights Resource Centre’s
website from February 2005 to December 2007.
Labour rights
|
Freedom of association
|
Right to equal pay for
equal work
|
Right
to organise and participate in collective bargaining
|
|
Right to equality at
work
|
Right to non-discrimination
|
Right
to just and favourable remuneration
|
|
Abolition of slavery
and forced labour
|
Right to a safe working
environment
|
Abolition
of child labour
|
|
Right to rest and leisure
|
Right to work
|
Right
to family life
|
Non-labour rights
|
Right to life, liberty
and security of person
|
Right to peaceful assembly
|
Right to an adequate
standard of living (including food, clothing and housing)
|
|
Freedom from torture
or cruel, inhuman or degrading treatment
|
Right to marry and form
a family
|
Right to physical and
mental health; access to medical services
|
|
Equal recognition and
protection under the law
|
Freedom of thought, conscience
and religion
|
Right to education
|
|
Right to a fair trial
|
Right to hold opinions,
freedom of information and expression
|
Right to participate
in cultural life, the benefits of scientific progress, and protection
of authorial interests
|
|
Right to self determination
|
Right to political life
|
Right to social security
|
|
Freedom of movement
|
Right to privacy
|
Right to the peaceful
enjoyment of possessions
|
15. Although the cases cited above are perhaps the most
shocking, the potential negative impact that businesses can have
on human rights is not limited to large multinational corporations
operating in far off, mostly developing countries. There are many
other layers to the issue of how businesses affect human rights, which
are relevant to Council of Europe member states. The following are
examples of alleged violations by businesses of human rights protected
by the European Convention on Human Rights (ETS No. 5, "the Convention")
within Europe.
2.2 Right to respect
for private and family life in the information age
16. Article 8 of the Convention enshrines the right to
respect for private and family life. One of the toughest questions
is how can this right be protected in the information age? For instance,
on the one hand the Internet has the potential to raise awareness
on human rights issues in places where freedom of expression has hitherto
been limited. On the other hand, however, the Internet also poses
severe challenges to the right to respect of private life within
Council of Europe member states. There is a perennial debate
Note about how
much personal information Internet service providers and companies
operating search engines, such as Google, Microsoft and Yahoo, should
be able to store about their customers. What are the limits to the
amount of information that they are able to pass on to third parties,
including governments, about their service users? How long should
companies be able to store information for? To what extent should
the people concerned be protected?
17. Other forms of modern communications technologies cause similar
problems. In the United Kingdom there have been allegations of journalists
from newspapers tapping the phones of celebrities including a footballer’s
wife
Note and
members of staff working for the Royal Family.
Note Such
activity is, in fact, illegal, and one private investigator that
provided information to a daily newspaper was jailed in 2007.
Note However,
these cases raise questions about communications technologies and
the methods used to find out information and therefore intrude on
the private lives of private individuals. They also raise the issue
of complicity of businesses that own these newspapers in human rights
abuses when they purchase such information and what responsibilities
they have to respect private people’s private lives.
Note
18. Similarly, there was an outcry in 2009 when Google launched
its Street View service across Europe. The service allows Internet
users to have a 360° view of streets anywhere. Although Google took
some measures such as blocking the faces of passers by, there were
serious fears about privacy. The Greek Government prevented Google
from launching the service in Greece
Note and
the Swiss Government is in the process of taking Google to court
to establish whether the service is indeed a violation of the right
to privacy.
Note
19. All member states of the Council of Europe, of course, have
a duty to protect the rights of individuals in their jurisdiction
under Article 8 of the Convention, but it has yet to be established
how states are able to ensure that companies respect this right
when very often individuals voluntarily disclose so much information
about themselves on the Internet.
2.3 Gagging freedom
of expression
20. Article 10 of the Convention enshrines the right
to freedom of expression. There have been cases where businesses
have attempted to stifle this right. A well-known example of this
was where McDonald’s issued a writ for libel against two members
of London Greenpeace for distributing leaflets entitled “What’s
wrong with McDonald’s?” in the 1980s.
Note The
defendants were refused legal aid and therefore represented themselves. The
United Kingdom’s Court of Appeal found the defendants guilty and
ordered the defendants to pay £76 000 in damages between them to
McDonald’s. The defendants subsequently brought a case against the
United Kingdom to the European Court of Human Rights
Note where it was held that there
had been a breach of Article 6 – the right to a fair trial. This
in itself gave rise to a breach of Article 10 due to the procedural
unfairness caused by two relatively low paid individuals having
to defend themselves against a large multinational corporation and
subsequently being found to have committed libel against the company
and obliged to pay it disproportionate damages.
21. More recently, following an out-of-court settlement by Trafigura
for the victims of the toxic waste dumping in the Ivory Coast,
Note the
Guardian,
a British daily newspaper, was threatened with legal action by the Trafigura’s
lawyers if it printed a Parliamentary Question on the subject.
Note This
caused a controversy and raised concerns on the power of companies
to obtain injunctions in a case which would have essentially restricted
a democratically elected Member of Parliament’s right to freedom
of expression. Eventually the Question was published, albeit with
a delay, and the lawyers sought no further action.
22. Both cases highlight that there are legal mechanisms available
to companies to limit freedom of expression. While in some cases
there may be a genuine and justifiable reason for this, decisions
to limit this right should always be taken with great caution.
2.4 Preventing pollution
and environmental damage
23. Businesses can have a devastating impact on the environment,
which can affect the health and well-being of those living in the
areas where certain companies operate. This issue has been dealt
with by the European Court of Human Rights on a number of occasions.
Note For example, in
Taşkin and others v. Turkey, a gold
mining company had used dangerous levels of cyanide to extract gold
from below the earth’s surface. This had an impact on residents
living in the vicinity and following unsuccessful attempts to get
the Turkish State to act against the company, a case was brought
to the Court. It was held that the company had polluted the local environment
to such an extent that the detriment to the applicants’ health and
well-being reached a sufficient level to bring it within the scope
of the Article 8 right to a private and family life.
2.5 The public/private
law divide
24. Over the past few decades, governments have increasingly
privatised functions that have traditionally belonged to the state
such as law enforcement, health care, education and telecommunications.
In some cases this has led to, what Professor Clapham describes
as, the “evaporation of controls which were placed on the sectors
to ensure respect for civil and political rights”.
Note An example of this is the
increasing use of private security companies to run detention centres
and prisons. In the United Kingdom, such companies are used to run
immigration detention centres and provide escort services for removal
and deportations of immigrants where Article 5 of the Convention,
right to liberty and security of person comes into play.
Note Where cases have been brought against
the Secretary of State for Home Affairs under the Human Rights Act
1998,
Note the government
department has argued that they are not responsible for the actions
of private companies.
Note The use of private companies
in this sort of sector raises the question of what are the limits
of state functions and where the duty to protect human rights ends.
This is an ongoing debate in the United Kingdom that the courts have
been grappling with
Note but it
has an impact on all member states of the Council of Europe as private companies
deliver services that were once the preserve of the state.
