University of Minnesota




MATERIALS ON NON-STATE ACTORS (INCLUDING BUSINESSES) AND HUMAN RIGHTS

 (to be discussed October 7, 2005)

 © 2005 David Weissbrodt, University of Minnesota Law School
 


 

 

A. QUESTIONS

B. U.N. AND OTHER INTERNATIONAL HUMAN RIGHTS LAW RELEVANT TO THE RESPONSIBILITIES OF BUSINESS

C. COMMENTARY ON THE NORMS ON THE REPONSIBILITIES OF TRANSNATIONAL CORPORATIONS AND OTHER BUSINESS ENTERPRISES WITH REGARD TO HUMAN RIGHTS

D. ARTICLE ABOUT THE HUMAN RIGHTS NORMS

E. REPORT OF THE U.N. HIGH COMMISSIONER FOR HUMAN RIGHTS

F. COMMISSION ON HUMAN RIGHTS RES. 2005/69

G. MARY RUMSEY, INTERNATIONAL HUMAN RIGHTS ASPECTS OF MULTINATIONAL ENTEPRISES AS NON-STATE ACTORS: BIBLIOGRAPHY

___________________________________________________________________________


MATERIALS ON MULTINATIONALS AND HUMAN RIGHTS 

In preparation for the classes, please consider the following questions in light of the materials provided below and be prepared to refer to specific textual references in support of your responses.

 

A. QUESTIONS

What do provisions of international human rights and humanitarian law say about the obligations of transnational corporations and other business enterprises?

How does the Universal Declaration of Human Rights relate to business?

How does the International Covenant on Economic, Social and Cultural Rights relate to business?

How has the Committee on Economic, Social and Cultural interpreted the Covenant with regard to the responsibilities of business?

How does the International Covenant on Civil and Political Rights relate to business?

How does the International Convention on the Elimination of Racial Discrimination relate to the responsibilities of business?

How does the Convention on the Elimination of All Forms of Discrimination against Women relate to the responsibilities of business?

How does the Rome Statute of the International Criminal Court relate to the responsibilities of business?

What other provisions of international law relate to the human rights responsibilities of business?

What are the international legal obligations of such non-state actors as businesses?

How can the international legal obligations of individuals be related to the responsibilities of businesses?

How can the international legal obligations of governments be related to the responsibilities of businesses?

What does the U.N. Secretary-General’s Global Compact contribute to the human rights and related responsibilities of business?

How has the Global Compact been received by (a) business, (b) the human rights community, (c) unions, and (d) others? How should they be received?

Are voluntary standards helpful for encouraging corporate social responsibility?

Are voluntary standards adequate for encouraging corporate social responsibility?

What does the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy contribute to the human rights and related responsibilities of business?

What contribution did the Sub-Commission and its Working Group make to the development of international human rights law as to the responsibilities of business?

Was it confusing for the Sub-Commission and its Working Group to draft further standards?

What is the relationship of the Norms of Responsibility to existing international human rights law?

Do the Human Rights Norms of Responsibility simply constitute a restatement of existing law or do they reflect a significant change? Is the change an improvement?

How do the Human Rights Norms deal with the international legal obligations of such non-state actors as businesses?

What is the relationship of the Human Rights Norms to the Global Compact and the ILO Tripartite Declaration?

How have the Human Rights Norms been received by (a) business, (b) the human rights community, (c) unions, and (d) others? How should they be received?

Do you agree that the primary objective of business is to gain profit? If not, what is the primary objective?

Do the Human Rights Norms conflict with the primary objective of business, that is, to gain profit for the owners?

What other issues have been raised with regard to the Norms?

What other criticisms would you make of the Norms?

How would you respond to the criticisms that have been or could be leveled at the Norms?

Should the Human Rights Norms apply to corporations, businesses, business enterprises, or some other formulation?

Should the Human Rights Norms apply to (a) transnational businesses only, (b) only multinational businesses, (c) only large businesses, (d) all businesses, or (e) some other formulation?

Is it realistic for the Human Rights Norms to apply to small businesses?

Commentary 4(d) provides, “Transnational corporations and other business enterprises shall ensure that guards in their employ are adequately trained and guided by the relevant international limitations and that the guards use caution with regard, for example, to the use of force and firearms.” Is that standard realistic for small companies? How could the Norms/Commentary be interpreted to make that standard realistic?

How do the Human Rights Norms handle these questions of nomenclature? Is that approach correct?

Are the definitions in the Human Rights Norms adequate to reach the actors to which standards should apply? Do they attempt to impose a one-size-fits-all approach to a variegated reality which is not capable of such a uniform approach? How can the Norms be improved in this regard?

Are the Human Rights Norms “hard law,” “soft law,” “voluntary,” or something else? How do you know?

What is the meaning of “hard law” or “soft law”?

How do the Human Rights Norms relate to these concepts?

What subjects should the Norms cover? Civil and political rights; economic, social and cultural rights; the right to development; humanitarian law; international labor law; environmental law; consumer protection law; anti-bribery/anti-corruption law; intellectual property law; other aspects of international law; and/or other subjects?

What subjects do the Norms cover?

Can the very comprehensive definition of human rights in the Norms be justified?

Is the name “Norms” appropriate for this document? What other name might have been better? Human Rights Principles, Principles and Responsibilities, Body of Principles, Guidelines, Universal Principles, Fundamental Principles, Standards, Code of Conduct, Body of Principles, Declaration, Rules, etc.?

Does it make a difference?

What implications do each of these names carry?

How should the Human Rights Norms handle the identification of the kinds of discrimination that should be forbidden? Compare the approach of the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the ILO Tripartite Declaration, the Human Rights Norms, etc.

What is the significance of the additional kinds of discrimination listed in the Commentary?

Should the Human Rights Norms forbid all child labour?

How do the Human Rights Norms handle this subject? Is that approach correct?

How do the Human Rights Norms and Commentary handle limitations on the number of hours worked during a week? Is that approach sensible?

How do the Human Rights Norms handle differences in the wages/salaries paid to workers in different countries, in different businesses, etc.? Is that approach sensible?

How do the Human Rights Norms deal with situations in which international law is more protective of human rights than national or local law? Is there a better approach? Does the Commentary indicate a different approach?

Commentary 3(b) of the Human Rights Norms states: “Transnational corporations and other business enterprises shall not produce or sell weapons that have been declared illegal under international law. Transnational corporations and other business enterprises shall not engage in trade that is known to lead to human rights or humanitarian law violations.”

Is that provision realistic?

Should the Human Rights Norms forbid the production, marketing, etc. of tobacco products?

Does it make a difference whether the Human Rights Norms have been approved by the (a) Working Group on the Working Methods and Activities of Transnational Corporations and (b) the Sub-Commission on the Promotion and Protection of Human Rights? Should the Norms be approved by (c) the Commission on Human Rights, (d) the Economic and Social Council, and/or (e) the General Assembly of the United Nations?

Is it realistic to expect the Human Rights Norms to be adopted by each of the above U.N. organs?

How long will the process take? Will the world wait?

Will it make a difference if the Norms are adopted without the Commentary?

What is the status of the Commentary?

Are there other ways to promulgate and endorse the Human Rights Norms?

How can the Human Rights Norms be used by (a) governments, (b) international organizations (c), businesses, (d) trade associations, (e) unions, (f) other nongovernmental organizations, (g) investors, (h) consumers, and (i) others?

What implementation procedures do the Human Rights Norms provide?

What use could courts, legislatures, and executive departments make of the Human Rights Norms?

What further implementation can you anticipate for the Human Rights Norms?

What other approach(es) to implementation would you suggest?

What more should be done to protect human rights in regard to the conduct of businesses?

What is the status of the Human Rights Norms in the U.N.?

* * * * * * * * * *

B. U.N. AND OTHER INTERNATIONAL HUMAN RIGHTS LAW RELEVANT TO THE RESPONSIBILITIES OF BUSINESS

Universal Declaration of Human Rights , G.A. res. 217A (III), U.N. Doc A/810 at 71 (1948).

The General Assembly,

Proclaims this Universal Declaration of Human Rights as a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance, both among the peoples of Member States themselves and among the peoples of territories under their jurisdiction. . . .

Article 2

Article 25

 

Individual criminal responsibility


1. The Court shall have jurisdiction over natural persons pursuant to this Statute.

2. A person who commits a crime within the jurisdiction of the Court shall be individually responsible and liable for punishment in accordance with this Statute.

3. In accordance with this Statute, a person shall be criminally responsible and liable for punishment for a crime within the jurisdiction of the Court if that person:

(a) Commits such a crime, whether as an individual, jointly with another or through another person, regardless of whether that other person is criminally responsible;

(b) Orders, solicits or induces the commission of such a crime which in fact occurs or is attempted;

(c) For the purpose of facilitating the commission of such a crime, aids, abets or otherwise assists in its commission or its attempted commission, including providing the means for its commission;

(d) In any other way contributes to the commission or attempted commission of such a crime by a group of persons acting with a common purpose. Such contribution shall be intentional and shall either:

(i) Be made with the aim of furthering the criminal activity or criminal purpose of the group, where such activity or purpose involves the commission of a crime within the jurisdiction of the Court; or

(ii) Be made in the knowledge of the intention of the group to commit the crime;

(e) In respect of the crime of genocide, directly and publicly incites others to commit genocide;

(f) Attempts to commit such a crime by taking action that commences its execution by means of a substantial step, but the crime does not occur because of circumstances independent of the person's intentions. However, a person who abandons the effort to commit the crime or otherwise prevents the completion of the crime shall not be liable for punishment under this Statute for the attempt to commit that crime if that person completely and voluntarily gave up the criminal purpose.

4. No provision in this Statute relating to individual criminal responsibility shall affect the responsibility of States under international law.

* * * * * * * * *

The Global Compact's Ten Principles

At the World Economic Forum in Davos on 31 January 1999, UN Secretary-General Kofi A. Annan challenged world business leaders to “embrace and enact” a set of universal principles within their sphere of influence in the areas of human rights, labour standards and the environment.

Human Rights

Principle 1

Support and respect the protection of internationally proclaimed human rights.

Principle 2

Business should make sure not to be complicit in human rights abuses.

Labour Standards

Principle 3

Business should uphold the freedom of association and the effective recognition of the right to collective bargaining;

Principle 4

the elimination of all forms of forced and compulsory labour;

Principle 5

the effective abolition of child labour; and

Principle 6

eliminate discrimination in respect of employment and occupation.

Environment

Principle 7

Support a precautionary approach to environmental challenges;

Principle 8

undertake initiatives to promote greater environmental responsibility; and

Principle 9

encourage the development and diffusion of environmentally friendly technologies.

In 2004 the Secretary-General added

Principle 10

Businesses should work against all forms of corruption, including extortion and bribery.

* * * * * * * * *

International Labour Organization, Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy , OB Vol. LXXXIII, 2000, Series A, No. 3) (adopted by the Governing Body of the International Labour Office at its 204th Session (Geneva, November 1977), 17 I.L.M. 422, as amended at its 279th Session (Geneva, November 2000), ILO Doc. GB.277/MNE/3 (2000 ) . <http://www.ilo.org/public/english/employment/multi/tridecl/index.htm> (last visited Dec. 18, 2001).

The Governing Body of the International Labour Office: . . .

7. This Declaration sets out principles in the fields of employment, training, conditions of work and life and industrial relations which governments, employers' and workers' organizations and multinational enterprises are recommended to observe on a voluntary basis; its provisions shall not limit or otherwise affect obligations arising out of ratification of any ILO Convention. . . .

8. All the parties concerned by this Declaration should respect the sovereign rights of States, obey the national laws and regulations, give due consideration to local practices and respect relevant international standards. They should respect the Universal Declaration of Human Rights and the corresponding International Covenants adopted by the General Assembly of the United Nations as well as the Constitution of the International Labour Organization and its principles according to which freedom of expression and association are essential to sustained progress. They should contribute to the realization of the ILO Declaration on Fundamental Principles and Rights and Work and its Follow-up, adopted in 1998. They should also honour commitments which they have freely entered into, in conformity with the national law and accepted international obligations. . . .

