Human Rights: Ethical Common Ground

GB: Justine, thanks for talking with us. Justine, you are Senior Lecturer in Human Rights at the University of NSW and the Deputy Director of the Australian Human Rights Centre at the University, correct?

JN: That's right. Yes.

GB: You have a particular interest in Corporate Accountability. Could your perhaps explain a bit what sparked your interest in working in this area?

JN: I was working in the US in the late or mid 90's and there was a lot of interest in the sweat shop phenomenon reflected in media reporting and student campaigning. Americans were slowly discovering, accompanied by scandalous media reports, that a lot of their consumer goods were being made in factories in fairly atrocious conditions. Around that time, I started working for a US NGO, called The Lawyers' Committee for Human Rights and became involved in starting a business and Human Rights program in that area. That got my real interest going with all of it and, straight-away, I started working with companies, looking at how we could talk to them about their Human Rights records and the conditions in their factories.

For most of the time - and prior to this - Human Rights and Human Rights law focuses on governments and what governments should and shouldn't be doing. All of international law focuses on the responsibility of governments. Over the last 30 years particularly when large corporations have the size, influence and sometimes power of many governments, it becomes apparent that there is a whole new player in the market that hasn't been “regulated”. So, what was interesting to me was how we bring Human Rights into that sphere to make others, perhaps not only governments, look at the accountability of others for Human Rights. We should all be responsible and not just rely on governments to protect Human Rights.

GB: So, you are trying to get involvement with businesses in an overall project for the defence and promotion of Human Rights. Would that be right?

JN: Yes. Particularly, businesses are a major player in the context of labour rights and economic and social rights. They're the ones that are most intimately involved and so it seems futile and very inefficient to leave them out of the equation. At the same time, they were being targeted by various activists so, even though it was a reaction rather than a proactive response from them, some of them were interested in what they could do and how they should be acting.

Business interest in Human Rights

GB: Why should or why do businesses want to become involved in this sort of thing? You're saying it's initially to avoid bad press, perhaps to improve their public image?

JN: Yes. Many would deny that now, --twenty years on-- but the truth is that really the initial response in many businesses is in reaction to a negative report or bad press. That's definitely changed now. While some are still very much reactive, some other companies are proactive. For example, they might be trying to create a niche spot in the market or they might be more concerned with the quality of their product. This is particularly true for brand name companies as opposed to more generic product names.

GB: Of those who are being more proactive, could you talk about their motives? Why are they the good ones?

JN: There are a number of reasons. There are a lot of business reasons as to why you might get support for Human Rights. Some are concerned about the inefficiencies of having to change suppliers too often if you have bad products. Others say that ultimately what they want is a better product and so it's going to be consumer loyalty, employer loyalty, all of those factors. But, to be honest, you see conflicting reports about how much corporate responsibility does affect the bottom line. You can find arguments both ways saying ‘That's a solid business proposal’ and others saying, ‘No, it's Bottom Line Bull’.

I still think that, largely, a lot of them do it to protect their name, to protect their brand. There are also some companies that were targeted 20 or 30 years' ago, like Nike. Now, they're taking a lot of responsibility for their supply chain. Twenty years' ago they just denied responsibility but now they are pro-actively out there monitoring their supply chain and trying improve conditions. It's in their interest to have consistent suppliers.

Business Evolution: proactive with Rights

GB: So, you seem to be implying that companies that have been doing this for a while have gone through a process of evolution, perhaps coming to grips with the complexity of the world they're working in?

JN: I think that's true. The initial response of companies, particularly 25-30 years ago - and the dramas then that were particularly highlighted were the Nike, Addidas, Reebok sweatshop scandals; Levi Strauss, Gap – a number of big, particularly European and American companies. Then there were also oil and gas sectors: Shell in Nigeria; Unocal in Burma, all specifically targeted over particular incidents. About 25-30 years' ago the initial reaction of pretty much all those companies was denial of responsibility. Now some are evolving to having specific responsibility for their supply chain, even though their products are being made not by their employees but by workers who are sub-contracted out. In varying degrees, I think that some of the companies have a greater sense of responsibility, if not, accountability for Human Rights.

