Recognized international human rights have traditionally been framed as creating duties and obligations for States under treaties and other instruments and elements of international human rights law.[1] For a long time, relatively little attention, if any, was paid to businesses’ responsibilities for supporting respect for human rights. Many clung to the argument that States had the exclusive responsibility when it came to human rights and that the role of businesses should be confined to complying with the laws and regulations promulgated by States with respect to workplace conduct, use of natural resources, and the like.[2] In recent years, however, the criticism of businesses that accompanied the globalization that dominated the last decades of the 20th Century has shifted more and more attention toward holding businesses, as well as States, accountable for human rights duties and obligations.
The day-to-day operational activities and strategic decisions of businesses inevitably have an impact, both positive and negative, on one or more universally recognized human rights. On the positive side, businesses play a unique role in society as the creators of wealth, sources of employment, deliverers of new technologies, and providers of basic needs.[3] At the same time, however, businesses, fixated on profits as the main and often seemingly exclusive goal and purpose of the enterprise, have repeatedly treated their workers poorly, engaged in dangerous or corrupt business activities, polluted the environment, developed and marketed products and services that cause harm to consumers, and become involved in development projects that have displaced or marginalized communities.[4] The concern about these negative impacts of business activities has increased as corporations themselves have grown in size to the point where many of them are larger than many of the States in which they operate.
Human rights activists have complained that States, particularly developing countries, are often unable or unwilling to enforce human rights obligations in the treaties they have ratified, including regulating activities of businesses. They have argued that the only real hope is that businesses will assume human rights duties and responsibilities, either voluntarily or pursuant to some form of mandatory framework that creates business human rights obligations directly rather than through a State. Arguably, the stakes are high for businesses, including the possibility of reputational damage and/or disruptions to supply chains caused by human rights crises in foreign countries. As such, they have real incentives to step in and take up the slack caused by a growing sense that environmental and social challenges are overwhelming the resources and regulatory tools of the public sector. One commentator pointed out that “businesses can no longer leave it to markets, governments or a relatively weak civil society to respond . . . [and] . . . [i]t’s in businesses’ interests to take an urgent and proactive role in delivering the transformational change required.”[5]
There is a growing consensus that businesses have a duty to respect human rights, and governmental and intergovernmental bodies have attempted to establish guidelines that could serve as points of reference for the duties and responsibilities of businesses as they conduct their business activities. The International Labour Organization adopted the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy in 1977; the Organisation for Economic Co-operation and Development (OECD) adopted the Guidelines for Multinational Enterprises in 1976 as part of the OECD’s Declaration and Decisions on International Investment and Multinational Enterprises; and the United Nations has engaged in several projects to promote the accountability of businesses for human rights, including the UN Global Compact (adopted in 1999) and the Guiding Principles on Business and Human Rights (commonly referred to as the “Guiding Principles”). Governments have also been involved in multi-stakeholder initiatives to develop sector-specific guidance for human rights due diligence and have acted through various types of domestic legislation.
Probably the most highly publicized initiative relating to the relationship between international human rights and the operations of business enterprises has been the Guiding Principles, which implement the UN’s “Protect, Respect and Remedy” Framework. This document was developed by the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises after extensive consultation and was endorsed by the Human Rights Council, the key independent UN intergovernmental body responsible for human rights, in its resolution 17/4 of June 16, 2011.[6] The Guiding Principles were not intended to impose new legal obligations on business or to change the nature of existing human rights instruments. Instead, their aim is to articulate the meaning of these established instruments for both States and companies and to address the gap between law and practice.[7] Since they were first approved, the Guiding Principles have become the global standard for the respective roles and duties of States and businesses relative to human rights and have been integrated as central elements of other well-known international standards such as the OECD Guidelines for Multinational Enterprises, the International Finance Corporation Performance Standards, and ISO 26000.