11. The principles laid down in this Declaration do not aim at introducing or maintaining inequalities of treatment between multinational and national enterprises. They reflect good practice for all. Multinational and national enterprises, wherever the principles of this Declaration are relevant to both, should be subject to the same expectations in respect of their conduct in general and their social practices in particular. . . .

21. All governments should pursue policies designed to promote equality of opportunity and treatment in employment, with a view to eliminating any discrimination based on race, colour, sex, religion, political opinion, national extraction or social origin . .

* * * * * * * * *

C. COMMENTARY ON THE NORMS ON THE REPONSIBILITIES OF TRANSNATIONAL CORPORATIONS AND OTHER BUSINESS ENTERPRISES WITH REGARD TO HUMAN RIGHTS

Commentary on the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, U.N. Doc. E/CN.4/Sub.2/2003/38/Rev.2 (2003 ).

 

Preamble

 

Bearing in mind the principles and obligations under the Charter of the United Nations, in particular the preamble and Articles 1, 2, 55, and 56, inter alia to promote universal respect for, and observance of, human rights and fundamental freedoms,

 

Recalling that the Universal Declaration of Human Rights proclaims a common standard of achievement for all peoples and all nations, to the end that Governments, other organs of society and individuals shall strive, by teaching and education, to promote respect for human rights and freedoms, and, by progressive measures, to secure universal and effective recognition and observance, including of equal rights of women and men and the promotion of social progress and better standards of life in larger freedom,

 

Recognizing that even though States have the primary responsibility to promote, secure the fulfillment of, respect, ensure respect of and protect human rights, transnational corporations and other business enterprises, as organs of society, are also responsible for promoting and securing the human rights set forth in the Universal Declaration of Human Rights,

 

Realizing that transnational corporations and other business enterprises, their officers and persons working for them are also obligated to respect generally recognized responsibilities and norms contained in United Nations treaties and other international instruments such as the Convention on the Prevention and Punishment of the Crime of Genocide; the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment; the Slavery Convention and the Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices Similar to Slavery; the International Convention on the Elimination of All Forms of Racial Discrimination; the Convention on the Elimination of All Forms of Discrimination against Women; the International Covenant on Economic, Social and Cultural Rights; the International Covenant on Civil and Political Rights; the Convention on the Rights of the Child; the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families; the four Geneva Conventions of 12 August 1949 and two Additional Protocols thereto for the protection of victims of war; the Declaration on the Right and Responsibility of Individuals, Groups and Organs of Society to Promote and Protect Universally Recognized Human Rights and Fundamental Freedoms; the Rome Statute of the International Criminal Court; the United Nations Convention against Transnational Organized Crime; the Convention on Biological Diversity; the International Convention on Civil Liability for Oil Pollution Damage; the Convention on Civil Liability for Damage Resulting from Activities Dangerous to the Environment; the Declaration on the Right to Development; the Rio Declaration on the Environment and Development; the Plan of Implementation of the World Summit on Sustainable Development; the United Nations Millennium Declaration; the Universal Declaration on the Human Genome and Human Rights; the International Code of Marketing of Breast-milk Substitutes adopted by the World Health Assembly; the Ethical Criteria for Medical Drug Promotion and the “Health for All in the Twenty-First Century” policy of the World Health Organization; the Convention against Discrimination in Education of the United Nations Educational, Scientific, and Cultural Organization; conventions and recommendations of the International Labour Organization; the Convention and Protocol relating to the Status of Refugees; the African Charter on Human and Peoples’ Rights; the American Convention on Human Rights; the European Convention for the Protection of Human Rights and Fundamental Freedoms; the Charter of Fundamental Rights of the European Union; the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of the Organisation for Economic Cooperation and Development; and other instruments,

 

Taking into account the standards set forth in the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy and the Declaration on Fundamental Principles and Rights at Work of the International Labour Organization,

 

Aware of the Guidelines for Multinational Enterprises and the Committee on International Investment and Multinational Enterprises of the Organisation for Economic Cooperation and Development,

 

Aware also of the United Nations Global Compact initiative which challenges business leaders to “embrace and enact” nine basic principles with respect to human rights, including labour rights and the environment,

 

Conscious of the fact that the Governing Body Subcommittee on Multinational Enterprises and Social Policy, the Committee of Experts on the Application of Standards, as well as Committee on Freedom of Association of the International Labour Organization have named business enterprises implicated in States’ failure to comply with Conventions No. 87 concerning the Freedom of Association and Protection of the Right to Organize and No. 98 concerning the Application of the Principles of the Right to Organize and Bargain Collectively, and seeking to supplement and assist their efforts to encourage transnational corporations and other business enterprises to protect human rights,

 

Conscious also of the Commentary on the Norms on the responsibilities of transnational corporations and other business enterprises with regard to human rights, and finding it a useful interpretation and elaboration of the standards contained in the Norms,

 

Taking note of global trends which have increased the influence of transnational corporations and other business enterprises on the economies of most countries and in international economic relations, and of the growing number of other business enterprises which operate across national boundaries in a variety of arrangements resulting in economic activities beyond the actual capacities of any one national system,

 

Noting that transnational corporations and other business enterprises have the capacity to foster economic well-being, development, technological improvement and wealth, as well as the capacity to cause harmful impacts on the human rights and lives of individuals through their core business practices and operations, including employment practices, environmental policies, relationships with suppliers and consumers, interactions with Governments and other activities,

 

Noting also that new international human rights issues and concerns are continually emerging and that transnational corporations and other business enterprises often are involved in these issues and concerns, such that further standard-setting and implementation are required at this time and in the future,

 

Acknowledging the universality, indivisibility, interdependence and interrelatedness of human rights, including the right to development, which entitles every human person and all peoples to participate in, contribute to and enjoy economic, social, cultural and political development in which all human rights and fundamental freedoms can be fully realized,

 

Reaffirming that transnational corporations and other business enterprises, their officers – including managers, members of corporate boards or directors and other executives - and persons working for them, inter alia, human rights obligations and responsibilities and that these human rights norms will contribute to the making and development of international law as to those responsibilities and obligations,

 

Solemnly proclaims these Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights and urges that every effort be made so that they become generally known and respected.

 

A. General obligations

 

1. States have the primary responsibility to promote, secure the fulfillment of, respect, ensure respect of and protect human rights recognized in international as well as national law, including ensuring that transnational corporations and other business enterprises respect human rights. Within their respective spheres of activity and influence, transnational corporations and other business enterprises have the obligation to promote, secure the fulfillment of, respect, ensure respect of and protect human rights recognized in international as well as national law, including the rights and interests of indigenous peoples and other vulnerable groups.

 

Commentary

 

(a) This paragraph reflects the primary approach of the Norms and the remainder of the Norms shall be read in the light of this paragraph. The obligation of transnational corporations and other business enterprises under these Norms applies equally to activities occurring in the home country or territory of the transnational corporation or other business enterprise, and in any country in which the business is engaged in activities.

 

(b) Transnational corporations and other business enterprises shall have the responsibility to use due diligence in ensuring that their activities do not contribute directly or indirectly to human abuses, and that they do not directly or indirectly benefit from abuses of which they were aware or ought to have been aware. Transnational corporations and other business enterprises shall further refrain from activities that would undermine the rule of law as well as governmental and other efforts to promote and ensure respect for human rights, and shall use their influence in order to help promote and ensure respect for human rights. Transnational corporations and other business enterprises shall inform themselves of the human rights impact of their principal activities and major proposed activities so that they can further avoid complicity in human rights abuses. The Norms may not be used by States as an excuse for failing to take action to protect human rights, for example, through the enforcement of existing laws.

 

B. Right to equal opportunity and non-discriminatory treatment

2. Transnational corporations and other business enterprises shall ensure equality of opportunity and treatment, as provided in the relevant international instruments and national legislation as well as international human rights law, for the purpose of eliminating discrimination based on race, colour, sex, language, religion, political opinion, national or social origin, social status, indigenous status, disability, age - except for children, who may be given greater protection - or other status of the individual unrelated to the inherent requirements to perform the job or of complying with special measures designed to overcome past discrimination against certain groups.

 

Commentary

 

(a) Transnational corporations and other business enterprises shall treat each worker with equality, respect and dignity. Examples of the other sorts of status on the basis of which discrimination should be eliminated are health status (including HIV/AIDS, disability), marital status, capacity to bear children, pregnancy and sexual orientation. No worker shall be subject to direct or indirect physical, sexual, racial, psychological, verbal, or any other discriminatory form of harassment or abuse as defined above. No worker shall be subject to intimidation or degrading treatment or be disciplined without fair procedures. Transnational corporations and other business enterprises shall establish a work environment in which it is clear that such discrimination will not be tolerated. These responsibilities shall be carried out in accordance with the Code of Practice on HIV/AIDS and the World of Work and the Code of Practice on Managing Disability in the Workplace of the International Labour Convention (ILO) and other relevant international instruments.

 

(b) Discrimination means any distinction, exclusion, or preference made on the above-stated bases, which has the effect nullifying or impairing equality of opportunity or treatment in employment or occupation. All policies of transnational corporations and other business enterprises, including, but not limited to, those relating to recruitment, hiring, discharge, pay, promotion and training, shall be non-discriminatory.

 

(c) Particular attention should be devoted to the consequences of business activities that may affect the rights of women and particularly in regard to conditions of work.

 

(d) Transnational corporations and other business enterprises shall treat other stakeholders, such as indigenous peoples and communities, with respect and dignity, and on a basis of equality.

 

C. Right to security of persons

 

3. Transnational corporations and other business enterprises shall not engage in nor benefit from war crimes, crimes against humanity, genocide, torture, forced disappearance, forced or compulsory labour, hostage-taking, extrajudicial, summary or arbitrary executions, other violations of humanitarian law and other international crimes against the human person as defined by international law, in particular human rights and humanitarian law.

 

Commentary

 

(a) Transnational corporations and other business enterprises which produce and/or supply military, security, or police products/services shall take stringent measures to prevent those products and services from being used to commit human rights or humanitarian law violations and to comply with evolving best practices in this regard.

 

(b) Transnational corporations and other business enterprises shall not produce or sell weapons that have been declared illegal under international law. Transnational corporations and other business enterprises shall not engage in trade that is known to lead to human rights or humanitarian law violations.

 

4. Security arrangements for transnational corporations and other business enterprises shall observe international human rights norms as well as the laws and professional standards of the country or countries in which they operate.

 

Commentary

 

(a) Transnational corporations and other business enterprises, their officers, workers, contractors, subcontractors, suppliers, licensees and distributors, and natural or other legal persons that enter into any agreement with the transnational corporation or business enterprise shall observe international human rights norms, particularly as set forth in the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment; the Rome Statute of the International Criminal Court; the United Nations Basic Principles on the Use of Force and Firearms by Law Enforcement Officials; the United Nations Code of Conduct for Law Enforcement Officials; and emerging best practices developed by the industry, civil society and Governments.

 

(b) Business security arrangements shall be used only for preventive or defensive services and they shall not be used for activities that are exclusively the responsibility of the State military or law enforcement services. Security personnel shall only use force when strictly necessary and only to the extent proportional to the threat.

 

(c) Security personnel shall not violate the rights of individuals while exercising the rights to freedom of association and peaceful assembly, to engage in collective bargaining, or to enjoy other related rights of workers and employers, such as are recognized by the International Bill of Human Rights and the Declaration on Fundamental Principles and Rights at Work of the ILO.

 

(d) Transnational corporations and other business enterprises shall establish policies to prohibit the hiring of individuals, private militias and paramilitary groups, or working with units of State security forces or contract security firms that are known to have been responsible for human rights or humanitarian law violations. Transnational corporations and other business enterprises shall engage with due diligence in investigations of potential security guards or other security providers before they are hired and ensure that guards in their employ are adequately trained, guided by and follow relevant international limitations with regard, for example, to the use of force and firearms. If a transnational corporation or other business enterprise contracts with a State security force or a private security firm, the relevant provisions of these Norms (paragraphs 3 and 4 as well as the related commentary) shall be incorporated into the contract and at least those provisions should be made available upon request to stakeholders in order to ensure compliance.