GB: You seem to be recognising a process of moving from something like voluntary reporting to establishing accepted practice amongst businesses. Might that then move towards a more mandatory framework for respect for Human Rights and social responsibility generally?

JN: I think that's right. There were big movements in the 70's that were then really re-ignited in the mid-90's. The central issues then were voluntary responsibility for Human Rights and sometimes corporate responsibility. Regulatory approaches were very much frowned upon. We might well be at a stage now where people have been assessing the effectiveness of voluntary approaches and codes of conduct and saying that it's a useful tool but it can't be relied upon as the sole tool.

In particular, I would argue that when we look at the movement from corporate responsibility to corporate accountability, any voluntary recognition of responsibilities is useful. We need to delineate more clearly what businesses are responsible for as well as what we also need as societies. In the cases where companies aren't respecting Human Rights, we need to have mechanisms of accountability to try to get domestic governments to insist that companies do Human Rights Impact Assessments for large projects. Environmental impact assessments are common now but we neet to start to make them routine and consistent across jurisdictions. There are various ways the law might hold companies accountable at the moment, but whether through litigation or reporting, the accountability is pretty minimal. The hard law of holding companies accountable for Human Rights is fairly limited in an international sense.

Corporate Accountability: For What and To Whom?

GB: So, the issues over the last 30 years or so raised the issue of limits to responsibility. The extents to which a company is responsible for what happens, for what sorts of things and to whom they should be responsible, are some of the essential issues that are disputed. When you talk about reporting, I guess that issue translates to one of materiality? I mean, what should be disclosed and to whom?

JN: Australian corporate law now stipulates that companies report those issues that impose material risk to a company and they tend to focus on more short-term, profit-driven risks. Human Rights issues can also be part of these types of risks, particularly if there's a law suit looming. But there is a trend towards broadening the sense of what companies and directors should be reporting on, as we have seen in the UK for example. It's not just profit and economics, it's also environmental issues and social issues, (including Human Rights): the so-called triple bottom line approach to corporate reporting - which is slowly seeping into the mainstream.

GB: Could you give us an example of where the cutting edge is in terms of what corporations are responsible for, what's material and what's not, with regard to Human Rights?

JN: You see different approaches around the world at the moment and various governments are trying different things. The UK last year, basically reformed some of its company laws in this respect. There's a section now which requires directors to take into account stakeholder interests when assessing the health of the company. That goes beyond the mere shareholder approach, extending to include customers, workers, their relationships with suppliers and the environment as well. A similar trend is observable in northern Europe, too. Denmark just recently brought in a broad corporate responsibility reporting requirement that means listed companies have to specifically report on Human Rights and environmental impact.

Which Rights are to be protected and how?

GB: Do they nominate which Human Rights and who exactly are stakeholders?

JN: In all of these laws at the moment, their downfall is that they all vary slightly and some of them are a little vague. In France, for example, there's a reporting law has been in place for a few years with a focus on labour-rights and anti-discrimination laws. Denmark’s is broader and they make more reference to some Human Rights that are not specifically in Danish law by referring to the Universal Declaration of Human Rights for example. That means they are looking at the international legal definitions of Human Rights - and that's probably the easiest way to go. Human Rights are not just “aspirational goals”: they're become well-defined over the years and we shouldn't be reinventing the wheel. We should be applying international Human Rights Law and their definition of Human Rights and incorporating that in business responsibility, not trying to rewrite what Human Rights are.

GB: I know there are a number of attempts to make those sorts of translations or transitions. The Global Compact is one such which attempts to specify ten principles that are adaptations of the Universal Declaration of Human Rights to businesses. Are there others or is there one that you think is best?