25. The European Court of Human Rights has addressed this issue
in several cases, too. In
Costello-Roberts
v. the United Kingdom, the fact that a school, whose
corporal punishment practices were in question, was a private establishment
did not stop the Court from holding the United Kingdom responsible
in principle for the policies implemented by the school.
Note Similarly, the fact that the Heathrow
airports authority had been privatised did not exonerate the United
Kingdom of potential responsibility for nuisances caused by equally privately
owned aircraft.
Note In the case
of
Calvelli and Ciglio v. Italy,Note the European
Court of Human Rights stressed that the principles concerning states’
“positive obligations”, apply in the public health sphere too and require
states to make regulations compelling hospitals, whether public
or private, to adopt appropriate measures for the protection of
their patients’ lives. Furthermore, in the case of
K.U. v. Finland, the European Court
found the Finnish Government responsible for a violation of the
applicant’s private life (Article 8 of the Convention) because of
a failure to put in place a system to protect children from being
targeted by paedophiles via an Internet dating site.
Note
26. This brings the discussion full circle and back to the international
level. The increased use of controversial private military and security
companies (PMSCs) in areas of armed conflict raises serious issues about
human rights, which has affected a number of Council of Europe member
states. For example, following the conflict in Bosnia and Herzegovina
between 1992 and 1995, DynCorp, a US company, was contracted by the
US Government to provide personnel to the NATO-led Security Forces
(SFOR). The company repatriated some of its employees after it received
allegations that those employees had been involved with purchasing women
for the purpose of sexual and domestic slavery. Ultimately, no prosecutions
were made, despite this being a serious and obvious breach of Article
4 of the Convention, which prohibits slavery and forced labour.
Note
27. Similarly, the use of private military and security companies
in the more recent conflicts in Afghanistan and Iraq, where several
Council of Europe member states have sent forces, has not been without
controversy and companies have been accused of being complicit in
torture, breaching Article 3.
Note Concerns
about the human rights implications of using private military and
security companies has led the Assembly to call for the adoption
of a convention dealing precisely with this issue.
Note
28. The above examples illustrate that businesses can have an
adverse effect on all types of human rights. They also serve to
demonstrate that the issues surrounding business and human rights
in Europe are complicated and any discussion on a framework should
address the following issues:
- European
multinational and transnational corporations and operating outside
the European space;
- companies operating internally (within their country of
incorporation and/or other European countries);
- companies that are providing services that were at one
time seen as functions of the state.
3 Existing international
frameworks and corporate social responsibility
29. Since the 1970s, there have been a number of initiatives
that have attempted to define businesses’ responsibilities towards
society, including human rights. Certain United Nations human rights
bodies (including regional human rights organs within the Organization
of American States and the African Union), have done so; similarly,
there exist trade law and investment rules, including criminal liability
in certain circumstances, with respect to the business and human
rights “agenda”. That said, existing international frameworks are
essentially soft law instruments and are centred principally on
voluntary codes of conduct, which have emphasised the benefits of
corporate social responsibility (CSR) over rigorous legal accountability.
30. CSR is “a concept whereby companies integrate social and environmental
concerns in their business operations and their interactions with
their stakeholder on a voluntary basis”.
Note CSR
can encompass much more than just respect for human rights and extends
to issues such as corporate philanthropy and investment into the
community.
31. Proponents of CSR argue that it can in fact be advantageous
to the companies themselves to create social policies and practices
that go beyond their legal obligations and responsibilities as it
can have a positive impact on the company’s reputation and profitability.
Consumers, for instance, are more likely to buy goods and services
from companies with a reputation for good ethical behaviour.
Note Other
benefits might include an increased sense of loyalty and pride in
the company’s workforce.
Note Social
irresponsibility, such as environmental damage or complicity in
human rights abuses, on the other hand, can lead to bad publicity
and a consumer backlash, thereby undercutting profitability. The
adoption of CSR policies is presented as being the rational economic
choice for businesses and therefore an extensive legal framework
is not required.
32. The CSR approach is the basis behind existing international
frameworks concerning businesses and social issues that are discussed
below.
3.1 The OECD Guidelines
for Multinational Enterprises
33. The Organisation for Economic Co-operation and Development
(OECD) adopted the Guidelines for Multinational Enterprises in 1976.
This was in response to concerns about the impacts of multinational corporations,
based in Europe and North America, establishing manufacturing subsidiaries
in developing countries to take advantage of cheaper labour and
raw materials.
Note The
guidelines are the only comprehensive, multilaterally endorsed code
of conduct for multinational enterprises.
34. The guidelines are voluntary principles and standards that
adhering states
Note undertake to
promote to their businesses and are meant to represent good practice
for companies operating both nationally and internationally. They
were updated in 2000 and cover a broad range of issues in business
ethics, including sustainable development, respect for human rights,
combating bribery, contributing to the local community, employment
and industrial relations.
35. There have been a number of criticisms about the effectiveness
of the guidelines. First, they are vague and lack specificity. For
instance, businesses are expected to “respect human rights of those
affected by their activities consistent with the host government’s
international obligations and commitments.”
Note No
guidance is given, however, on how this can be best achieved and
how companies can prevent themselves from becoming complicit in
human rights abuses by third parties. Moreover, the specific wording
of this principle suggests that companies are able to operate differently
depending on what international human rights instruments the host state
is signatory to. The guidelines are also now slightly outdated and
have been criticised for falling behind voluntary standards adopted
by many business organisations.
Note
36. The guidelines are not legally binding but are overseen by
national contact points (NCPs) established by adhering states. The
NCPs are tasked with promoting the guidelines and producing an annual
report on their implementation. Perhaps the most important role
of these NCPs is to provide consultation, conciliation and mediation
between parties in conflicts and issue clarifications over the guidelines’
meanings.
Note
37. There are many concerns about the effectiveness of NCPs and
the way in which they operate. Not all adhering states have established
NCPs and their function and effectiveness varies from state to state.
In states where they do exist, they are often placed in the government
department tasked with promoting business, trade and investment,
which means there can be a significant conflict of interest.
Note Finally, the NCPs
have little power to take action where they find that a company
has been involved in human rights abuses. Recently, the United Kingdom
NCP upheld a complaint by Global Witness that a United Kingdom-based
company, Afrimex, had not respected human rights by failing to take
adequate steps to abolish child and forced labour in the Democratic Republic
of the Congo.
Note Nevertheless,
the NCP was able to do little other than issue recommendations,
which reportedly were not taken up by other government departments.
Note
38. The guidelines are possibly the most developed monitoring
mechanism that assesses business and human rights. However, they
are not binding and there is no effective mechanism to act on findings
that human rights violations have occurred.
39. The OECD has recognised that there are shortcomings and is
currently reviewing its guidelines.
Note The OECD
has launched an update of its guidelines in June 2010 during the
Roundtable on Corporate Responsibility. There are some significant
proposals on the table: the addition of a chapter on human rights, including
business and human rights; a more consistent approach to human rights
as regards export credit guarantees, and the need to improve the
effectiveness of NCPs.
3.2 The International
Labour Organization’s Tripartite Declaration
40. The International Labour Organization’s (ILO) eight
core conventions encompass four main areas: freedom of association,
ending of forced labour, ending of child labour and ending discrimination
in the workplace. While the ILO Conventions are international treaties
and therefore binding on state parties, there are no provisions
that can be directly applied to businesses themselves.