 

(e) Transnational corporations and other business enterprises using public security forces shall consult regularly with host Governments and, where appropriate, non-governmental organizations and communities concerning the impact of their security arrangements on local communities. Transnational corporations and other business enterprises shall communicate their policies regarding ethical conduct and human rights, and express their desire that security be provided in a manner consistent with those policies by personnel with adequate and effective training.

 

D. Rights of workers

 

5. Transnational corporations and other business enterprises shall not use forced or compulsory labour as forbidden by the relevant international instruments and national legislation as well as international human rights and humanitarian law.

 

Commentary

 

(a) Transnational corporations and other business enterprises shall not use forced or compulsory labour, as forbidden in the ILO Forced Labour Convention, 1930 (No. 29) and the Abolition of Forced Labour Convention, 1957 (No. 105) and other relevant international human rights instruments. Workers shall be recruited, paid, and provided with just and favourable conditions of work. They shall take all feasible measures to prevent workers falling into debt bondage and other contemporary forms of slavery.

 

(b) Workers shall have the option to leave employment and the employer shall facilitate such departure by providing all the necessary documentation and assistance.

 

(c) Employers shall have resort to prison labour only in the conditions spelled out in ILO Convention No. 29, which allows such labour only as a consequence of a conviction in a court of law provided that the work or service is carried out under the supervision and control of a public authority and that the person concerned is not hired out to or placed at the disposal of private individuals, companies or associations.

 

6. Transnational corporations and other business enterprises shall respect the rights of children to be protected from economic exploitation as forbidden by the relevant international instruments and national legislation as well as international human rights and humanitarian law.

 

Commentary

 

(a) Economic exploitation of children includes employment or work in any occupation before a child completes compulsory schooling and, except for light work, before the child reaches 15 years of age or the end of compulsory schooling. Economic exploitation also includes the employment of children in a manner that is harmful to their health or development, will prevent children from attending school or performing school-related responsibilities, or otherwise is not consistent with human rights standards such as the Minimum Age Convention (No. 138) and Recommendation (No. 146), the Worst Forms of Child Labour Convention (No. 182) and Recommendation (No. 190) and the Convention on the Rights of the Child. Economic exploitation does not include work done by children in schools for general, vocational, or technical education or in other training institutions.

 

(b) Transnational corporations and other business enterprises shall not employ any person under the age of 18 in any type of work that by its nature or circumstances is hazardous, interferes with the child’s education, or is carried out in a way likely to jeopardize the health, safety, or morals of young persons.

 

(c) Transnational corporations and other business enterprises may employ persons aged 13 to 15 years in light work if national laws or regulations permit. Light work is defined as work which is not likely to be harmful to the health or development of the child, and will not prejudice school attendance, participation in vocational orientation, training programmes approved by competent authority, or the child’s capacity to benefit from the instruction received.

 

(d) Transnational corporations and other business enterprises shall consult with Governments on the design and implementation of national action programmes to eliminate the worst forms of child labour consistent with ILO Convention No.182. Transnational corporations and other business enterprises using child labour shall create and implement a plan to eliminate child labour. Such a plan shall assess what will happen to children when they are no longer employed in the business and include measures such as withdrawing children from the workplace in tandem with the provision of suitable opportunities for schooling, vocational training and other social protection for the children and their families, for example by employing the parents or older siblings or engaging in other measures consistent with ILO Recommendations Nos. 146 and 190.

 

7. Transnational corporations and other business enterprises shall provide a safe and healthy working environment as set forth in relevant international instruments and national legislation as well as international human rights and humanitarian law.

 

Commentary

 

(a) Transnational corporations and other business enterprises bear responsibility for the occupational health and safety of their workers and shall provide a working environment in accordance with the national requirements of the countries in which they are located and with international standards such as those found in the International Covenant on Economic, Social and Cultural Rights; ILO Conventions Nos. 110 (Plantations, 1958) 115 (Radiation Protection Convention, 1960), 119 (Guarding of Machinery Convention, 1963), 120 (Hygiene (Commerce and Offices) Convention, 1964), 127 (Maximum Weight Convention, 1967), 136 (Benzene Convention, 1971), 139 (Occupational Cancer Convention, 1974), 147 (Merchant Shipping, 1976), 148 (Working Environment (Air Pollution, Noise and Vibration) Convention, 1977), 155 (Occupational Safety and Health Convention, 1981), 161 (Occupational Health Services Convention, 1985), 162 (Asbestos Convention, 1986), 167 (Safety and Health in Construction Convention, 1988), 170 (Chemicals Convention, 1990), 174 (Prevention of Major Industrial Accidents Convention, 1993), 176 (Safety and Health in Mines Convention, 1995), 183 (Maternity Protection, 2000) and other relevant recommendations; as well as ensuring their application under ILO Conventions Nos. 81 (Labour Inspection Convention, 1947), 129 (Labour Inspection (Agriculture) Convention, 1969), 135 (Workers’ Representatives Convention, 1971), and their successor conventions. Such a safe and healthy work environment for women and men shall aid in the prevention of accidents and injuries arising out of, linked with, or occurring within the course of work. Transnational corporations and other business enterprises shall also take into account the particular needs of migrant workers as set forth in the Migrant Workers (Supplementary Provisions) Convention, 1975 (No. 143) and the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families.

 

(b) Consistent with paragraph 15 (a), transnational corporations and other business enterprises shall make available information about the health and safety standards relevant to their local activities. The information shall also include arrangements for training in safe working practices and details on the effects of all substances used in manufacturing processes. In particular, and additionally consistent with paragraph 15 (e), transnational corporations and other business enterprises shall make known any special hazards that tasks or conditions of work involve and the related measures available to protect the workers.

 

(c) Transnational corporations and other business enterprises shall provide, where necessary, measures to deal with emergencies and accidents, including first-aid arrangements. They also shall provide, at their expense, personal protective clothing and equipment when necessary. Further, they shall incur expenses for occupational health and safety measures.

 

(d) Transnational corporations and other business enterprises shall consult and cooperate fully with health, safety and labour authorities, workers’ representatives and their organizations and established safety and health organizations on matters of occupational health and safety. They shall cooperate in the work of international organizations concerned with the preparation and adoption of international safety and health standards. Where appropriate, matters relating to safety and health should be incorporated in agreements with the representatives of the workers and their organizations. Transnational corporations and other business enterprises shall examine the causes of safety and health hazards in their industry and work to implement improvements and solutions to those conditions, including the provision of safe equipment at least consistent with industry standards. Further, they shall monitor the working environment and the health of workers liable to exposure to specified hazards and risks. Transnational corporations and other business enterprises shall investigate work-related accidents, keep records of incidents stating their cause and remedial measures taken to prevent similar accidents, ensure the provision of remedies for the injured, and otherwise act in accordance with paragraph 16 (e).

 

(e) Consistent with paragraph 16 (e), transnational corporations and other business enterprises shall also: (i) respect the right of workers to remove themselves from work situations in which there is a reasonable basis for concern about present, imminent and serious danger to life or health; (ii) not subject them to consequences as a result; and further (iii) not require them to return to work situations as long as the condition continues.

 

(f) Transnational corporations and other business enterprises shall not require any worker to work more than 48 hours per week or more than 10 hours in one day. Voluntary overtime for workers shall not exceed 12 hours per week and shall not be expected on a regular basis. Compensation for such overtime shall be at a rate higher than the normal rate. Each worker shall be given at least one day off in every seven-day period. These protections may be adjusted to meet the different needs of management personnel; construction, exploration and similar workers who work for short periods (e.g. a week or two) followed by a comparable period of rest; and professionals who have clearly indicated their personal desire to work more hours.

 

8. Transnational corporations and other business enterprises shall provide workers with remuneration that ensures an adequate standard of living for them and their families. Such remuneration shall take due account of their needs for adequate living conditions with a view towards progressive improvement.

 

Commentary

 

(a) Transnational corporations and other business enterprises shall provide workers with fair and reasonable remuneration for work done or to be done, freely agreed upon or fixed by national laws or regulations (whichever is higher), payable regularly and at short intervals in legal tender, so as to ensure an adequate standard of living for workers and their families. Operations in the least developed countries shall take particular care to provide just wages. Wages shall be paid, consistent with international standards such as the Protection of Wages Convention, 1949 (No. 95). Wages are a contractual obligation of employers that are to be honoured even into insolvency in accordance with Workers’ Claims (Employer’s Insolvency) Convention, 1992 (No. 173).

 

(b) Transnational corporations and other business enterprises shall not deduct from a worker’s wages already earned as a disciplinary measure, nor shall any deduction from wages be permitted under conditions or to an extent other than as prescribed by national laws or regulations, or fixed by a collective agreement or arbitration award. Transnational

corporations and other business enterprises shall also avoid taking actions to undermine the value of employee benefits, including pensions, deferred compensation and health care.(c) Transnational corporations and other business enterprises shall keep detailed written records on each worker’s hours of work and wages paid. Workers shall be informed in an appropriate and easily understandable manner before they enter employment and when any changes take place as to the conditions in respect of wages, salaries and additional emoluments under which they are employed. At the time of each payment of wages, workers shall receive a wage statement informing them of such particulars relating to the pay period concerned as the gross amount of wages earned, any deduction which may have been made, including the reasons therefore, and the net amount of wages due.

 

(d) Transnational corporations and other business enterprises shall not limit in any manner the freedom of workers to dispose of their wages, nor shall they exert any coercion on workers to make use of company stores or services, where such stores exist. In cases in which the partial payment of wages in the form of allowances in kind is authorized by national laws or regulations, collective agreements, or arbitration awards, transnational corporations and other business enterprises shall ensure that such allowances are appropriate for the personal use and benefit of workers and their families and that the value attributed to such allowances is fair and reasonable.

 

(e) In determining a wage policy and rates of remuneration, transnational corporations and other business enterprises shall ensure the application of the principle of equal remuneration for work of equal value and the principle of equality of opportunity and treatment in respect of employment and occupation, in accordance with international standards such as the Equal Remuneration Convention, 1951 (No. 100), The Discrimination in Employment and Occupation Convention, 1958 (No. 111) and the Workers with Family Responsibilities Convention, 1981 (No. 156).

 

9. Transnational corporations and other business enterprises shall ensure freedom of association and effective recognition of the right to collective bargaining by protecting the right to establish and, subject only to the rules of the organization concerned, to join organizations of their own choosing without distinction, previous authorization, or interference, for the protection of their employment interests and for other collective bargaining purposes as provided in national legislation and the relevant conventions of the International Labour Organization.

 

Commentary

 

(a) Transnational corporations and other business enterprises shall respect workers’ and employers’ freedom of association consistent with the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87) and other international human rights law. They shall respect the rights of workers’ organizations to function independently and without interference, including with respect to the right of workers’ organizations to draw up their constitutions and rules, to elect their representatives, to organize their administration and activities and to formulate their programmes. Further, they shall refrain from discriminating against workers by reason of trade union membership or participation in trade union activities, and shall refrain from any interference that restricts these rights or impedes their lawful exercise. They shall ensure that the existence of workers’ representatives does not undermine the position of the union established consistent with international standards, and that workers’ representatives are entitled to bargain collectively only where there is no such union in the company. Where appropriate in the local circumstances, multinational enterprises shall support representative employers’ organizations.

 

(b) Transnational corporations and other business enterprises shall recognize workers’ organizations for the purpose of collective bargaining consistent with the Right to Organize and Collective Bargaining Convention, 1949 (No. 98) and other international human rights law. They shall respect the right of workers to strike, to submit grievances, including grievances as to compliance with these Norms, to fair and impartial persons who have the authority to redress any abuses found, and to be protected from suffering prejudice for using those procedures, consistent with the norms contained in the Collective Bargaining Convention, 1981 (No. 154).