Interpretive guidance to the Guiding Principles noted that enterprises recognize that their social responsibilities begin with legal compliance and that the responsibility of enterprises to respect human rights is itself often reflected, at least in part, in laws and regulations. However, the Guiding Principles define enterprises’ responsibilities to respect human rights to extend beyond applicable laws and regulations to include respect for all internationally recognized human rights wherever they operate. In effect, enterprises are expected to include the risk of causing or contributing to gross human rights abuses among all the other legal issues they face in their operations and business relationships. The Guiding Principles are intended to serve as a uniform standard that can be referred to in a variety of contexts for clarity and predictability, including situations where there are no national laws or regulations to protect human rights or where the content and enforcement of laws and regulations that do exist fall short of internationally recognized standards.[8]
Business and human rights, like corporate social responsibility (CSR), is an emerging topic that will soon be a lasting element of corporate governance, compliance, and risk management practice. A number of the topics included under the umbrella of CSR, particularly in the environmental and labor areas, already have developed their own rich collection of laws, regulations, case law, and practice tools. The same will soon be true of business and human rights and other topics, such as stakeholder engagement, social enterprises (e.g., benefit corporations), board oversight of sustainability, community development, and nonfinancial reporting. Given the growing number of societal and political issues that can reasonably be placed under the rubric of human rights, and the apparent inability of governments to deal effectively with those issues, it would seem that attention will inevitably turn to how and when businesses will deploy their substantial resources to develop solutions.
A sense of urgency regarding businesses’ responsibilities vis-à-vis human right has accelerated over the last year as our world has undergone dramatic stresses. First of all, our world changed as the COVID-19 pandemic swept over us. The UN High Commissioner for Human Rights described the COVID-19 outbreak as “a serious threat to the right to life and to health of people everywhere” and argued that the international human rights framework could provide “crucial guideposts that can strengthen the effectiveness” of the collective global response to the pandemic.[9] A joint call issued by 60 UN human rights experts included a reminder that the response to the COVID-19 crisis should go beyond public health and emergency measures to address all other human rights as well and emphasized that “the business sector in particular continues to have human rights responsibilities in this crisis.”[10] In a paper examining companies’ responsibilities for workers and affected communities in the time of the Covid-19 pandemic, the Institute for Human Rights and Business (IHRB) pointed out that companies that have the capacity to act (because of their assets or the resources at their command) can be expected to play a role in helping states meet their obligations to protect human rights. The IHRB went on to say:[11]
Companies have clear responsibilities towards their employees. But it is also the case that they have a responsibility towards contractors and their employees (in particular those who work on premises) as well as suppliers, associates, and other partners, consumers, and wider society and the general public who are affected by a company’s presence and operations.
Experts have identified a range of key human rights concerns relating to the outbreak and management of the Covid-19 pandemic, including the need to respect rights, include everyone, and ensure access; protection of the vulnerable; focusing on the disproportionate impact of the crisis on women; eliminating racism and xenophobia; placing limitations on restrictions and surveillance; deploying and using technology; and permitting dissent.[12]
As COVID-19 raged, businesses, as well as society in general, were challenged yet again by the horror of watching George Floyd, a black man, die in the custody of the Minneapolis police department on May 25, 2020, an event that set off days of large public demonstrations against racial injustice all around the world, often accompanied by vandalism and looting as well as disproportionate police responses that escalated the tensions. As has often happened in the past when such incidents have occurred, businesses large and small were quick to issue statements through social media expressing their concerns about social justice and supporting the Black Lives Matter movement. Many large and well-known brands made commitments to contribute substantial sums to social justice initiatives and supporting minority businesses. However, Darren Walker, the president of the Ford Foundation, criticized the traditional and predictable response of companies in the face of racism in a quote published in an article in The New York Times: “The playbook is: Issue a statement, get a group of African-American leaders on a conference call, apologize and have your corporate foundation make a contribution to the N.A.A.C.P. and the Urban League … That’s not going to work in this crisis.”[13] The same article led with the headline “Corporate America Has Failed Black America” and went to say: “… many of the same companies expressing solidarity have contributed to systemic inequality, targeted the black community with unhealthy products and services, and failed to hire, promote and fairly compensate black men and women”.[14]
Surveys have shown that a majority of Americans want business leaders to seize the challenges and opportunities that have gripped society’s attention in the wake of the events of 2020 by taking a stand and making and fulfilling commitments to action across a broad spectrum of issues and contexts that includes embedding equality, diversity and inclusion in the boardroom, the workforce and all aspects of organizational culture; financial equity and security; community engagement; involvement in the public square through advocacy for racial justice and re-imaging products and services.[15] Discrimination on the basis of race is a fundamental human rights issue and while States have the primarily responsibility under international human rights laws to protect the freedom of everyone and guarantee their dignity and ability to enjoy all of the universally recognized human rights, businesses have a duty to respect those rights and take the necessary steps to promote racial non-discrimination and equality wherever they operate. Businesses have also been called upon to contribute to the Sustainable Development Goals established by UN such as access to basic services, participation in decision making, full and productive employment and decent work, reducing income inequality, ensuring equal opportunity, promoting peaceful and inclusive societies, providing justice for all and building effective, accountable and inclusive institutions at all levels.