41. The ILO’s governing body adopted the Tripartite Declaration
of Principles Concerning Multinational Enterprises and Social Policy
in 1977.
Note The
Tripartite Declaration brings together states, businesses and employers
in an attempt to address concerns about the role of multinational
corporations. The principles were most recently updated in 2000
and their aim is to encourage positive contributions from multinational corporations
to economic and social progress.
42. The declaration calls upon multinational corporations to respect
the Universal Declaration of Human Rights, the International Covenant
on Civil and Political Rights and the International Covenant on
Economic and Social Rights. It specifically stipulates that companies
should respect work-related rights such as freedom of association,
health and safety and freedom from discrimination. The declaration
encourages companies to address the grievances of workers and the
setting up of internal dispute resolution mechanisms. It also calls for
a periodic survey on the implementation of the principles.
43. Nevertheless, as with the OECD Guidelines, the implementation
and enforcement of the principles are entirely voluntary. As it
is only a declaration of principles, it lacks the legally binding
status of an international treaty. Besides the naming and shaming
effect of the survey, there are no further mechanisms to ensure compliance.
3.3 The United Nations
Global Compact
44. The United Nations Global Compact was launched in
2000 at the request of the then Secretary-General of the United
Nations, Kofi Annan. The compact is comprised of 10 principles divided
into four sections on human rights, labour, environment and anti-corruption.
Companies are expected to make a general commitment to support,
respect and promote internationally recognised human rights. They
are specifically expected to uphold freedom of association, the
elimination of all forms of forced and compulsory labour, elimination
of child labour and the elimination of discrimination in respect
of employment and occupation. At the same time, companies are admonished
not to be complicit in human rights abuses by the host government of
the state they are operating in.
Note
45. Interestingly, the Global Compact introduced the concept of
“sphere of influence”, whereby companies are encouraged to promote
respect for human rights to other companies that they may work with
including suppliers, contractors and sub-contractors.
46. Companies are invited to sign the Global Compact, which they
can do by sending a letter from the Chief Executive to the United
Nations Secretary-General stating that they wish to join. Subsequently
they are expected to make the Global Compact part of their business
strategies, incorporate it into their decision-making processes
and keep a record of how it is being implemented in their annual
report. By 2008, 4 000 companies had signed up for it.
Note
47. The Global Compact has specifically advocated for the “business
case” for corporate social responsibility. It is based on a voluntary
approach and does not include any form of enforcement, implementation
or monitoring mechanisms. Although a Global Compact board was formed
to bring together business, labour and civil society with UN officials
to provide a strategy and policy advice,
Note such
advice is limited to suggestions and dialogue. While the board can
be useful in creating a culture of rights protection, it nonetheless
lacks teeth to bind companies or states.
48. The Global Compact has been criticised for being an extremely
weak document that has very little impact on business and human
rights
Note and
fears have been expressed that it only serves as a marketing tool
for companies that sign up to it, as there is no verification of
statements made on it in companies’ annual reports.
3.4 The Protect, Respect
and Remedy framework
49. In 2003, the United Nations Sub-Commission on Human
Rights adopted the United Nations Norms on the responsibilities
of transnational corporations and other business enterprises (the
Norms).
Note The
Norms were drafted with strong language, placing an obligation on
businesses “to promote, secure the fulfilment of, respect, ensure
respect of and protect human rights”.
Note This effectively
would have given businesses the same duties as states in certain
areas of human rights in the sense that they are required to positively
ensure that rights were realised in their sphere of control. On
the one hand, the Norms indicate businesses’ general obligations
towards their employees and/or partners, in particular in the area
of non-discrimination (see Rule B). On the other hand, they also
contain more specific obligations such as those related to the right
to security (Rule C), rights of workers (Rule D), consumer protection
(Rule F) and environmental protection (Rule G).
Note
50. The Norms also contained strong provisions against complicity
in human rights abuses. Businesses were expected to “refrain from
any activity which supports, solicits or encourages states or any
other entities to abuse human rights” and to ensure that the products
and services that they created did not contribute to human rights
violations.
Note
51. The Norms were never adopted by the United Nations General
Assembly, due to strong opposition from states and business leaders,
and for some time no progress was made on the international arena.
To move the debate on, Professor John Ruggie was appointed as the
Secretary-General’s Special Representative on the issue of human
rights and transnational corporations and other business enterprises,
with a mandate to find a solution to the failure of the Norms.
52. In April 2008, Professor Ruggie proposed the “protect, respect
and remedy” policy framework as a way of resolving the impasse on
business and human rights.
Note The framework
rests on three pillars:
- the
state duty to protect against human rights abuses by third parties,
including business, through appropriate policies, regulation and
adjudication;
- the corporate responsibility to respect human rights,
which in essence means to act with due diligence to avoid infringing
the rights of others;
- greater access by victims to effective remedies, judicial
and non-judicial.Note
53. The United Nations Human Rights Council unanimously welcomed
the report and have extended Professor Ruggie’s mandate until 2011.
He is tasked with making practical recommendations on ways to help states
protect human rights from abuses involving businesses, and to enhance
access to remedies for those whose human rights are affected. Unfortunately,
as Professor Ruggie recently told a United Kingdom Parliamentary
enquiry, he did not expect that a legally binding human rights treaty
would be drafted at the end of his mandate.
Note
54. The United Nations Special Representative’s recommendations
have been well received but are not without criticism. For example,
Professor David Kinley has suggested that the framework does little
to answer the problem “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”.
Note
3.5 Interstate initiatives
55. Beyond broad international frameworks, there have
been several multilateral attempts, both between governments and
among businesses themselves, to create codes of conduct in specific
sectors. In particular, the problem of PMSCs
Note has garnered international attention
and led to two initiatives: the Voluntary Principles on Security
and Human Rights
Note and
the Montreux Document.
Note
56. The Voluntary Principles on Security and Human Rights were
established as an agreement between the United Kingdom and United
States governments, which the governments of the Netherlands and
Norway subsequently joined. The principles seek to regulate the
use of private security forces that operate abroad but which are
incorporated in these states. The principles encourage companies
to assess the risks of their actions, set clear ethical standards
for their security forces, use force only where necessary and adhere
to the rule of law.
57. Along a similar vein, 17 states and a number of non-governmental
organisations came together in Switzerland in 2006 to sign up to
the Montreux Document. This was an initiative of the Swiss Federal Government
and the International Committee of the Red Cross, to define the
legal obligations of states with regards to PMSCs in international
humanitarian and human rights law. The document seeks to clearly
define the responsibilities of states, which include setting clear
standards for PMSCs and building human rights concerns into contracts.
Furthermore, it recommends that states take into consideration past
conduct of companies when making decisions on contracting and licensing
such companies.
58. Again, both documents are only voluntary undertakings. Under
the Voluntary Principles, companies are supposed to record and report
credible accusations of human rights abuses, but no further concrete
action is required.