 

(c) Transnational corporations and other business enterprises shall enable representatives of their workers to conduct negotiations on their terms and conditions of employment with representatives of management who are authorized to make decisions about the issues under negotiation. They shall further give workers and their representatives access to information, facilities and other resources, and ensure internal communications, consistent with international standards such as the Workers’ Representatives Convention, 1971 (No. 135) and the Communications within the Undertaking Recommendation, 1967 (No. 129) that are relevant and necessary for their representatives to conduct negotiations effectively and without unnecessary harm to legitimate interests of employers.

 

(d) Transnational corporations and other business enterprises shall abide by provisions in collective bargaining agreements that provide for the settlement of disputes arising over their interpretation and application and also by decisions of tribunals or other mechanisms empowered to make determinations on such matters. Transnational corporations and other business enterprises jointly with the representatives and organizations of workers shall seek to establish voluntary conciliation machinery, appropriate to national conditions, which may include provisions for voluntary arbitration, to assist in the prevention and settlement of industrial disputes between employers and workers.

 

(e) Transnational corporations and other business enterprises shall take particular care to protect the rights of workers from procedures in countries that do not fully implement international standards regarding freedom of association, the right to organize and the right to bargain collectively.

 

E. Respect for national sovereignty and human rights

 

10. Transnational corporations and other business enterprises shall recognize and respect applicable norms of international law, national laws and regulations, as well as administrative practices, the rule of law, the public interest, development objectives, social, economic and cultural policies including transparency, accountability and prohibition of corruption, and authority of the countries in which the enterprises operate.

 

Commentary

 

(a) Transnational corporations and other business enterprises, within the limits of their resources and capabilities, shall encourage social progress and development by expanding economic opportunities - particularly in developing countries and, most importantly, in the least developed countries.

 

(b) Transnational corporations and other business enterprises shall respect the right to development, which all peoples are entitled to participate in and contribute to, and the right to enjoy economic, social, cultural and political development in which all human rights and fundamental freedoms can be fully realized and in which sustainable development can be achieved so as to protect the rights of future generations.

 

(c) Transnational corporations and other business enterprises shall respect the rights of local communities affected by their activities and the rights of indigenous peoples and communities consistent with international human rights standards such as the Indigenous and Tribal Peoples Convention, 1989 (No. 169). They shall particularly respect the rights of indigenous peoples and similar communities to own, occupy, develop, control, protect and use their lands, other natural resources, and cultural and intellectual property. They shall also respect the principle of free, prior and informed consent of the indigenous peoples and communities to be affected by their development projects. Indigenous peoples and communities shall not be deprived of their own means of subsistence, nor shall they be removed from lands which they occupy in a manner inconsistent with Convention No. 169. Further, they shall avoid endangering the health, environment, culture and institutions of indigenous peoples and communities in the context of projects, including road building in or near indigenous peoples and communities. Transnational corporations and other business enterprises shall use particular care in situations in which indigenous lands, resources, or rights thereto have not been adequately demarcated or defined.

 

(d) Transnational corporations and other business enterprises shall respect, protect and apply intellectual property rights in a manner that contributes to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge, in a manner conducive to social and economic welfare, such as the protection of public health, and to a balance of rights and obligations.

 

11. Transnational corporations and other business enterprises shall not offer, promise, give, accept, condone, knowingly benefit from, or demand a bribe or other improper advantage, nor shall they be solicited or expected to give a bribe or other improper advantage to any Government, public official, candidate for elective post, any member of the armed forces or security forces, or any other individual or organization. Transnational corporations and other business enterprises shall refrain from any activity which supports, solicits, or encourages States or any other entities to abuse human rights. They shall further seek to ensure that the goods and services they provide will not be used to abuse human rights.

 

Commentary

 

(a) Transnational corporations and other business enterprises shall enhance the transparency of their activities in regard to payments made to Governments and public officials; openly fight against bribery, extortion and other forms of corruption; and cooperate with State authorities responsible for combating corruption.

 

(b) Transnational corporations and other business enterprises shall not receive payment, reimbursement, or other benefit in the form of natural resources without the approval of the recognized Government of the State of origin of such resources.

 

(c) Transnational corporations and other business enterprises shall assure that the information in their financial statements fairly presents in all material respects the financial condition, results of operations and cash flows of the business.

 

12. Transnational corporations and other business enterprises shall respect economic, social and cultural rights as well as civil and political rights and contribute to their realization, in particular the rights to development, adequate food and drinking water, the highest attainable standard of physical and mental health, adequate housing, privacy, education, freedom of thought, conscience, and religion and freedom of opinion and expression, and shall refrain from actions which obstruct or impede the realization of those rights.

 

Commentary

 

(a) Transnational corporations and other business enterprises shall observe standards that promote the availability, accessibility, acceptability and quality of the right to health, for example as identified in article 12 of the International Covenant on Economic, Social and Cultural Rights, general comment No. 14 on the right to the highest attainable standard of health adopted by the Committee on Economic, Social and Cultural Rights and the relevant standards established by the World Health Organization.

 

(b) Transnational corporations and other business enterprises shall observe standards which promote the availability of food in a quantity and of a quality sufficient to satisfy the dietary needs of individuals, free from adverse substances, acceptable within a given culture, accessible in ways that are sustainable and do not interfere with the enjoyment of other human rights, and are otherwise in accordance with international standards such as article 11 of the International Covenant on Economic, Social and Cultural Rights and general comment No. 12 on the right to adequate food adopted by the Committee on Economic, Social and Cultural Rights. Transnational corporations and other business enterprises shall further observe standards which protect the right to water and are otherwise in accordance with general comment No. 15 adopted by the Committee on Economic, Social and Cultural Rights on the right to water.

 

(c) Transnational corporations and other business enterprises shall further observe standards which protect the right to adequate housing and are otherwise in accordance with article 11 of the International Covenant on Economic, Social and Cultural Rights and general comment No. 7 adopted by the Committee on Economic, Social and Cultural Rights on the right to adequate housing: forced evictions. Transnational corporations and other business enterprises shall not forcibly evict individuals, families and/or communities against their will from their homes and/or land which they occupy without having had recourse to, and access to, appropriate forms of legal or other protection pursuant to international human rights law.

 

(d) Transnational corporations and other business enterprises shall observe standards that protect other economic, social and cultural rights and are otherwise in accordance with the International Covenant on Economic, Social and Cultural Rights and the relevant general comments adopted by the Committee on Economic, Social and Cultural Rights, paying particular attention to the implementation of norms stated in paragraphs 16 (g) and (i).

 

(e) Transnational corporations and other business enterprises shall observe standards that protect civil and political rights and are otherwise in accordance with the International Covenant on Civil and Political Rights and the relevant general comments adopted by the Human Rights Committee.

 

F. Obligations with regard to consumer protection

 

13. Transnational corporations and other business enterprises shall act in accordance with fair business, marketing and advertising practices and shall take all necessary steps to ensure the safety and quality of the goods and services they provide, including observance of the precautionary principle. Nor shall they produce, distribute, market, or advertise harmful or potentially harmful products for use by consumers.

 

Commentary

 

(a) Transnational corporations and other business enterprises shall adhere to the relevant international standards of business practice regarding competition and anti-trust matters, such as The Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices of the United Nations Conference on Trade and Development. A transnational corporation or other business enterprise shall encourage the development and maintenance of fair, transparent and open competition by not entering into arrangements with competing businesses to directly or indirectly fix prices, divide territories, or create monopoly positions.

 

(b) Transnational corporations and other business enterprises shall observe relevant international standards for the protection of consumers, such as the United Nations Guidelines for Consumer Protection, and relevant international standards for the promotion of specific products, such as the International Code of Marketing of Breast-milk Substitutes adopted by the World Health Assembly and the Ethical Criteria for Medical Drug Promotion of the World Health Organization. Transnational corporations and other business enterprises shall ensure that all marketing claims are independently verifiable, satisfy reasonable and relevant legal levels of truthfulness, and are not misleading. Further, they shall not target children when advertising potentially harmful products.

 

(c) Transnational corporations and other business enterprises shall ensure that all goods and services they produce, distribute, or market are capable of use for the purposes claimed, safe for intended and reasonably foreseeable uses, do not endanger the life or health of consumers, and are regularly monitored and tested to ensure compliance with these standards, in the context of reasonable usage and custom. They shall adhere to relevant international standards so as to avoid variations in the quality of products that would have detrimental effects on consumers, especially in States lacking specific regulations on product quality. They shall further respect the precautionary principle when dealing, for example, with preliminary risk assessments that may indicate unacceptable effects on health or the environment. Further, they shall not use the lack of full scientific certainty as a reason to delay the introduction of cost-effective measures intended to prevent such effects.

 

(d) Any information provided by a transnational corporation or other business enterprise with regard to the purchase, use, content, maintenance, storage and disposal of its products and services shall be provided in a clear, comprehensible and prominently visible manner and in the language officially recognized by the country in which such products or services are provided. Transnational corporations and other business enterprises, when appropriate, shall also provide information regarding the appropriate recycling, reusability and disposal of its products and services.

 

(e) Consistent with paragraph 15 (e), where a product is potentially harmful to the consumer, transnational corporations and other business enterprises shall disclose all appropriate information on the contents and possible hazardous effects of the products they produce through proper labeling, informative and accurate advertising and other appropriate methods. In particular, they shall warn if death or serious injury is probable from a defect, use, or misuse. Transnational corporations and other business enterprises shall supply appropriate information of potentially harmful products to the relevant authorities. This information shall include the characteristics of products or services that may cause injury to the health and safety of consumers, workers, or others, and information regarding restrictions, warnings and other regulatory measures imposed by several countries as to these products or services on the grounds of health and safety protection.

 

G. Obligations with regard to environmental protection

 

14. Transnational corporations and other business enterprises shall carry out their activities in accordance with national laws, regulations, administrative practices and policies relating to the preservation of the environment of the countries in which they operate, as well as in accordance with relevant international agreements, principles, objectives, responsibilities and standards with regard to the environment as well as human rights, public health and safety, bioethics and the precautionary principle, and shall generally conduct their activities in a manner contributing to the wider goal of sustainable development.

 

Commentary

 

(a) Transnational corporations and other business enterprises shall respect the right to a clean and healthy environment in the light of the relationship between the environment and human rights; concerns for intergenerational equity; internationally recognized environmental standards, for example with regard to air pollution, water pollution, land use, biodiversity and hazardous wastes; and the wider goal of sustainable development, that is, development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

 

(b) Transnational corporations and other business enterprises shall be responsible for the environmental and human health impact of all of their activities, including any products or services they introduce into commerce, such as packaging, transportation and by-products of the manufacturing process.

 

(c) Consistent with paragraph 16 (i), in decision-making processes and on a periodic basis (preferably annually or biannually), transnational corporations and other business enterprises shall assess the impact of their activities on the environment and human health including impacts from siting decisions, natural resource extraction activities, the production and sale of products or services, and the generation, storage, transport and disposal of hazardous and toxic substances. Transnational corporations and other business enterprises shall ensure that the burden of negative environmental consequences shall not fall on vulnerable racial, ethnic and socio-economic groups.

 

(d) Assessments shall, inter alia, address particularly the impact of proposed activities on certain groups, such as children, older persons, indigenous peoples and communities (particularly in regard to their land and natural resources), and/or women. Transnational corporations and other business enterprises shall distribute such reports in a timely manner and in a manner that is accessible to the United Nations Environmental Programme, the ILO, other interested international bodies, the national Government hosting each company, the national Government where the business maintains its principal office and other affected groups. The reports shall be accessible to the general public.

 

(e) Transnational corporations and other business enterprises shall respect the prevention principle, for example by preventing and/or mitigating deleterious impacts identified in any assessment. They shall also respect the precautionary principle when dealing, for example, with preliminary risk assessments that may indicate unacceptable effects on health or the environment. Further, they shall not use the lack of full scientific certainty as a reason to delay the introduction of cost-effective measures intended to prevent such effects.

 

(f) Upon the expiration of the useful life of their products or services, transnational corporations and other business enterprises shall ensure effective means of collecting or arranging for the collection of the remains of the product or services for recycling, reuse and/or environmentally responsible disposal.

