Monitoring the actions of corporations to ensure their accountability is a challenge. They work all over the world, under several jurisdictions, have power in the market economy, and operate on a large-scale, impacting the environment and the lives of many people.
Initiatives such as the UN Global Compact and the use of corporate social responsibility reports are ways that corporations voluntarily report on their impacts. But critics argue that these are insufficient, because they are nonbinding.
To create a more effective framework to help businesses prioritize human rights, in 2005 UN Secretary General Kofi Annan appointed John Ruggie of Harvard University. The result was the the UN Guiding Principles on Business and Human Rights, approved unanimously by the Human Rights Council in 2011.
Though the Guiding Principles are meant to provide a set of specific instructions for corporations, there remains concern that as guidelines they are once again an effort that is nonbinding and may prove to be inadequate in its effectiveness.
To understand the potential that the Guiding Principles have, and to see if they could, in fact, be revolutionary, I interviewed three experts in the field:
John Ruggie, who is credited with creating the Guiding Principles while Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprise.
Pratap Chatterjee, the executive director of Corp Watch, an NGO focused on corporate transparency and accountability.
Penelope Simons, Associate Professor at the University of Ottawa Faculty of Law. Research and teaching focus on human rights law and international business.
Voluntary standards versus legal enforecement
Pratap Chatterjee of Corp Watch is skeptical of the Guiding Principles because he finds it contains the same problems as previous voluntary regulation schemes, where the corporations basically choose whether or not to adhere to the principles and can say they’re doing one thing and then do something completely different.
“The principles’ mechanisms for redress are not sufficiently effective to make them accountable or to prevent corporations from violating human rights when they are operating in conflict zones or weak governments,” he said. “You actually have to be disbarred from things, you have to be fined, and jail time has to be charged.”
Ruggie, on the other hand, does not accept the characterization of voluntary in the first place. “While writing the Guiding Principles, I tried very hard to break through the binary distinction between voluntary and regulatory because they are not as clear cut as people assume. When people say that we need a binding international legal instrument, in other words a treaty, treaties are voluntary for states and you cannot force a state to adopt a treat.”
Simons thinks that having principles help the discussion of corporate accountability move forward. “There is no silver bullet to fixing this problem. You need to tackle it at a variety of levels. It is about changing our ideas and our laws with respect to corporations and specific corporate law that protects them and facilitates their activity.” On the other hand she also recognizes that some corporations may be comfortable with the guidelines because they have can find ways to escape regulation and accountability.
Ruggie is confident that the guidelines will help in gaining specific improvements in the future, and thinks that it is unproductive to try and sanction corporations without them. “It is important for legal measures to be part of an overall package of response to business and human rights challenges, as opposed to hoping that it is possible to combine all of the challenges in some overarching international treaty that will take the next thirty years to negotiate and will be highly problematic in its enforcement.”
Acceptance of the guidelines
Overall, the Guiding Principles was well received among stakeholders, including several human rights organizations along with multinational corporations such as Coca-Cola and GM.
“There are reasons why the Guiding Principles were well-received by both corporations and human rights organizations, and that is what I intended to do,” Ruggie said.
“Five or ten years ago, the subject of human rights was absent from corporate and government decision-making about corporations. If you look at the body of corporate law around the world at that time, it didn’t recognize that the corporations are social institutions that have an impact on their shareholders and also on the individuals and communities around them. I think that has changed in significant ways with the hope of providing a common basis of how to do these things better.”