59. Similarly, the Montreux Document requests that adhering states
create an authorisation and monitoring system for PMSCs,
Note but it does not have the binding status
to require such action. Although the Assembly has fully supported
the document in
Recommendation
1858 (2009) on private military and security firms and the erosion
of the state monopoly of the use of force, it cannot be denied that
it lacks an effective enforcement mechanism.
Note
3.6 Private sector
agreements
60. It is increasingly common for businesses to publish
their own codes of conduct that are based around CSR. These codes
of conduct outline voluntary goals to which companies aspire and
promise to improve their practices. Most corporate codes of conduct
contain a general commitment to ethical corporate behaviour and often
include promises to protect the environment and to improve health
and safety in the workplace. The advantage of these sorts of codes
of conducts is that companies themselves take an interest in social
issues.
61. Some companies have collaborated with each other to create
codes of conduct, an example of which can be found with the Global
Network Initiative. In 2008, many of the major information technology corporations,
including Microsoft, Google and Yahoo came together with human rights
NGOs and press freedom NGOs to create the Global Network Initiative.
This was an attempt to establish principles to ensure that companies
guaranteed freedom of expression over computer networks and the
right to privacy of their customers.
Note This is relevant
to all member states of the Council of Europe, as the majority of
these companies operate across the continent.
62. Adhering companies have committed themselves to guaranteeing
the freedom of expression and protecting the privacy of their customers
from governments that attempt to violate international human rights standards.
The principles set out guidelines for companies where they are confronted
by government demands for information on customers, removal of content
or restriction of access to websites.
Note Companies
are supposed to take into account the principles in their action
and when negotiating contracts.
63. There is some evidence to suggest that this initiative has
had a positive impact. Prior to the inception of the Global Network
Initiative, Google launched a service in China in 2006. At the time
it made an agreement with the Chinese Government to filter its search
engine services. It announced in January 2010 however, that it intended
to launch an unfiltered service and on 22 March 2010 it started
to redirect its customers in China to servers in Hong Kong.
Note This
represents a case where a company has assisted in the realisation
of the right to freedom of expression.
64. Business for Social Responsibility is another initiative.
It was set up in 1992 to work with its network over 250 companies
to develop sustainable business strategies and solutions through
consulting, research and cross-sector collaboration. It uses its
expertise in the environment, human rights, economic development, transparency
and accountability to guide global companies to promote CSR strategies.
It produces reports and organises training work to advance CSR in
specific areas, which include human rights. It places a particular emphasis
on labour rights, freedom of expression and the right to privacy.
It has recently published a document entitled “Human Rights in a
Wired World: How Information and Communications Technology Impacts
on Human Rights”.
Note The
document analyses the opportunities that information communications
technologies bring on the subject of human rights and at the same
time advises companies of the risks of how these technologies can
be used to abuse human rights.
3.7 Civil society initiatives
65. Perhaps the strongest push for human rights accountability
has come from civil society. Many NGOs have created voluntary mechanisms
for businesses to assess how their actions impact on human rights
and how they measure up to ethical codes of conduct in general.
The Fair Trade movement is an example of these sorts of initiatives.
66. Another example is the SA 8000 label, created by Social Accountability
International.
Note The SA 8000 has basic requirements
that companies signing up to it allow freedom of association, refrain
from using or benefitting from forced or child labour, end discrimination
in its hiring or employment practices, provide a safe and healthy
work environment and treat employees with dignity and respect.
Note Finally,
companies are asked to respect laws on working hours and holidays
and provide all workers with a living wage,
Note which
meets minimum legal and industry standards.
67. What makes initiatives such as the SA 8000 effective is that
they have some form of enforcement mechanism by way of labelling
certificates. Companies have to be accredited and certified as compliant
by an independent organisation accredited by the Social Accountability
Accreditation Services.
Note Companies
are regularly audited and a violation of the guidelines could lead
to the company not having its certificate renewed.
3.8 European Union
initiatives
68. The promotion of human rights is enshrined into the
founding documents of the European Union. Article 21-2 of the Treaty
on European Union states “the Union shall define and pursue common
policies and actions, and shall work for a high degree of co-operation
in all fields of international relations. In order to: consolidate and
support democracy, the rule of law, human rights and the principles
of international law …”. European Union policy is important in the
context of business and human rights as it is host to many of the
largest multinational corporations and, together with its member
states, it is a significant player on the international stage.
69. The European Union has a long history of trying to develop
a policy in the sphere of business and human rights. As early as
1999 the European Parliament advocated developing a legal approach
to CSR for European companies operating in developing countries,
Note a
position that it continues to maintain to this day. Nevertheless,
the European Commission has, until now, preferred a voluntary approach
to CSR.
70. It launched the European Alliance on CSR in 2006, which is
an alliance of European enterprises or companies that express their
support for CSR. It acts as a political umbrella for new or existing
CSR initiatives by large companies, small and medium enterprises
and other stakeholders. The European Commission has emphasised that
the alliance is a political process and not a legal instrument and
companies do not actually need to sign up to it. The European Commission
shies away from imposing legal obligations and attempts instead
to build processes for exchanging best practices, mutual learning
and raising awareness.
71. Of interest, in this connection, is a report which the European
Commission has commissioned with the University of Edinburgh (Scotland).
This relates to an analysis of the legal framework for human rights
and the environment applicable to European enterprises operating
outside the European Union, with a view to contributing to the Ruggie
Report. An interim report
Note was
submitted to the Commission on 8 March 2010, and it is understood
that the definitive version of the text will soon be issued. This
report is likely to take into account a number of recent important
developments on this subject.
72. A document commissioned by the European Parliament has called
upon the European Commission to reconsider its all-voluntary approach
to CSR and has made specific recommendations on how the European Union
should strive for a legally binding international instrument on
business and human rights. It has also recommended that the European
Union Institutions and member states consider establishing judicial mechanisms
whereby individuals can bring complaints of human rights abuses
by corporations before the courts in member states.
Note
3.9 Domestic policies
of Council of Europe member states
73. Many European states have established their own systems
of corporate social responsibility. Although most policies do not
focus on human rights specifically, they have the potential to impact
on them.
74. The German Government has been actively promoting human rights
awareness in the business sector. The Working Group on Human Rights
and Business, comprised of the Federal Government, industry and employers
associations, trade unions and civil society associations, has signed
a joint declaration entitled “International Protection of Human
Rights and Business” affirming the commitment of all its signatories
to the Universal Declaration of Human Rights and other international
human rights instruments.
Note Moreover,
the German Federal Foreign Office and the Ministry for Economic
Development and Cooperation joined the Bertelsmann Foundation’s
project “CSR WeltWeit” (CSR Worldwide) in order to promote social
engagement by German companies abroad and to assist them in tailoring
their CSR activities to the social needs of target countries in
the developing world.
Note
75. Belgium has established a number of CSR related certificates
and labels. A 2002 law created a label for products that have come
from supply chains that respect the ILO core conventions, which
is administered by the Ministry of Economic Affairs.
Note Similarly,
a 2006 law created an “equality and diversity” label for companies that
complied with equal opportunity and diversity laws.