 

(g) Transnational corporations and other business enterprises shall take appropriate measures in their activities to reduce the risk of accidents and damage to the environment by adopting best management practices and technologies. In particular, they shall use best management practices and appropriate technologies and enable their component entities to meet these environmental objectives through the sharing of technology, knowledge and assistance, as well as through environmental management systems, sustainability reporting, and reporting of anticipated or actual releases of hazardous and toxic substances. In addition, they shall educate and train workers to ensure their compliance with these objectives.

 

H. General provisions of implementation

 

15. As an initial step towards implementing these Norms, each transnational corporation or other business enterprise shall adopt, disseminate and implement internal rules of operation in compliance with the Norms. Further, they shall periodically report on and take other measures fully to implement the Norms and to provide at least for the prompt implementation of the protections set forth in the Norms. Each transnational corporation or other business enterprise shall apply and incorporate these Norms in their contracts or other arrangements and dealings with contractors, subcontractors, suppliers, licensees, distributors, or natural or other legal persons that enter into any agreement with the transnational corporation or business enterprise in order to ensure respect for and implementation of the Norms.

 

Commentary

 

(a) Each transnational corporation or other business enterprise shall disseminate its internal rules of operation or similar measures, as well as implementation procedures, and make them available to all relevant stakeholders. The internal rules of operation or similar measures shall be communicated in oral and written form in the language of workers, trade unions, contractors, subcontractors, suppliers, licensees, distributors, natural or other legal persons that enter into contracts with the transnational corporation or other business enterprise, customers and other stakeholders in the transnational corporation or other business enterprise.

 

(b) Once internal rules of operation or similar measures have been adopted and disseminated, transnational corporations and other business enterprises shall - to the extent of their resources and capabilities - provide effective training for their managers as well as workers and their representatives in practices relevant to the Norms.

 

(c) Transnational corporations and other business enterprises shall ensure that they only do business with (including purchasing from and selling to) contractors, subcontractors, suppliers, licensees, distributors, and natural or other legal persons that follow these or substantially similar Norms. Transnational corporations and other business enterprises using or considering entering into business relationships with contractors, subcontractors, suppliers, licensees, distributors, or natural or other legal persons that do not comply with the Norms shall initially work with them to reform or decrease violations, but if they will not change, the enterprise shall cease doing business with them.

 

(d) Transnational corporations and other business enterprises shall enhance the transparency of their activities by disclosing timely, relevant, regular and reliable information regarding their activities, structure, financial situation and performance. They shall also make known the location of their offices, subsidiaries and factories, so as to facilitate measures to ensure that the enterprises, products and services are being produced under conditions that respect these Norms.

 

(e) Transnational corporations and other business enterprises shall inform in a timely manner everyone who may be affected by conditions caused by the enterprises that might endanger health, safety, or the environment.

 

(f) Each transnational corporation or other business shall endeavour to improve continually its further implementation of these Norms.

 

16. Transnational corporations and other business enterprises shall be subject to periodic monitoring and verification by United Nations, other international and national mechanisms already in existence or yet to be created, regarding application of the Norms. This monitoring shall be transparent and independent and take into account input from stakeholders (including non-governmental organizations) and as a result of complaints of violations of these Norms. Further, transnational corporations and other business enterprises shall conduct periodic evaluations concerning the impact of their own activities on human rights under these Norms.

 

Commentary

 

(a) These Norms shall be monitored and implemented through amplification and interpretation of intergovernmental, regional, national and local standards with regard to the conduct of transnational corporations and other business enterprises.

 

(b) United Nations human rights treaty bodies should monitor implementation of these Norms through the creation of additional reporting requirements for States and the adoption of general comments and recommendations interpreting treaty obligations. The United Nations and its specialized agencies should also monitor implementation by using the Norms as the basis for procurement determinations concerning products and services to be purchased and with which transnational corporations and other business enterprises develop partnerships in the field. Country rapporteurs and thematic procedures of the United Nations, Commission on Human Rights should monitor implementation by using the Norms and other relevant international standards for raising concerns about actions by transnational corporations and other business enterprises within their respective mandates. The Commission on Human Rights should consider establishing a group of experts, a special rapporteur, or working group of the Commission to receive information and take effective action when enterprises fail to comply with the Norms. The Sub-Commission on the Promotion and Protection of Human Rights and its relevant working group should also monitor compliance with the Norms and developing best practices by receiving information from non-governmental organizations, unions, individuals and others, and then by allowing transnational corporations or other business enterprises an opportunity to respond. Further, the Sub-Commission, its working group and other United Nations bodies are invited to develop additional techniques for implementing and monitoring these Norms and other effective mechanisms and to ensure access is given to NGOs, unions, individuals and others.

 

(c) Trade unions are encouraged to use the Norms as a basis for negotiating agreements with transnational corporations and other business enterprises and monitoring compliance of these entities. NGOs are also encouraged to use the Norms as the basis for their expectations of the conduct of the transnational corporation or other business enterprise and monitoring compliance. Further, monitoring could take place by using the Norms as the basis for benchmarks of ethical investment initiatives and for other benchmarks of compliance. The Norms shall also be monitored through industry groups.

 

(d) Transnational corporations and other business enterprises shall ensure that the monitoring process is transparent, for example by making available to relevant stakeholders the workplaces observed, remediation efforts undertaken and other results of monitoring. They shall further ensure that any monitoring seeks to obtain and incorporate input from relevant stakeholders. Further, they shall ensure such monitoring by their contractors, subcontractors, suppliers, licensees, distributors, and any other natural or legal persons with whom they have entered into any agreement, to the extent possible.

 

(e) Transnational corporations and other business enterprises shall provide legitimate and confidential avenues through which workers can file complaints with regard to violations of these Norms. To the extent possible, they shall make known to the complainant any actions taken as a result of the investigation. Further, they shall not discipline or take other action against workers or others who submit complaints or who assert that any company has failed to comply with these Norms.

(f) Transnational corporations and other business enterprises receiving claims of violations of these Norms shall make a record of each claim and obtain an independent investigation of the claim or call upon other proper authorities. They shall actively monitor the status of investigations, press for their full resolution and take action to prevent recurrences.

 

(g) Each transnational corporation or other business enterprise shall engage in an annual or other periodic assessment of its compliance with the Norms, taking into account comments from and encourage the participation of indigenous peoples and communities to determine how best to respect their rights. The results of the assessment shall be made available to stakeholders to the same extent as the annual report of the transnational corporation or other business enterprise.

 

(h) Assessments revealing inadequate compliance with the Norms shall also include plans of action or methods of reparation and redress that the transnational corporation or other business enterprise will pursue in order to fulfill the Norms. See also paragraph 18.

 

(i) Before a transnational corporation or other business enterprise pursues a major initiative or project, it shall, to the extent of its resources and capabilities, study the human rights impact of that project in the light of these Norms. The impact statement shall include a description of the action, its need, anticipated benefits, an analysis of any human rights impact related to the action, an analysis of reasonable alternatives to the action, and identification of ways to reduce any negative human rights consequences. A transnational corporation or other business enterprise shall make available the results of that study to relevant stakeholders and shall consider any reactions from stakeholders.

 

17. States should establish and reinforce the necessary legal and administrative framework for ensuring that the Norms and other relevant national and international laws are implemented by transnational corporations and other business enterprises.

 

Commentary

 

(a) Governments should implement and monitor the use of the Norms, for example, by making them widely available and using them as a model for legislation or administrative provisions with regard to the activities of each enterprise doing business in their country, including through the use of labour inspections, ombudspersons, national human rights commissions, or other national human rights mechanisms.

 

18. Transnational corporations and other business enterprises shall provide prompt, effective and adequate reparation to those persons, entities and communities that have been adversely affected by failures to comply with these Norms through, inter alia, reparations, restitution, compensation and rehabilitation for any damage done or property taken. In connection with determining damages, in regard to criminal sanctions, and in all other respects, these Norms shall be applied by national courts and/or international tribunals, pursuant to national and international law.

 

19. Nothing in these Norms shall be construed as diminishing, restricting, or adversely affecting the human rights obligations of States under national and international law, nor shall they be construed as diminishing, restricting, or adversely affecting more protective human rights norms, nor shall they be construed as diminishing, restricting, or adversely affecting other obligations or responsibilities of transnational corporations and other business enterprises in fields other than human rights.

 

Commentary

 

(a) This savings clause is intended to ensure that transnational corporations and other business enterprises will pursue the course of conduct that is the most protective of human rights - whether found in these Norms or in other relevant sources. If more protective standards are recognized or emerge in international or State law or in industry or business practices, those more protective standards shall be pursued. This savings clause is styled after similar savings clauses found in such instruments as the Convention on the Rights of the Child (art. 41). This provision and similar references in the Norms to national and international law are also based upon the Vienna Convention on the Law of Treaties (art. 27), in that a State may not invoke the provisions of its internal law as justification for its failure to comply with a treaty, the Norms, or other international law norms.

 

(b) Transnational corporations and other business enterprises are encouraged to express their own commitment to respecting, ensuring respect for, preventing abuses of, and promoting internationally recognized human rights by adopting their own internal human rights rules of operation which are even more conducive to the promotion and protection of human rights than those contained in these Norms.

 

I. Definitions

 

20. The term “transnational corporation” refers to an economic entity operating in more than one country or a cluster of economic entities operating in two or more countries - whatever their legal form, whether in their home country or country of activity, and whether taken individually or collectively.

 

21. The phrase “other business enterprise” includes any business entity, regardless of the international or domestic nature of its activities, including a transnational corporation, contractor, subcontractor, supplier, licensee or distributor; the corporate, partnership, or other legal form used to establish the business entity; and the nature of the ownership of the entity. These Norms shall be presumed to apply, as a matter of practice, if the business enterprise has any relation with a transnational corporation, the impact of its activities is not entirely local, or the activities involve violations of the right to security as indicated in paragraphs 3 and 4.

 

22. The term “stakeholder” includes stockholders, other owners, workers and their representatives, as well as any other individual or group that is affected by the activities of transnational corporations or other business enterprises. The term “stakeholder” shall be interpreted functionally in the light of the objectives of these Norms and include indirect stakeholders when their interests are or will be substantially affected by the activities of the transnational corporation or business enterprise. In addition to parties directly affected by the activities of business enterprises, stakeholders can include parties which are indirectly affected by the activities of transnational corporations and other business enterprises such as consumer groups, customers, Governments, neighbouring communities, indigenous peoples and communities, non-governmental organizations, public and private lending institutions, suppliers, trade associations and others.

 

23. The phrases “human rights” and “international human rights” include civil, cultural, economic, political and social rights, as set forth in the International Bill of Human Rights and other human rights treaties, as well as the right to development and rights recognized by international humanitarian law, international refugee law, international labour law, and other relevant instruments adopted within the United Nations system.

* * * * * * * * *

D. ARTICLE ABOUT THE HUMAN RIGHTS NORMS

 

Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, 97 Am. J. Int’l L. 901 (2003)

 

David Weissbrodt * and Muria Kruger **

On August 13, 2003, the UN Sub-Commission on the Promotion and Protection of Human Rights approved the "Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights" ( "Norms") 1 in its resolution 2003/16 2003. 2 The Norms represent a landmark step in holding businesses accountable for their human rights abuses and provide a succinct, but comprehensive restatement of the international legal principles applicable to businesses with regard to human rights, humanitarian law, international labor law, environmental law, consumer law, anti-corruption law, etc.

 

Throughout the past half century governments have increasingly codified international human rights law protecting the rights of individuals against governmental violations. With increasing attention to the emergence of international criminal law as a response to war crimes, genocide, and other crimes against humanity, there has also been growing attention to individual responsibility for grave human rights abuses. This increasing web of human rights obligations, however, failed to pay sufficient attention to some of the most powerful non-state actors in the world, that is, transnational corporations and other business enterprises. With power should come responsibility, 3 and international human rights law needs to focus adequately on these extremely potent international non-state actors.

 

Transnational corporations have been of particular concern in relation to recent global trends because they are active in some of the most dynamic sectors of national economies, such as extractive industries, telecommunications, information technology, electronic consumer goods, footwear and apparel, transport, banking and finance, insurance, and securities trading. They bring new jobs, capital, and technology. Some corporations make real efforts to achieve international standards by improving working conditions and raising local living conditions. They certainly have the capacity to exert a positive influence in fostering development.