JN: Well, I think that the best thing that they can do is actually refer specifically to the international treaties that govern Human Rights Law. The Global Compact refers vaguely to Human Rights and the Universal Declaration but there are two major treaties that two thirds of the countries around the world have signed: the International Covenant on Civil and Political Rights; and the International Covenant on Economic, Social and Cultural Rights. So that should provide a base for understanding what Human Rights companies, and everyone else, should be respecting. It's very difficult to maintain an argument that one particular right is not relevant to companies in general and another right is, because it changes depending on the company’s operations. Some of the rights are going to have greater or lesser relevance to companies but it doesn't mean that, somehow, they're not within their sphere of responsibility. The level of assistance and protection for them may vary but, I think we have as a base line, the International Bill of Rights (those two covenants along with the Universal Declaration), which sets out the Human Rights applicable world wide.

Corporate vs. Government Responsibility

GB: So, the content of what Human Rights are about doesn't change but responsibilities in some sense do. Those international covenants are written with, as you said, member states being those responsible to ensure that those rights are respected. I know some companies tend to say that this is for governments to do, not for us to do. It's not our responsibility. They're governments' responsibilities.

JN: I think the primary responsibility for Human Rights has to lie with governments. That's got to be the first port of call, that you rely on governments to respect and protect the Human Rights of all the people within each government's territory and jurisdiction. But you're always going to get into situations where companies may have complementary responsibilities that could assist governments. I think simply determining that a government has responsibilities doesn't mean that others couldn't also play a role. For instance, in the oil and gas sector, Shell in Nigeria operates basically on the same level as the Nigerian government. The Nigerian government has to have primary responsibility for protecting it's citizens' Human Rights, but when you have such a major player, shouldn't Shell also have some level of responsibility within this, what we might call, sphere of responsibility for its operations?

The UN Special Representative on Business and Human Rights, Professor Ruggie, has said there's a clear distinction where companies should respect Human Rights but states should protect them, meaning that states have to go out there pro-actively and protect third parties from interfering with Human Rights. I don't quite agree with such a distinction between “respect” and “protect”. Companies also may have a role to play in protecting Human Rights, particularly where governments are weak or unwilling or in a conflict zone where the government is basically not operating and, in some cases, the company is almost a de facto government. In such situations, they also should take on that protection role. There is a range of responsibility, which we are basically trying to work out now, but that doesn't mean that companies never have a protection role.

GB: You mention Unocal in Burma, where the government seems to be deliberately abusing Human Rights. What are companies’ responsibilities in the face of that sort of reality?

JN: Unocal basically partnered with the Burmese military in order to secure the pipeline. That means it has a direct relationship with the government, so at the very least that company has a due diligence in ensuring that the partners to its contract are not abusive. There is a history of the Burmese military abusing their role in those sorts of operations. In that situation, where the company is either partnering with the government, is taking on a government role or acting as the agent of the government, I think, they have that increased level of responsibility for Human Rights.

International Corporate Accountability

GB: So we should be moving towards a regime where the company can be taken to court - in an International Human Rights Court - in a situation like that?

JN: Well, I think that's not a likely scenario soon because the realistic situation of having an International Court of Human Rights, if it ever happens, is a long way off. Governments and the UN are really hesitant about setting up new structures when they've got so much bureaucracy tied up in the current ones. So, a better strategy would be to analyse how it can work now. There is the possibility of the International Criminal Court which is already operating. It doesn't have jurisdiction over companies. We should ask why it doesn't. It's technically possible, so should its jurisdiction extend from individual to corporate crimes, which Australian law actually allows for at the moment. I also think that we have to look at how we make States more accountable within their own jurisdiction as well.

GB: States now, if they're signatories to those covenants, are basically obliged to report on the way they are defending and respecting Human Rights within their jurisdictions.- not much more. Is that correct?

JN: Yes, absolutely. Country responsibilities under major Human Rights treaties all involve reporting obligations to report on what they're doing to protect and respect Human Rights. But that does include them preventing third parties from abusing those rights which would include companies. If there are companies within their jurisdiction that are abusing Human Rights that would fall into that report. What you're seeing now, which is fairly recent (only in the last 5 years or so, perhaps a little bit more), is the UN Human Rights treaty bodies actively referring to and encouraging states to speak directly to companies about their responsibility in this regard, which is a new thing. In a couple of reports - particularly from the Committee on Economic Social Cultural Rights and the Committee on Racial Discrimination – there are direct references to the responsibilities of states to bring companies into line within their territory and jurisdiction.