Note
76. The United Kingdom’s Foreign and Commonwealth Office has devised
a Toolkit on Business and Human Rights, which gives guidance to
political, economic, commercial and development officers on international
missions to “promote good conduct for UK companies overseas”. It
is centred mainly on the OECD Guidelines but gives additional guidance
to staff on how to promote human rights within United Kingdom businesses.
77. The United Kingdom’s Companies Act requires directors to “have
regard” to such matters as “the impact of the company’s operations
on the community and the environment”.
Note
78. Many states now have National Human Rights Institutions that
seek to promote human rights across the country. An example of good
practice comes from the Danish Institute for Human Rights. Its chief
objective is to promote and develop knowledge about human rights
on a national, regional and international basis.
Note Its work
includes research, analysis and information dissemination. It conducts
programmes that operate both nationally and internationally. In
1999, the institute initiated the Human Rights and Business Project
in conjunction with the Confederation of Danish Industries, the
Danish Industrialisation Fund for Developing Countries and the Danish
International Development Agency. The project aims to develop concrete
achievable standards for companies operating abroad through its
training and advisory services.
79. Some states have gone further and have attempted to put measures
in place that have a material impact upon businesses that may be
involved in human rights abuses. In certain European states, there
exist disclosure requirements – relating to the investment sector
– which are imposed on pension funds. The Norwegian State Pension
Fund, for example, has publicly withdrawn money from a number of
companies and projects that have been associated with human rights
abuses. The Council of Ethics was established in 2005 to advise
the Ministry of Finance on ethical issues and investment. Its guidelines
state that the ministry may exclude a company from the fund where
there is an “unacceptable risk that the company contributes to or
is responsible for:
- serious
and systematic human rights violations such as murder, torture,
deprivation of liberty, forced labour, the worst forms of child
labour and other forms of child exploitation;
- serious violations of individuals’ rights in situations
of war or conflict;
- severe environmental damage;
- gross corruption;
- other particular serious violations of fundamental ethical
norms”.Note
80. Recently, the International Metalworkers Federation has requested
that the fund divest of shares in Grupo Mexico, a mining conglomerate
for alleged violations of labour rights including preventing employees from
freely associating in Mexico.
Note If the allegations
are substantiated and the Ministry of Finance takes a decision to
divest, it would demonstrate how a company had been financially
penalised for abusing human rights.
3.10 Conclusion: a patchwork
of voluntary initiatives and toolkits
81. Despite these positive steps taken by some governments,
the current international framework for governing businesses in
relation to human rights is extremely weak. It is almost entirely
based on a mixed bag of soft law principles, voluntary corporate
social responsibility initiatives and toolkits, without any effective judicial
mechanisms to ensure that businesses respect human rights. Professor
John Ruggie has argued that:
"[t]he
root cause of business and human rights predicament today lies in
the governance gaps created by globalisation – between the scope
and impact of economic forces and actors, and the capacity of societies
to manage their adverse consequences. These governance gaps provide
the permissive environment for wrongful acts by companies of all
kinds without adequate sanctioning or reparation."Note
82. One of the major problems lies in the reliance on the concept
of corporate social responsibility. The concept has been heavily
criticised because it depends on the assumption that all consumers
are concerned enough about human rights and other social issues
to penalise those companies that are found to have acted irresponsibly.
However, not all consumers take an interest in these issues. While
there has been a marked increase in the sale of fair trade produce,
for example, the impact of the socially conscious consumer appears still
to be somewhat limited.
Note Moreover, consumers
need to have detailed impartial knowledge about what companies’
records are. This may be easy to find for larger companies but that
sort of information is not necessarily available for smaller unknown
ones.
83. This is not to say that there is no role for voluntary initiatives
based on CSR. Indeed it would be favourable for companies to strive
to make their practices better than they are obliged to under law.
However, many authors argue that voluntary initiatives alone should
not be the basis of regulation of business in relation to human
rights. Some argue that the amount of power that has been amassed
by some of the largest multinational corporations should be accompanied
by corresponding responsibilities.
Note There
is recognition that the current system is simply not adequate. Nevertheless,
it appears that few steps will be taken at the international level
in the near future to radically improve current frameworks.
4 Evolving case law
on business and human rights
84. Despite the reluctance of the international community
and individual states to impose a coherent set of obligations on
multinational corporations and other companies in relation to human
rights, there is a growing body of case law, which may ultimately
have an impact on the way businesses operate with respect to human rights.
This section analyses some recently made decisions and discusses
what implications these cases could have on businesses in the future.
4.1 European Court
of Human Rights
85. Under the Convention, contracting states have a duty
to “secure to everyone within their jurisdiction the rights and
freedoms defined in Section I of this Convention”.
Note The European Court of Human Rights’
case law suggests that states not only have a duty to respect the
human rights of those within its jurisdiction but they also have
a positive obligation to take reasonable measures to protect individuals
from violations of their Convention rights by private parties.
Note
86. For example, Article 4 of the Convention prohibits servitude
and forced labour. In
Siliadin v. France,Note the Court held that
the state had failed to fulfil its positive obligations by not having
in place a penal law system which could effectively prevent, prosecute
and punish non-state actors that were involved in forms of trafficking and
slavery.
Note The
case involved a complaint by a Togolese woman who had been trafficked
into France to work as a maid for a French family without pay. The
failure to criminalise these sorts of acts amounted to a failure
to provide a specific and effective protection for victims. In this
sense, the Convention places obligations on states to prevent non-state
actors, including individuals, from infringing upon the rights of
others within their jurisdiction. Moreover, the Court’s judgments
do not only impact upon the defendant state, but also upon other signatories
to the Convention. Following the judgment in this case, human rights
NGOs, including Amnesty International, lobbied the United Kingdom
Government ensuring that domestic legislation was amended
Note to make
it an offence to hold another person in servitude or subject a person
to forced or compulsory labour.
Note
87. Similarly, as discussed above,
Note in
Fadeyeva
v. the Russian Federation; López Ostra v. Spain; and
Taskin and others v. Turkey, the
Court held that there had been violations of the Article 8 right
to a home, private and family life where companies had polluted
the local environment. In these cases, the states concerned had
issued licences or provided subsidies, which had effectively enabled
the offending companies to pollute and damage the health of residents
in the local vicinity. It was therefore the state that had failed
in its positive obligation to protect the applicants’ rights vis-à-vis
the polluting companies. In
López Ostra
v. Spain, the Court found that the state had not succeeded
in striking a fair balance between the interests of the town’s economic
well-being, by granting a subsidy to a tannery company which went
on to pollute. There had therefore been a violation of the applicant’s
right to the effective enjoyment of the right to respect for private
and family life and the home.
88. Businesses themselves are deemed to have rights under the
Convention. Article 1 of Additional Protocol No. 1 of the Convention
(ETS No. 9) states that every “natural or legal person” enjoys protection
of his property. Businesses are considered to be legal persons and
the Court’s case law has confirmed that they have rights under the
Convention.