 

Some transnational corporations, however, do not respect minimum international human rights standards and can thus be implicated in abuses such as employing child laborers, discriminating against certain groups of employees, failing to provide safe and healthy working conditions, attempting to repress independent trade unions, discouraging the right to bargain collectively, limiting the broad dissemination of appropriate technology and intellectual property, and dumping toxic wastes. Some of these abuses disproportionately affect developing countries, children, minorities, and women who work in unsafe and poorly paid production jobs, as well as indigenous communities and other vulnerable groups.

 

There is also increasing reason to believe that greater respect for human rights by companies leads to greater sustainability in emerging markets 4 and better business performance. 5 For example, observance of human rights aids businesses by protecting and maintaining their corporate reputation, and creating a stable and peaceful society in which businesses can prosper and attract the best and brightest employees. 6 Consumers have also demonstrated that they are willing to pay attention to standards and practices used by a business regarding human rights and may even boycott products that are produced in violation of human rights standards. 7 There is also evidence that a growing proportion of investors seek to purchase shares in socially responsible companies. 8 All-in-all, business enterprises have increased their power in the world. 9 International, national, state, and local law-makers are realizing that this power must be addressed, and that there is a special need to address the human rights obligations of business enterprises.

 

Prior to the Sub-Commissions action in August 2003, several other prominent international bodies addressed these issues in either unsuccessful or voluntary initiatives. For example, the United Nations unsuccessfully attempted to draft an international Code of Conduct for businesses in the 1970s and 80s. 10 The Organization for Economic Co-operation and Development (OECD) undertook a similar effort in 1976 when it established its first Guidelines for Multinational Enterprises to promote responsible business conduct consistent with applicable laws. 11 In 1977, the International Labor Organization (ILO) adopted its Tripartite Declaration of Principles concerning Multinational Enterprises 1 2 which calls upon businesses to follow the relevant ILO conventions and recommendations. Further, in January 1999, United Nations Secretary-General Kofi Annan proposed a Global Compact of shared values and principles at the Davos Conference. 13 The Global Compact asks businesses voluntarily to support and adopt nine core principles that are divided into categories dealing with general human rights obligations, standards of labor, and standards of environmental protection. 1 4 These initiatives, however, failed to bind all businesses to follow minimum human rights standards.

 

The Norms are the first non-voluntary initiative accepted at the international level. Accordingly, the Norms have already attracted the attention of many scholars and others who are working in the field of corporate social responsibility. The Norms have also for this reason been welcomed by many nongovernmental organizations (NGOs) and others who would like to use the Norms to begin holding large businesses accountable for their human rights violations. This Current Development article briefly traces the efforts of the Sub-Commissions Working Group on the Working Methods and Activities of Transnational Corporations leading to the adoption of the Norms. This article also discusses several of the main issues resolved in preparing the Norms, and current and future approaches for implementing the Norms.

DRAFTING HISTORY OF THE NORMS

 

The idea for a sessional Working Group on the Working Methods and Activities of Transnational Corporations arose from Sub-Commission resolution 1997/11, 15 which asked El-Hadji Guissé to present a working document to the Sub-Commission at its fiftieth session (in 1998) on the issue of human rights and transnational corporations. 16 In response to this paper, in its resolution 1998/8 of August 20, 1998, the Sub-Commission decided A to establish for a three-year period a sessional working group of the Sub-Commission, composed of five of its members, taking into account the principle of equitable geographic distribution, to examine the working methods and activities of transnational corporations. 17 The mandate of the sessional Working Group included tasks such as: identifying issues; examining information regarding the effects of transnational corporations on human rights; examining investment agreements for their compatibility with human rights agreements; making recommendations regarding the methods of work and activities of transnational corporations in order to ensure the protection of human rights; and considering the scope of the States obligation to regulate transnational corporations. 18

 

In 1999, the Working Group set its agenda for the next two years. The 1999 meeting ended by asking David Weissbrodt to prepare a draft code of conduct for transnational corporations. 19 At its second meeting in August 2000, the Working Group considered the first "Draft Code of Conduct for Companies", 20 and further recognized the necessity of addressing issues such as implementation in conjunction with the substantive standards. The Working Groups August 2000 session ended by asking for further comments and input in regard to the draft standards so that they could be revised and updated for another year.

 

Accordingly, members of the Working Group organized a seminar in March 2001 at the Office of the UN High Commissioner for Human Rights. The participants included members of the Working Group; representatives from nongovernmental organizations interested in corporate responsibility, human rights, development, and the environment; representatives from companies and unions; and several scholars. 21 Individuals at the conference suggested many substantive formatting changes for the Norms, such as adding a preamble, radically shortening the main text into broad provisions, and adding a commentary following each principle to address more specific issues. 22 Then, at its third meeting in August 2001, the Working Group considered a second draft of the document revised in light of the comments received throughout the year, including those suggestions made at the March 2001 seminar. 23

 

Since the Working Group had not completed its tasks pursuant to its three-year mandate, the Sub-Commission decided in August 2001 to extend the Groups mandate for another three years. The renewed mandate, while substantially similar to the old mandate, clarified the authority of the Working Group to draft relevant norms and included new activities such as: compiling a list of relevant instruments and norms concerning human rights with regard to transnational corporations; contributing to the drafting of relevant norms concerning human rights and transnational corporations and other economic units whose activities have an impact on human rights; and analyzing and drafting norms for the establishment of a monitoring mechanism in order to apply sanctions to transnational corporations when appropriate. 24

 

Pursuant to the renewed mandate, the Working Group continued to draft the Norms. At an informal meeting in February 2002, the five members of the Working Group 25 created a further revised version of the Norms for consideration at its session during the fifty-fourth session of the Sub-Commission in July/August 2002. The new draft consisted of eighteen fundamental human rights principles with regard to the activities of transnational corporations and other business enterprises, including provisions on implementation, and a section on definitions. For the first time, the Norms and Commentary were submitted as separate documents at the fifty-fourth session of the Sub-Commission in July/August 2002. 26

 

By the end of the Working Groups meetings at the fifty-fifth session of the Sub-Commission in 2002, a revised version of the Norms (taking into account comments made at the Working Group meetings) was attached to the 2002 Working Group Report with the aim of promoting even greater dissemination of the document. 27 Resolution 2002/8 of the Sub-Commission asked that the Norms and Commentary be disseminated as widely as possible, so as to encourage governments, intergovernmental organizations, nongovernmental organizations, transnational corporations, other business enterprises, unions, and other interested parties to provide any suggestions, observations, or recommendations. 28 The Norms were also attached in the expectation that the Working Group would adopt the Norms in 2003 and send them to the Sub-Commission and eventually to the Commission for adoption.

 

In March 2003, several NGOs organized a seminar in which they provided the Working Group members with detailed comments on the Norms. During that seminar, the Working Group received and responded to each issue raised by the NGOs in attendance. Immediately following the seminar in private session, the Working Group considered all comments received from the seminar and pursuant to the dissemination requested in resolution 2002/8. The Working Group then agreed upon a draft of the Norms to present at their meetings during the fifty-fifth session of the Sub-Commission in July/August 2003. 29

 

During its meetings at the fifty-fifth session of the Sub-Commission, the Working Group resolved the key issue of the status of the Commentary to the Norms. It decided that the preamble to both the Norms and Commentary should refer to the Commentary as a "useful interpretation and elaboration of the standards contained in the Norms". 30 Then, after taking into consideration all suggestions received at its public meetings in 2003, the Working Group adopted a revised version of both the Norms and Commentary and forwarded the Norms to the Sub-Commission for approval. 31

 

After consideration of the Norms, the Sub-Commission approved the Norms in its resolution 2003/16 of 14 August 2003. 32 Resolution 2003/16 also transmitted the Norms to the Commission on Human Rights for their eventual consideration, and asked the Commission to invite Governments, United Nations bodes, specialized agencies, non-governmental organizations, and other interested parties to provide comments on the Norms for the Commissions session in March-April 2005. 33 In addition to transmission to the Commission, resolution 2003/16 creates an initial procedure for implementation of the Norms. The resolution requests the Working Group to receive information from Governments, non-governmental organizations, business enterprises, individuals, groups of individuals, and other sources on the negative impacts of businesses and particularly information on the implementation of the Norms. The Working Group is then to invite the business concerned to provide responses to the information received, and to transmit its comments and recommendations to the relevant business, government, or non-governmental organization. 34 It also asks the Working Group to continue discussions exploring further possible procedures for implementation such as the other mechanisms identified in general terms in the Norms and Commentary. 35

 

At both the Working Group and Sub-Commission meetings in 2003, many NGOs and others provided public statements in support of the Norms, including Amnesty International; Christian Aid; Human Rights Advocates; Human Rights Watch; Lawyers Committee for Human Rights; Federation Internationale des Ligues des Droits de l Homme (FIDH); Forum Menschenrechte (Human Rights Forum); Oxfam; Prince of Wales International Business Leaders Forum; World Economy, Ecology & Development (WEED); and the World Organization Against Torture (OMCT). Additionally, Amnesty International provided a list of fifty-eight non-governmental organizations confirming their support for the Norms, and Forum Menschenrechte provided a list of twenty-six non-governmental organizations joining their statement in support of the Norms.

Immediately upon adoption, many of these same NGOs listed above issued a press release welcoming the Sub-Commission`s approval of these Norms. 36 Additionally, a few NGOs have already indicated their intent to begin using the Norms as standards for reporting on the human rights activities of businesses. 37 Further, several transnational businesses have agreed to "road-test the Norms" as part of their commitment to human rights. 38

 

The adoption of the Norms is clearly a milestone for both the Working Group, Sub-Commission, and many others working in the area of corporate social responsibility. The Norms and Commentary, however, still require further efforts in the area of implementation and enforcement, and the Working Group and others will continue to address these issues in the future.

As for the future of the Norms and Commentary in the UN system, the Sub-Commission in adopting the Norms and transmitting the Norms to the Commission on Human Rights suggested that the Commission at its sixtieth session in March-April 2004 invite Governments, United Nations bodies, specialized agencies, non-governmental organizations and other interested parties to submit comments on the Norms to the Commission at its sixty-first session in 2005. Much education on the Norms and Commentary for businesses, unions, and governments remains to be done, however, before it is likely the Commission will begin seriously considering, or adopting the Norms and Commentary. Meanwhile, the Norms have already begun to enter into business practices and to be accepted as the most comprehensive definition of corporate social responsibilities.

 

III. ISSUES RAISED IN PREPARING HUMAN RIGHTS NORMS FOR BUSINESSES

 

Several issues arose during the drafting process of the Norms: (1) how to define transnational corporations; (2) whether to include domestic enterprises and if so, how to distinguish between domestic and international businesses; (3) how to distinguish between larger and smaller businesses, so as to avoid a "one-size fits all" approach; (4) what human rights concepts should be included in the Norms; and (5) the legal status of the Norms after adopted by the Sub-Commission. 39

 

Defining transnational corporations .