While 2020 has been difficult for many businesses, there are also heartening examples of companies providing relief to their communities and support to essential workers, taking extraordinary steps to protect the safety and economic well-being of their employees and repurposing aspects of their business in order to provide new products and services required by consumers to get through the pandemic.[16] We can expect that the lessons from the pandemic will change the landscape for business and human rights in the years to come, and we can hope that our leaders in business and government heed the concerns of their stakeholders. As lawyers, we must continue to educate ourselves to be able to make a meaningful contribution to one of the most important topics of our time and help clients that are no longer simply asking about “what is legal,” but instead are seeking wise counseling on “what is right.”
This article is an excerpt from the author’s new book, Business and Human Rights: Advising Clients on Respecting and Fulfilling Human Rights, published by the ABA Section of Business Law. More information on the book is available here.
[1] Alan S. Gutterman is the Founding Director of the Sustainable Entrepreneurship Project (www.seproject.org), a California nonprofit public benefit corporation with tax exempt status under IRC section 501(c)(3) formed to teach and support individuals and companies, both startups and mature firms, seeking to create and build sustainable businesses based on purpose, innovation, shared value and respect for people and planet. Alan is also currently a partner of GCA Law Partners LLP in Mountain View, CA and a prolific author of practical guidance and tools for legal and financial professionals, managers, entrepreneurs and investors on topics including sustainable entrepreneurship, leadership and management, business law and transactions, international law and business and technology management. He is the Editor-in-Chief of the International Law News, which is published by the ABA International Law Section, and co-editor and contributing author of several books published by the ABA Business Law Section including The Lawyer’s Corporate Social Responsibility Deskbook, Emerging Companies Guide (3rd Edition) and Business and Human Rights: Advising Clients on Respecting and Fulfilling Human Rights. More information about Alan and his work is available at his personal website.
[2] G. Brenkert, “Business Ethics and Human Rights: An Overview,” Business and Human Rights Journal 1 (2016): 277.
[3] C. Mayer, Prosperity: Better Business Makes the Greater Good (Oxford: Oxford University Press, 2019).
[4] A. Sharom, J. Purnama, M. Mullen, M. Asuncion, and M. Hayes, eds., An Introduction to Human Rights in Southeast Asia (vol. 1) (Nakhorn Pathom, Thailand: Southeast Asian Human Rights Studies Network, 2018), 160. See also C. Lewis, “Businesses’ Human Rights Responsibilities,” Forced Migration Review 41 (December 2012): 25 (“Pollution from factories and mining projects . . . [has] . . . deprived people of their livelihoods, water sources and access to religious and cultural sites. Even where a company is not causing damage to the environment, its mere presence can alter the social composition of the local community or create tensions among different groups and lead to displacement of individuals, families or whole communities.”)
[5] https://www.sustainablepurpose.com
[6] See http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf. The Guiding Principles are sometimes referred to as the “Ruggie Principles,” referring to John Ruggie, the Special Representative for Business and Human Rights, who introduced the principles in 2007 and led the efforts that eventually led to endorsement of the Guiding Principles.
[7] Handbook on Corporate Social Responsibility (CSR) for Employers’ Organizations (European Union CSR for All Project, April 2014), 18.
[8] The Corporate Responsibility to Respect Human Rights: An Interpretive Guide (New York: UN Human Rights Office of the High Commissioner, 2012), 76–77 (commentary on Guiding Principle 23).
[9] As reported and quoted in Respecting Human Rights in the Time of the Covid-19 Pandemic: Examining Companies’ Responsibilities for Workers and Affected Communities (Institute for Human Rights and Business, April 2020), https://www.ihrb.org/focus-areas/covid-19/report-respectinghuman-rights-in-the-time-of-covid19, 9.
[10] Id. at 10.
[11] Id. at 16.
[12] Id. at 10. See also Covid-19: Business and Human Rights (Business and Human Rights/Semilla, April 2020).
[13] D. Gelles, Corporate America Has Failed Black America, The New York Times (June 7, 2020), BU1.
[14] Id.
[15] For further discussion of implementing each of the listed commitments, see A. Gutterman, “Racial Equality and Non-Discrimination”, available at the website of the Sustainable Entrepreneurship Project (www.seproject.org).
[16] Beyond the Call: How Companies Have Stepped Up during COVID-19 (May 12, 2020).