Note It is sometimes extremely important
that the rights of businesses are respected. For example, in the
Sunday Times v. UK,
Note the
Court held that there had been a violation of a national newspaper’s
right to freedom of expression (Article 10 of the Convention), when
it had been prevented from publishing its opinion on aspects of
a settlement between Distillers, the company that had produced Thalidomide,
and the parents of the children that had suffered as a result of
the drug being prescribed to pregnant women in the 1960s. In these
circumstances, it is important in a democratic society that the
media is able to publish opinions on issues as important as this
and therefore freedom of expression should be upheld.
89. Private individuals, however, are unable to bring cases directly
against businesses to the Court and such complaints would be struck
out as inadmissible if they did. That said, national courts are
not necessarily bound by the same conditions. For instance, the
French
Cour de Cassation has
applied the Convention in cases between private parties. In the
case of
Societé Nikon France SA v. M.
Fredéric,NoteArticle
8 (right to a private and family life) was invoked by the
Cour de Cassation. The case involved
an employee who was dismissed after his employer had read his personal
emails that had been written on a computer provided to him by the employer.
Note
90. This “horizontal”/“inter-individual” effect of the Convention
is referred to as
Drittwirkung (third
party effect theory). It is also applied in Germany to some degree,
where rights that are defined in the German Constitution are considered
to be enforceable against individuals and private companies as well.
Note
91. Although cases can be brought for state failure to protect
an individual’s rights, states are not necessarily under a duty
to protect individuals outside their jurisdiction from the actions
of multinational corporations or other businesses that are incorporated
within a state. The European Court of Human Rights will accept extra-territorial
jurisdiction only in exceptional circumstances and this is only
where the state has effective control of the relevant territory.
Note It
would be interesting to see how the European Court of Human Rights
were to react if an Iraqi citizen were to allege that he had been
tortured by employees of a PMSC that had been contracted by, for
example, the United Kingdom Government in an area where the United
Kingdom had been operating. Similarly, in cases where there is an
allegation that a multinational corporation has been involved in
human rights abuses abroad, recourse to a remedy under the Convention
against a government that has underwritten the multinational corporation’s
activities through its export credit guarantee agency might well
be possible, in certain circumstances.
4.2 Claims under international
human rights law
92. There are some precedents for making businesses subject
to international human rights law. Indeed, the history of holding
private persons accountable for human rights violations dates back
to the Nuremberg trials where British, French and US military courts
convicted a number of German industrialists for assorted war crimes
including the use of slave labour and the plundering of private
property. For example, in 1946, a British military court convicted
the two top officials of a company as accessories to war crimes
after they supplied Zyklon B to the Nazi gas chambers.
Note
93. One of the most interesting manners in which business and
human rights have found their way into domestic legal systems is
through the Alien Tort Claims Act of 1789, in the United States
of America.
Note This one
sentence statute gives US federal courts the jurisdiction over “any
civil action by an alien for a tort only committed in violation
of the law of nations”.
Note
94. In
Doe v. Unocal,
Noteit
was held that companies could be sued for aiding and abetting human
rights violations by a state. The case was brought by Burmese residents
against a US firm, Unocal, and Total SA, a French company, for alleged
human rights violations. This included being subjected to forced
labour, forced displacements, murder and rape by Burmese military
officials in the course of a pipeline construction project. Since
this case was heard, a number of cases have been brought against
large European multinationals for alleged complicity in human rights
abuses including: United Kingdom-based Barclay’s Bank for doing
business with the South African apartheid regime
Note and
Switzerland-based Nestlé for purchasing cocoa and providing services
to cocoa farmers allegedly employing child labour.
Note
95. Many cases have settled out of court, without admissions of
liability being made by the alleged human rights violator, including
in the Unocal case. Rather than creating a detailed body of case
law on the issue of corporations and human rights, the real benefits
in the Alien Tort Claims Act may lie in naming and shaming of corporations
through publicity of a court case. Nevertheless, the act is important
for the purposes of this report because cases are being brought
against European-based companies in the US courts. It demonstrates
that companies need information on human rights, responsibilities
and the risks that they take by disregarding them when they operate
extra-territorially.
96. There have also been some interesting judgments from domestic
courts in Europe on international human rights law and businesses.
For example, in van Anraat, the Dutch courts tried and convicted
a Dutch citizen for complicity as an accessory to violations of
the laws and customs of war. He had supplied chemicals to Saddam
Hussein’s regime in Iraq in the 1980s, which could have been used
in the production of mustard gas. The court related his supply of
chemicals to the use of chemicals in both Iran and Iraq by the regime
in the late 1980s. The defendant was sentenced to seventeen years’
imprisonment. This case demonstrates that international criminal
law is no longer just directed at state agents, but also at businessmen
and companies where it can be proved that they have been complicit
in violations of international criminal law.
Note
4.3 A European “foreign
tort claims act”?
97. European Union Law is composed of regulations, directives
and decisions. Regulations issued by the European Commission or
jointly by the European Union Council and the European Parliament
have direct effect on the national laws of the 27 member states
of the European Union. The Court of Justice of the European Union
(previously known as the European Court of Justice) is the court
of last instance in all matters concerning European Union Law.
Note
98. It is possible to make claims against multinational corporations
registered or domiciled within the European Union, for violations
of human rights under European Union law. Under the European Council’s Regulation
44/2001,
Note concerning the allocation
of jurisdiction in civil and commercial matters, known as the “Brussels
I Regulation”, courts of EU member states are competent to adjudicate
civil proceedings against corporations based in the EU for acts
which have taken place outside the European Union, even if the damage occurred
outside the EU and the victim is not domiciled in the EU.
Note
99. The Brussels I Regulation is different to the Alien Tort Claims
Act in that it allows cases to be brought against companies in all
civil proceedings, whereas the Alien Tort Claims Act can only be
relied on for an alleged violation of the law of nations (customary
international law) upon which can be based a civil claim for damages.
Note
100. The regulation is an interesting development, particularly
in the United Kingdom, which has traditionally been the jurisdiction
where actions against companies in tort law have been brought.
Note In
the past cases have failed on the grounds of
forum
non conveniens principle.
Note Nevertheless,
this principle was rejected by the European Court of Justice in
light of the Brussels I Regulation in 2005 in
Owusu
v. N.B. Jackson.Note Cases
can be brought within the European Union, even where it may have
traditionally been viewed as better if the case was heard where
the damage occurred.
101. The Brussels I Regulation is an important piece of legislation
as it could potentially pave the way for litigants from across the
globe to bring cases against European Union-based companies for
alleged human rights violations by way of civil law. Until now,
few litigants have brought claims on these grounds. One reason may
be lack of knowledge that this legal avenue exists. However, claimants
often lack funding to bring cases against companies and there are
few law firms that offer contingency funding for such cases.
Note A
major problem is that violations may be committed by subsidiaries
or suppliers of Europe-based parent corporations that are legally
distinct entities. If the parent corporation is sued according to
Brussels I Regulation, one would need to establish liability for
a (human rights) violation by the subsidiary, which is very difficult
to prove. Nevertheless, recently, a group of litigants from the
Ivory Coast brought a case against the oil firm Trafigura in the
United Kingdom.
Note The
High Court allowed the case to proceed in November 2006 based on
the ECJ decision in Owusu. Although this case eventually settled
out of court, the High Court’s decision to hear the case demonstrates
how useful the Regulations may become to litigants seeking redress
for human rights abuses committed by companies based in the European
Union operating extraterritorially. Furthermore, the case also shows
that the threat of litigation ensures that large corporations will
choose to settle rather than attracting publicity by going to court.