 

When the Working Group met in both 2000 and 2001, it discussed at some length whether the Norms should apply only to transnational corporations or to all businesses. Additionally at the 2002 Sub-Commission meeting, some NGOs expressed strong views that the original mandate only mentioned transnational corporations and the Working Group should focus only on these businesses. Members and observers at these meetings who wanted the Norms to apply only to transnational corporations suggested several possible definitions of transnational corporations. Before making its decision, the Working Group requested an account of different definitions used to define "transnational corporations" and how other organizations addressed this issue in their codes of conduct and similar documents. Preliminary research indicated that drafting an adequate definition would be difficult. 40

 

Generally, the phrase " transnational corporation" refers to a corporation with affiliated business operations in more than one country. 41 A more specific definition deems an enterprise a transnational corporation if "it has a certain minimum size, if it controls production or service plants outside its home state and if it incorporates these plants into a unified corporations strategy". 42 Yet another definition defines a transnational corporation as "a cluster of corporations of diverse nationality joined together by a common ownership and responsive to a common management strategy.” 4 3

 

Another term commonly used to describe businesses which operate in more than one country is A multinational enterprises @ (MNEs). One author, in distinguishing between a MNE and a transnational corporation, defines a MNE as an entity that is composed of free-standing units replicated in different countries and a transnational corporation as consisting of vertically integrated units which turn out goods and services in more than one country. 44 Additionally, the term "enterprise" is generally viewed as more inclusive than the term "corporation", as "corporation" generally refers only to businesses that possess a legal charter and state recognition and excludes unincorporated entities, such as partnerships and joint enterprises. 45

 

The ILO s Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy defines a multinational enterprise to include "enterprises, whether they are of public, mixed or private ownership, which own or control production, distribution, services or other facilities outside of the country in which they are based". The Declaration further states that " . . . this Declaration does not require a precise legal definition of multinational enterprises; [but the foregoing definition] is designed to facilitate the understanding of the Declaration and not to provide such a definition". 46 The OECD similarly defines multinational enterprises in its Guidelines for Multinational Enterprises: These [multinational enterprises] usually comprise companies or other entities established in more than one country and so linked that they may co-ordinate their operations in various ways. . . . Ownership may be private, state or mixed.

 

The UN Code of Conduct for Transnational Corporations defined a transnational corporation as:

an enterprise, whether of public, private or mixed ownership, comprising entities in two or more countries, regardless of the legal form and fields of activity of these entities, which operates under a system of decision-making, permitting coherent policies and a common strategy through one or more decision-making centers, in which the entities are so linked, by ownership or otherwise, that one or more of them may be able to exercise a significant influence over the activities of others, and, in particular, to share knowledge, resources and responsibilities with others. 47

 

The main concern of drafting the Norms so as to apply only to transnational corporations is that an inadequate definition of "transnational corporation" or "multinational enterprise" would allow businesses to use financial and other structures to conceal their transnational nature, thus avoiding responsibility as a transnational corporation under the Norms. The Norms specifically define a "transnational corporation" as an economic entity operating in more than one country or a cluster of economic entities operating in two or more countries whatever their legal form, whether in their home country or country of activity, and whether taken individually or collectively. 48 The Norms, however, do not limit their application to transnational corporations, but also include other business enterprises. The Working Group has defined the phrase "other business enterprise" as "any business entity, regardless of the international or domestic nature of its activities, including a transnational corporation, contractor, subcontractor, supplier, licensee, or distributor; the corporate, partnership, or other legal form used to establish the business entity; and the nature of the ownership of the entity". 49

 

Hence, even though the Norms define transnational corporations and focus some attention on transnationals, they are written to include all business entities, 50 regardless of the corporate form used by the entity or the international or domestic scope of its business. Hence, the definition in the Norms is less critical and not restrictive in terms of the Norms scope of application.

 

Distinguishing between domestic and international businesses.

 

Another major issue in connection with the definition of transnational corporations was whether the Norms should apply only to transnational corporations or whether it should apply to both domestic and international business entities. "Transnational corporations", however defined, generally receive special attention because they tend to be large, possess considerable political influence, and have autonomy to the extent that they have the capacity to move their operations from one country to another. But there are many other businesses whose activities are related to international commerce, for example, through export or import, even if they lack foreign subsidiaries. Other businesses that operate locally are linked to international commerce and to transnational corporations through supply chains. Further, the most influential businesses may be principally active in local or national markets, but may have a very significant impact on the enjoyment of human rights.

 

To address this issue, the UN Code of Conduct for Transnational Corporations stated that the code was not intended to introduce differences between domestic and international enterprises but that "wherever the provisions are relevant to both, transnational corporations and domestic enterprises should be subject to the same expectations in regard to their conduct". 51 The ILOs Tripartite Declaration contains a similar statement. "The principles laid down in this Declaration do not aim at introducing or maintaining inequalities of treatment between multinational and national enterprises. They reflect good practice for all. Multinational and national enterprises, wherever the principles of this Declaration are relevant to both, should be subject to the same expectations in respect of their conduct in general and their social practices in particular". 52 The OECD Guidelines handle this issue by defining transnational corporations, but then stating that "the Guidelines are not aimed at introducing differences between multinational and domestic enterprises; they reflect good practice for all. Accordingly, multinational and domestic enterprises are subject to the same expectations in respect of their conduct wherever the Guidelines are relevant to both". 53 The OECD Guidelines further state that "while it is acknowledged that small- and medium-sized enterprises may not have the same capabilities as larger enterprises, governments adhering to the Guidelines nevertheless encourage them to observe the Guidelines recommendations to the fullest extent possible". 54

 

A basic principle of the Norms is that they should be respected by all businesses. Since all businesses are essentially competitors in the global market, making distinctions between which standards should apply to transnational corporations and which should apply to smaller domestic firms may prove difficult. 55 Additionally, it may be difficult to determine the wholly national or international status of corporations and other business forms which have diverse control structures and forms of ownership, such as non-equity contractual relations (e.g., joint ventures, buyers/suppliers), partnerships, limited liability partnerships, limited liability companies, and unincorporated associations. Further, if only transnational corporations are required to respect certain human rights obligations, they could potentially face unfair competition that might undermine incentives for compliance if the competition they face from large national competitors is not required to respect similar standards.

 

Even upon consideration of these arguments for the broad application of the Norms to all business enterprises, the Working Group decided in August 2002 that it wanted to diminish the impact of the Norms upon such local businesses as corner bakeries, dry cleaners, or other small, and "mom and pop" type businesses. The Norms still apply to such small businesses, but implementation focuses on transnational corporations, larger businesses, and any business with connections to transnational corporations. 56 With this focus of implementation, the Working Group intends the Norms to apply broadly to all businesses regardless of their national or international status.

 

Also in close connection with this issue was the debate over how to handle contractors, subcontractors, suppliers, licensees, and other business partners of transnational corporations. How far up or down the supply line companies should businesses expected to monitor the compliance of their sub-contractors and suppliers? Some worry that requiring companies to sever all relationships with companies that do not meet the standards of the Norms will disproportionately affect businesses in developing countries. 57 Further, they argue that businesses not currently in compliance with the Norms should be encouraged to come into compliance through business relations.

 

While the ILO Tripartite Declaration does not mention relationships with contractors and suppliers, the OECD Guidelines handle this issue by calling on enterprises to "encourage business partners, in particular suppliers and sub-contractors, to apply principles of corporate conduct compatible" with the OECD Guidelines where appropriate. 58

 

The Norms address the issue of suppliers and contractors by stating:

"Each transnational corporations or other business enterprises shall apply and incorporate these Norms in their contracts or other arrangements and dealings with contractors, subcontractors, suppliers, licensees, distributors, or natural or other legal persons who enter into any agreement with the transnational corporation or other business enterprises in order to ensure respect for and implementation of the Norms". 59

Additionally, in the Commentary to the Norms, it states:

 

Transnational corporations and other business enterprises shall assure that they only do business with (including purchasing from and selling to) contractors, subcontractors, suppliers, licensees, distributors, and natural or other legal persons that follow these or substantially similar Norms. Transnational corporations and other business enterprises using or considering entering into business relationships with contractors, subcontractors, suppliers, licensees, distributors, or natural or other legal persons that do not comply with the Norms shall initially work with them to reform or decrease these violations, but if they will not change, the business shall cease doing business with them. 60

In addition to these provisions, the broad application of the Norms to all businesses also resolves this problem. All businesses B regardless of size or relationship to the supply chain B are required to follow the same standards and therefore all business partners must comply on their own accord.

 

Distinguishing between larger and smaller corporations .

 

* Fredrikson & Byron Professor of Law, University of Minnesota; Member, UN Sub-Commission on the Promotion and Protection of Human Rights.

** J.D. 2001, magna cum laude, University of Minnesota Law School.

8 2003 David Weissbrodt and Muria Kruger

1See Sub-Commission on the Promotion and Protection of Human Rights, Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights, UN Doc. E/CN.4/Sub.2/2003/12/Rev.2 (2003) [hereinafter Norms].

2 See Sub-Commission, Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights, Sub‑Commission resolution 2003/16, UN Doc. E/CN.4/Sub.2/2003/L.11 at 52 (2003) [hereinafter Resolution 2003/16], see UN Doc. E/CN.4/Sub.2/2003/RES/16 (2003).

3 Mary Robinson, Address at the Second Global Ethic Lecture at the University of Tübingen, Germany (January 21, 2002), reprinted in, Globalization has to take human rights into account, Irish Times, Jan. 22, 2002 (Mary Robinson was the High Commissioner for Human Rights at that time).

4 A large-scale study of evidence from developing countries found that emerging market companies gain financially from stability. See International Finance Corporation, Sustainability, Instituto Ethos, Groundbreaking Report Challenges Conventional Wisdom on Role of Business in Emerging Markets, Press Release No. 02/0098, July 17, 2002.

5 See Roger Cowe, ABI Research Reports, Investing in Social Responsibility: Risks and Opportunities (2001) (supporting the proposition that corporate social responsibility has a positive impact on businesses by increasing their potential for competitive advantage and increasing shareholder value through promotion of risk management). See also, Daniel Farber, Rights as Signals, 31 J. Legal Studies 83, 98 (2002) (human rights protection properly encourages investment).

6See Christopher Avery, Amnesty International, Business and Human Rights in a time of change (Feb. 2000), at <http://www.business-humanrights.org/Avery-Report.htm> . See also United Nations High Commissioner for Human Rights, Business and Human Rights, <http://www.unhchr.ch/global.htm> (visited Sept. 2, 2003).

7 For example, consumer discontent that soccer/footballs were made by child labor led to a consumer boycott forcing the manufacturers to stop using child labor. See Robert J. Liubicic, Corporate Codes of Conduct and Product Labeling Schemes: The Limits and Possibilities of Promoting International Labor Rights Standards Through Private Initiatives, 30 Law and Poly Intl Bus 111 (1998). Another example occurred in regard to the promotion of infant formula in developing countries. Certain companies were encouraging mothers in developing countries to use infant formula instead of breast-milk feeding. The use of infant formula led to increased infant mortality because of lack of clean water and because mothers were not properly instructed on how to use the formula. Once consumers learned about the increased infant mortality, they began boycotting Nestlé products. See Nancy E. Zelman, The Nestlé Infant Formula Controversy: Restricting the Marketing Practice of Multinational Corporations in the Third World, 3 Transnatl L . 697 (1990).

8 The ethical market share in the United Kingdom has grown 15% from 1999 to 2000. See Deborah Doane, New Economics Foundation, Taking Flight: The Rapid Growth of Ethical Consumerism (Oct. 2001), at <http://www.neweconomics.org/default.asp?strRequest=pubs&strContext=pubdetails&intPubID=88>. A study in the United States found that one out of every eight professionally managed investment dollars is used in socially responsible investing. See Social Investment Forum, 2001 Report of Socially Responsible Investing Trends in the United States (Nov. 28, 2001), at <http://www.socialinvest.org/areas/research/trends/2001-Trends.htm>. FTSE4Good, an independent global indexing company, announced that companies in its Global Resources Sector will have to meet higher human rights criteria starting in September 2003. See FTSE4Good, FTSE4Good News and Views, FTSE4Good Index Series raises the hurdle on human rights, at <http://www.ftse.com/about_ftse/newsandviews/humanrights.jsp> (visited Sept. 2, 2003). "The tougher criteria were developed using a broad public human rights consultation carried out during 2002". Id.

9 A 1999 study found that 51 of the 100 largest economies in the world are corporations, while only 49 are countries and the combined sales of the world = s top 200 corporations are greater than a quarter of the world = s economic activity. See Sarah Anderson and John Cavanagh, The Top 200: The Rise of Global Corporate Power (1999), at <http://www.ips-dc.org/reports/top200text.htm>.

10 See Development and International Economic Cooperation: Transnational Corporations, UN Doc. E/1990/94 (1990). See also United Nations Draft International Code of Conducton Transnational Corporations, 23 ILM 626 (1984).