GB: But are you also advocating for companies to be doing some sort of similar reporting?

JN: Yes. I'm talking about reporting at a state country level. I can't see company level reporting functioning [internationally] without massively reforming the UN treaty bodies. There's over 75,000 multi-national companies in the world and loading that on to the International treaty system seems particularly unrealistic. What I would say is that you've got to report it at a national level, but it would be helpful to have an international standard which they're reporting on so you have consistency across jurisdictions.

International Standardisation

GB: Is there a standard in the wings, as it were?

JN: Well, there are various initiatives out there. Particularly, you've got the Global Reporting Initiative which has teamed up with the Global Compact. I don't think the ideal one is out there. Also, I don't think there's one delineating what a Human Rights Impact Assessment should look at, but there are a lot of initiatives that involve reporting. One of the important tasks is to try to standardise them and bring them more into line. That's a task that is definitely in the works, but it's going across different jurisdictions and different industries at different levels.

GB: One of the sources of information about what a good standard would be, is an analysis on current practice?

JN: Yes, for sure. You'll see various reports around done by NGOs about this and some companies that investigate themselves and also governments. But, for sure, it is important to check out what standards companies are operating to now. It's also important to be realistic in terms of looking at what the market can bear.

Information for Companies on Assessing Human Rights

GB: So, if we've got a hypothetical company and it's got some international operations, say in the developing world - and it's not doing much about reporting or actively engaging with Human Rights issues at the moment. It's just trying to get along, but it's starting to think: “Well we better visit this before it visits us; we'd better start thinking about doing some Human Rights reporting.” Where would they go to? Where would be a good place to get an idea about what it might mean for them?

JN: One of the best tools around at the moment, I think, is the Danish Institute of Human Rights website, a tool kit for companies giving them some of the basics on this. Just look up the Danish Institute for Human Rights. They have a business section and I think they have been developing that for a while and it's quite useful (http://www.humanrights.dk/business). As previously mentioned, there are various initiatives within the UN. The UN Special Representative for Business and Human Rights dedicates a lot of its own reporting and website to this. One of the best central places to look is there's a standard Business and Human Rights website just called http://www.business-humanrights.org/ which has a compilation of what all companies are doing now, as well as where they're going wrong, reports by NGOs and governments and is a central site for the reporting at the UN. That, at least initially, is where you could assess what companies are doing. The UN Office of the High Commission for Human Rights put out “Human Rights Translated: A Business Reference Guide” last year, which is also useful and is on their website (http://www.unglobalcompact.org/docs/news_events/8.1/human_rights_translated.pdf). So, there are lots of potential tools out there.

GB: And in terms of current best practice amongst companies, would you feel free to name anyone?

JN: Well, I think it unrealistic to search for it. You're never going to find a company without a Human Rights problem - as you're not going to find a government without a Human Rights problem. It's where they differ in degrees that are important. But the companies that are the furthest ahead in this push tend to be those companies which have been targeted earliest and so have been forced to get their act together. These tend to focus on brand name companies which are largely US and European based. So, the big names I mentioned earlier, like Nike and Addidas, Gap, Levis - those sorts of companies are still not without their issues, but I'd say they were further advanced than many other companies because they're focussed on protecting their brand name.

GB: So, it's actually a story of falling over and continuing to pick yourself up?

JN: Yes, and it's a movement without a clear goal in sight, in some ways. The goal posts keep changing, particularly in terms of the Human Rights Law. It's really new to focus on a non-state actor like business, so there's no clear dominant approach that we should be going for. Everybody is trying different methods of accountability, whether it's through litigation, reporting or through codes of conduct, to see what might be the most effective. In terms of laws on the international scene, it's still pretty much a "new kid on the block". So, it's one of those things that you have to try a few approaches and that's partly what the codes have been doing over the last 10 to 15 years. They've shown they've got a role to play, but they can't be relied on as the only source of corporate responsibility and movement.

GB: Thanks very much, Justine.