This suggests that there is a need for both judicial and non-judicial
mechanisms to resolve cases.
4.4 Conclusion: businesses
have responsibilities
102. These examples are a few, of the small number of
cases, where the courts have decided that businesses and private
individuals do have responsibilities to respect human rights. They
demonstrate that even in the absence of a detailed international
consensus on what responsibilities businesses have, some courts
will be willing to impose them on corporations in any event. Case
law is running ahead of current regulatory frameworks, which leaves
businesses open to legal challenges.
5 A European framework
for businesses and human rights
103. There is a growing awareness of the impact that businesses
can have on human rights. However, at the same time existing frameworks
do not provide adequate guidance to businesses on what steps they
can take to ensure that they do not become complicit in human rights
abuses. Nor do they provide adequate remedies to victims where abuses
do occur.
104. Some action is being taken: the OECD has launched an update
of its Guidelines for Multinational Enterprises and the United Nations
Special Representative on business and human rights is due to issue further
guidance in 2011. Nevertheless, it seems unlikely that there will
be an international agreement on the responsibilities and obligations
of business with respect to human rights in the near future. We
are therefore left with a number of frameworks that are simply not
fit to regulate the obligations and responsibilities of businesses
in the 21st century.
105. In the absence of an international agreement, there are calls
from within Europe for governments to begin to unilaterally bring
in measures on business and human rights. Recently, an influential
Parliamentary Committee in the United Kingdom called for the government
to adopt a strategy on business and human rights
Note and the French
Commission
nationale consultative des droits de l’homme has made
similar proposals to the French Government.
Note In a study commissioned by the European Parliament,
the European Commission is urged to change its policies with regards
to business and human rights and to foster accountability for corporate
human rights conduct, including ending the all-voluntary approach
to corporate social responsibility.
Note
106. At the same time, businesses rightly want clarity on what
their obligations and responsibilities are. Google, for example,
has recently called for a discussion about international privacy
standards, which would work to protect everyone’s privacy on the
Internet.
Note Requests
of this sort from businesses may become more frequent as more cases
are filed against corporations both in Europe and the United States
for alleged human rights abuses.
5.1 A role for the
Council of Europe?
107. The Council of Europe’s current human rights and
legal standards cover a wide range of issues of direct relevance
to business activities (property rights, social rights, equality
rights, bioethics, child protection, data protection, anti-corruption
measures and anti-laundering measures) and are recognised as the
most advanced at the international level. The Council of Europe
has long-standing experience in monitoring and implementing these
standards across Europe through its various monitoring bodies that
were established to ensure that states complied with the commitments
they made when contracting to the organisation’s treaties.
108. Some of the Council of Europe legal standards are of relevance
for certain branches of industry. For example, the Council of Europe’s
conventions on bioethics, like the so-called “Oviedo Convention”,
Note which reaffirms the states parties’ commitment
to safeguard human dignity and the fundamental rights and freedoms of
human beings with regard to biomedical research,
Note may directly concern the activities
of pharmaceuticals companies. One of its protocols concerns more
specifically biomedical research,
Note including
pharmaceutical research. It covers the full range of biomedical
research activities involving interventions on human beings and sets
up rules concerning this kind of activities. It also stipulates
that states parties should provide for appropriate sanctions to
be applied in the event of infringement of its provisions.
Note Another
example might be that of the European Social Charter
Note and the
revised European Social Charter.
Note The European Social Charter
and its revised version guarantee a series of rights concerning
conditions of employment and such rights are obviously of direct
relevance to business activities: prohibition of forced labour,
fair, safe and healthy working conditions, protection from sexual
and psychological harassment, freedom to form trade unions, non-discrimination
and others. Although the European Social Charter grants to the states
parties some flexibility in implementing its provisions,
Note this is still
a very important instrument of protecting social and economic rights at
the European level. Its supervisory mechanism, based on a governmental
reporting system, allows a regular, systematic, comprehensive review
of all aspects of national legislation and practice in respect of
the provisions of the Charter accepted by a state.
Note Moreover, the system of collective
complaints implies the participation of civil society actors, such
as NGOs
Note and
trade unions.
109. The remainder of this report explores how the Council of Europe’s
standards could be incorporated into business practices and what
role it may be able to take in relation to human rights and business.
5.1.1 A Committee of
Ministers recommendation?
110. The Committee of Ministers of the Council of Europe
could address a recommendation on human rights and business to the
governments of member states. Using the United Nations Special Representative’s “Protect,
Respect and Remedy” framework,
Note the following are possible areas that
such a recommendation could address: strengthening the state’s duty
to protect, promoting measures aimed at enforcing corporate responsibility
to respect human rights and victims’ access to remedies.
111. Concerning the strengthening of the state’s duty to protect,
there are many realms in which states can have a direct impact upon
businesses without having to regulate companies directly, in particular:
Public procurement
Public authorities purchase goods and services from the private
sector. This gives public authorities a great deal of power to influence
the conduct of businesses in the supply chain. States could commit
to deal only with companies with good human rights records. This
could be a strong tool for imposing respect for human rights on
companies that bid for public procurement contracts.
Ethical investment
Similarly, public pensions and other insurance schemes invest
large amounts of funds. In some states this financial power has
increased recently due to the partial and possibly temporary nationalisation
of banks during the recent financial crisis. Again, states could
commit to only investing in companies that adopt ethical and socially
responsible policies and divest of those that do not. The Norwegian
Government Global Pension Fund could be used as a model.Note
Export credit guarantee agencies
Many governments provide insurance to companies that are involved
in providing a service in another state, in the case of non-payment.
They also provide guarantees for bank loans for such projects.Note Governments could
withhold these services from companies known to have been involved
in human rights abuses abroad.
Strengthening the role of national human rights institutions
Many states now have national human rights institutions that
provide guidance on human rights to governmental and other bodies.
The United Nations Special Representative recommended that the national human
rights institutions consider how they can work more to address alleged
human rights violations by companies.Note The Danish Institute
for Human Rights has been held up as an example of good practice
in this fieldNote and
could be used as a basis for provisions on national human rights
institutions.
112. A recommendation could also encourage member states
to impose direct human rights obligations on businesses. For instance,
it could require member states to criminalise serious corporate
violations of human rights whether they are committed in a Council
of Europe member state or elsewhere.
Note There is some precedent
for doing this: in the United Kingdom, the Corporate Manslaughter
Act 2007
Note provides
that organisations can be found guilty of corporate manslaughter
as a result of serious management failures resulting in a gross
breach of a duty of care. It is the corporation rather than an individual
that is prosecuted under this act. The act therefore seeks to protect
the right to life of individuals enshrined in Article 2 of the Convention.
113. A recommendation could also address the issue of legal remedies
for claimants/complainants in human rights cases against businesses.
Currently, states are required to take appropriate steps to investigate,
punish and redress corporate-related abuse within their territory
or jurisdiction. States could allow individuals to bring cases directly
against companies for alleged human rights abuses extending beyond
the possibility of civil litigation. This could take both a judicial
and non-judicial form.
Note Non-judicial mechanisms may be as important as
judicial mechanisms because, as has been shown in the Trafigura
case, companies are often willing to settle out of court, rather
than attracting bad publicity. Moreover, providing alternative dispute
resolution mechanisms outside the courtroom could allow cases to
be dealt with more quickly.
5.1.2 A convention on
human rights and business?
114. The strongest possible course of action for the Council
of Europe would be to adopt a new convention specifically on human
rights and business. The advantage of such a convention, at least
in theory, would be that it could potentially lay down a set of
regulations that businesses would have to adhere to that is consistent across
all 47 member states of the Council of Europe. A monitoring body
could be established in the same way as for other treaties. It could
also serve as a starting point for any international text that may
be negotiated in the future.
115. Such a convention could include a whole range of issues, such
as some or all the issues discussed above, and take many forms.
116. A convention at its strongest could impose direct human rights
obligations on businesses that would be actionable in the same way
as they are under the European Convention on Human Rights against
states. This could be controversial as traditionally, under international
law, it has been the duty of states to uphold internationally recognised
human rights within their jurisdiction. As the courts increasingly
find companies complicit in human rights abuses, it may be useful
for businesses themselves to have their responsibilities laid down
in a legally binding instrument for the sake of clarity and consistency.
However, there may be significant resistance by some governments
to impose direct regulations on businesses in the realm of human
rights.
Note
117. A convention could also expand on the provisions laid out
in the OECD Guidelines on Multinational Enterprises, the ILO Tripartite
Declaration and the Global Compact and state explicitly which rights
should be respected. Further guidance would also need to be issued
on how companies can ensure that these rights are respected. This
could be done by using such concepts as “sphere of influence”
Note and “due diligence”. Extra assistance
would be needed for small and medium-sized enterprises if obligations
were imposed as they are not as likely to be able to find out information
about companies that they work with as larger multinational corporations.
118. A further area for consideration is whether states should
be held responsible for the activities of a multinational corporation
that is incorporated within the jurisdiction, but where there has
been an allegation of a human rights violation elsewhere. Currently,
it appears that under international law states are not required
to regulate the extraterritorial activities of multinational corporations
or other companies. On the other hand, there is nothing to stop
them from regulating this sort of conduct either.
Note As
discussed above, claimants can now bring a civil claim within the
European Union for a civil wrong that occurred anywhere in the world
against a European Union-based multinational corporation. The question
is: if ever the idea of a Council of Europe convention were pursued,
should there be a special provision within such a convention which
would enable claimants to bring cases against any European multinational
corporation, regardless of where the violation occurred?
119. If a convention were to be drafted, there would need to be
detailed discussions on access to remedies for claimants/complainants
in human rights cases against businesses.
Note
120. Other issues that would need to be explored are: how cases
would be funded; whether a convention monitoring body would be able
to hear complaints against states or businesses; and who would be
entitled to make a complaint under a convention (namely NGOs, individuals,
trade unions or other companies).
121. As regards the choice for future Council of Europe action
in the field of human rights and business between the form of a
recommendation of the Committee of Ministers and a new convention,
the following considerations speak for the more pragmatic solution
of a recommendation. Recommendations are not legally binding but
they do represent a common position of all member states, especially
as such recommendations are adopted unanimously. There are many
advantages to using this soft law instrument, rather than that of negotiating
a convention. First, due to their non-legally binding status, they
can be agreed upon more easily than a convention. Secondly, recommendations
are a quicker form of creating an international arrangement as they
are applicable upon adoption, whereas conventions only come into
effect once states have ratified them. Thirdly, it is relatively
easy to modify recommendations once they have been adopted as circumstances
and practices change. Finally, states are unlikely to agree to a
recommendation if it is contrary to domestic policy, which means
that the document is more likely to be acted on despite the fact
that it is not legally binding.
Note What is especially needed
is a clarification of (a) what states expect from business in terms
of human rights protection (abroad) and (b) under what conditions
states will be liable for human rights violations committed by businesses
(abroad).
5.1.3 Guidelines
122. In the absence of an international agreement on human
rights and business, the United Nations Special Representative has
suggested that regional human rights treaty bodies can play an important
role in making recommendations to states on implementing their human
rights obligations vis-à-vis the activities of businesses.
Note
123. If neither a convention nor a recommendation is seen as an
appropriate way forward, the Council of Europe is also free to issue
detailed guidelines on human rights, business and the topics discussed
in the previous section. Businesses could sign up to these guidelines,
which could take the form of a voluntary code of conduct. Member
states could also decide whether or not to implement measures prescribed
in such guidelines according to their own political priorities.
124. In any case, even after a recommendation or a convention were
to be adopted, more detailed guidelines for governments and companies
could be issued in addition, on specific measures that states and
businesses can take to ensure that rights are protected and respected.
Such guidelines could be adapted over time to incorporate responses
to new human rights challenges.
5.1.4 Training
125. The Council of Europe could also consider providing
training to small and medium-sized enterprises and multinational
corporations to raise awareness of the Council of Europe’s human
rights standards. It could work with business organisations, trade
unions and NGOs to try to devise a toolkit on mainstreaming human
rights best practices into every aspect of a business and how to
conduct human rights impact assessments. It could also provide training
to national human rights institutions so that they could disseminate
the information to companies within their states.
5.1.5 A Council of Europe
label
126. One of the biggest flaws of a voluntary approach
to CSR is that consumers of goods and services do not have access
to consistent and independent information on companies’ human rights
records. The Council of Europe could either consider establishing
its own labelling mechanism or sponsor someone else to do this using
Council of Europe human rights standards. This could be akin to
the domestic labelling system that has been set up in Belgium.
Note If the Council of Europe could provide
unified, clear standards that are well promoted and recognisable,
consumers would be able to make informed choices. A European-wide
label would also have real tangible effects on the reputations of
businesses and would encourage them to adopt best practices in the
field of human rights.
5.1.6 Leading by example
127. If the Council of Europe is to advocate steps to
ensure that businesses respect human rights, it must ensure that
its own house is in order. It could publish and make visible its
own CSR policy centred on human rights. This could include information
on its sphere of influence and how it ensures that its suppliers
respect human rights. More detailed information about the Council
of Europe’s position on this subject should be sought.
6 Conclusion
128. There are current ongoing discussions on human rights
and business at the national, European and international level.
Existing frameworks do not appear to adequately protect individuals
from potential human rights abuses by companies. Nevertheless, it
seems unlikely that an international agreement on business and human
rights will be reached in the near future.
129. The Council of Europe, with its vast institutional knowledge
and experience in the field of human rights, may be in the best
position to begin developing a new framework or guidelines for businesses
on human rights. Whatever role the Council of Europe decides to
take, it should only be done if it adds value to existing frameworks.
However, in addressing these issues, the Council of Europe should
also make use of existing international soft law instruments as
well as voluntary corporate social responsibility initiatives and
toolkits. In particular, the Council of Europe could work profitably
with the OECD, which has many contacts in this field, through its
National Contact Points.