11 Organization for Economic Co-operation and Development, Guidelines for Multinational Enterprises, 15 ILM 967 (1976). The OECD updated these Guidelines in 2000. OECD Guidelines for Multinational Enterprises, Revision 2000, at <http://www.oecd.org/pdf/M000015000/M00015419.pdf> (visited Sept. 2, 2003).

12 International Labor Organization, Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, 17 ILM 422, para. 6 (1978), available at <http://www.ilo.org/public/english/employment/multi/tridecl/index.htm>. The Tripartite Declaration is voluntary. Id. at & 2 ("The aim of this Tripartite Declaration of Principles is to encourage the positive contribution which multinational enterprises can make . . . " ).

13 Secretary-General Kofi Annan, Address at the World Economic Forum in Davos, Switzerland (Jan. 31, 1999), in UN Doc. SG/SM/6448 (1999). Prior to adoption of the Norms, the staff of the Global Compact issued a statement of July 24, 2003, in support of the Norms, indicating "From the perspective of the Global Compact, we always welcome efforts that help to clarify complex human rights questions and that foster practical changes that advance understanding and good practices. It is my understanding that the Draft Norms have already initiated significant educational efforts and we are looking forward to seeing how these efforts could contribute positively to the Global Compact". E-mail message from Georg Kell (July 24, 2003) (on file with the author). That statement responded to a letter from the four major NGO participants in the Global Compact who wrote their partners in the Global Compact stating their concern that companies are being allowed to sign onto the Global Compact without having to follow through with reporting obligations. See Letter from Jeremy Hobbs, Oxfam International; Irene Kahn, Amnesty International; Michael Posner, Lawyers Committee for Human Rights; and Kenneth Roth, Human Rights Watch, to Louise Frechette, Deputy Secretary-General of the United Nations (April 7, 2003) (on file with the author). Id.; see also GRI Chief Executive Responds to Release of the UN Sub-Commission on the Promotion and Protection of Human Rights Norms for Transnationals (August 13, 2003) (on file with author) (stating that "The Global Reporting Initiative (GRI) has welcomed the work of the [Sub-Commission], which it sees as a further step in catalyzing and focusing discussion on how human rights can be advanced around the world in measurable, concrete and practical ways".).

14 The principles are that businesses should: (1) support and respect the protection of internationally proclaimed human rights within their sphere of influence; (2) make sure they are not complicit in human right abuses; (3) uphold the freedom of association and the effective recognition of the right to collective bargaining; (4) eliminate all forms of forced and compulsory labor; (5) abolish child labor; (6) eliminate discrimination in respect of employment and occupation; (7) support a precautionary approach to environmental challenges; (8) undertake initiatives to promote greater environmental responsibility; and (9) encourage the development and diffusion of environmentally friendly technologies. The Global Compact, at <http://www.unhchr.ch/global.htm> (visited Sept. 2, 2003).

15 See Sub-Commission, Report of the Sub-Commission on Prevention of Discrimination and Protection of Minorities on its Forty-Ninth Session, 1997/11, UN Doc.E/CN.4/1998/2, E/CN.4/Sub.2/1997/50 (1997).

16See Sub-Commission, Working document on the impact of the activities of transnational corporations on the realization of economic, social and cultural rights, UN Doc E/CN.4/Sub.2/1998/6 (1998).

17 Sub-Commission, The relationship between the enjoyment of economic, social and cultural rights and the right to development, and the working methods and activities of transnational corporations, UN Doc. E/CN.4/Sub.2/RES/1998/8 (1998).

18See id.

19 See Sub-Commission, Report of the sessional working group on the working methods and activities of transnational corporations on its first session, UN Doc. E/CN.4/Sub.2/1999/9 (1999). See generally David Weissbrodt & Muria Kruger, Business and Human Rights, Human Rights and Criminal Justice for the Downtrodden: Essays in Honour of Asbjørn Eide (Morten Bergsmo ed., 2003).

20 See Sub-Commission, Report on the sessional working group on the working methods and activities of transnational corporations on its second session, UN Doc. E/CN.4/Sub. 2/2000/12, para. 26-58 (2000). For drafts of the documents considered by the Working Group in 2000, see Sub-Commission, Principles Relating to the Human Rights Conduct of Companies, UN Doc. E/CN.4/Sub.2/2000/WG.2/WP.1 (2000); Sub-Commission, Proposed Draft Human Rights Code of Conduct for Companies: Addendum, UN Doc. E/CN.4/Sub.2/2000/WG.2/WP.1/Add.1 (2000); and Sub-Commission, Proposed Draft Human Rights Code of Conduct for Companies: Addendum, List of Principal Source Materials for the Draft Code of Conduct for Companies, UN Doc. E/CN.4/Sub.2/2000/WG.2/WP.1/Add.2 (2000). The Working Group has changed the title of this document many times in the drafting process. The first draft to be considered by the Working Group was called the "Draft Code of Conduct for Companies". See UN Doc. E/CN.4/Sub.2/2000/WG.2/WP.1/Add.1 (2000). Upon consideration of this name, those in attendance at the 2000 Sub-Commission meeting felt that the term "code of conduct" was overused and might be misleading as many voluntary codes also referred to themselves as "codes of conduct". See UN Doc. E/CN.4/Sub.2/2000/WG.1/WP.1 at & 27. The title of the second draft was the "Draft Universal Human Rights Guidelines for Companies". See Sub-Commission, Draft Universal Human Rights Guidelines for Companies, UN Doc. E/CN.4/Sub.2/2001/WG.1/WP.1/Add.1 (2001). The term "universal" was added pursuant to suggestions by those in attendance at a March 2001 seminar of experts in this field convened to gather input on the Guidelines. See generally, Sub-Commission, Draft Universal Human Right Guidelines for Companies: Addendum 3, Report of the Seminar to Discuss UN Human Rights Guidelines for Companies, UN Doc. E/CN.4/Sub.2/2001/WG.1/WP.1/Add.3 (2001), available at <http://www1.umn.edu/humanrts/links/draftguidelines-ad3.html>

[hereinafter Seminar Report]. Upon consideration of this name at the 2001 Sub-Commission meeting, those in attendance felt that the term "guidelines" was not indicative of the nature of the obligations the draft was meant to convey, so the word "principles" was considered preferable. Further, it was mentioned that the word "companies" was not inclusive of all business forms and the word "business enterprises" may be more inclusive. Also, since the Working Groups mandate included a special focus on transnational corporations, those at the Sub-Commission felt that the document title should also include the word "transnational corporations" in the title. The suggested title at that time was "Draft Universal Human Rights Principles for Transnational Corporations and Other Business Enterprises". At its February 2002 meeting, the Working Group decided also to include the word "responsibilities" to reflect the nature of the obligations the document attempts to create. The Working Group later excluded references to "universal" or potentially "fundamental" as the name of the document was becoming quite long. The name of the third draft considered at the 2002 Sub-Commission meeting therefore was the " Human Rights Principles and Responsibilities for Transnational Corporations and Other Business Enterprises". See Sub-Commission, Human Rights Principles and Responsibilities for Transnational Corporations and Other Business Enterprises, UN Doc. E/CN.4/Sub.2/2002/WG.2/WP.1 (2002). At the 2002 Sub-Commission meeting, the Working Group dropped the word "Principles" in an attempt to shorten the name. The Working Group also attached a revised version to its Report, entitled "Norms of Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights". See Sub-Commission, Report of the sessional Working Group on the Working Methods and Activities of Transnational Corporations, UN Doc. E/CN.4/Sub.2/2002/13 (2002) [hereinafter 2002 Working Group Report]. One slight change has been made to the name prior to approval, but this name appeared to retain the most stability and agreement among the Working Group members.

21See Seminar Report, supra note 20.

22 The suggestion to shorten the text into broad substantive provisions and then follow each provision with a commentary was adopted and incorporated into the 2001 draft. The approach was based on the structure of several other UN human rights instruments, such as the United Nations Standard Minimum Rules for the Administration of Juvenile Justice ( "The Beijing Rules" ), GA Res. 40/33, annex, 40 UN GAOR Supp. (No. 53) at 207, UN Doc. A/40/53 (1985). Additionally, the order of the subjects in the draft was reformulated to follow the somewhat analogous provisions in Article 5 of the International Convention on the Elimination of All Forms of Racial Discrimination, opened for signature Mar. 7, 1966, 660 UNTS 195.

23 Sub-Commission, Draft Universal Human Rights Guidelines for Companies, Introduction, UN Doc. E/CN.4/Sub.2/2001/WG.2/WP.1 (2001); 2001 Draft Guidelines, supra note 20; Sub-Commission, Draft Universal Human Rights Guidelines for Companies: Addendum 2, Draft Universal Human Rights Guidelines for Companies with Source Materials, UN Doc. E/CN.4/Sub.2/2001/WG.2/WP.1/Add.2 (2001); Seminar Report, supra note 20.

24 Sub-Commission, The effects of the working methods and activities of transnational corporations on the enjoyment of human rights, UN Doc. E/CN.4/Sub.2/RES/2001/3 at 4(c)(2001).

25 The five members at that time and at the present include Miguel Alfonso-Martinez (Cuba), El-Hadji Guissé (Senegal), Vladimir Khartashkin (Russia), Soo-Gil Park (South Korea), and David Weissbrodt (United States).

26 Three members of the Working Group submitted the Commentary, including Vladimir Khartashkin, Soo-Gil Park, and David Weissbrodt. See Sub-Commission, Human Rights Principles and Responsibilities for Transnational Corporations and Other Business Enterprises With Commentary on the Principles, UN Doc. E/CN.4/Sub.2/2002/WG.2/WP.1/Add.2 (2002). The Working Group lacked sufficient time to review comprehensively the Commentary to the Norms at its three full days of meeting in February 2002.

27See 2002 Working Group Report, supra note 20; Sub-Commission, Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights, UN Doc. E/CN.4/Sub.2/2002/13 at 15-21 (2002) [hereinafter 2002 Responsibilities].

28See Sub-Commission, The relationship between the enjoyment of economic, social and cultural rights and the right to development, and the working methods and activities of transnational corporations, UN Doc. E/CN.4/Sub.2/RES/2002/8 (2002).

29See Norms, supra note 1; Sub-Commission, Commentary on the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights, UN Doc. E/CN.4/Sub.2/2003/38/Rev.2 (2003) [hereinafter Commentary].

30See Norms, supra note 1, at pmbl; Commentary, supra note 14, at pmbl.

31 See Sub-Commission, Report of the sessional Working Group on the Working Methods and Activities of Transnational Corporations, UN Doc E/CN.4/SUb.2/2003/13 (2003) [hereinafter 2003 Working Group Report].

32See Resolution 2003/16, supra note 2, at & 1.

33Seeid. at && 2&3.

34 See id . at & 5.

35See id. at & 7.

36See Non-Governmental Organizations Welcome the New UN Norms on Transnational Businesses (August 13, 2003) (on file with author).

37 Amnesty International and Christian Aid began using the Draft Norms as the basis for their assessment of business conduct and campaign efforts even before the Norms were adopted.

38 The aim of the "Initiative for Respect in partnership with Mary Robinson and the Ethical Globalisation Initiative is to show leadership within the business sector on how human rights can be incorporated into the centre of the CSR [corporate social responsibility] and Governance debates". E-mail message of John Morrison (August 26, 2003) (on file with author); see also, John Morrison, Business and Human Rights, 2 New Academy Review 8 (2003). The seven founding companies of the Initiative are: ABB, Barclays Bank, National Grid Transco, Novartis, Novo Nordisk, MTV, and The Body Shop International. During their first meeting in Zurich during June 2003, the group agreed that one of the priorities should be to "road-test" the Norms.

39 The Norms also represent an important step in applying international law to business enterprises as nonstate actors. In taking that step the Norms build upon such precedents as the Universal Declaration of Human Rights, Universal Declaration of Human Rights, G.A. res. 217A (III), UN Doc A/810 at 71 (1948) which applies not only to states but also to such "organs of society" as businesses; the responsibilities under humanitarian law imposed on armed oppositions as nonstate actors; the Convention on the Prevention and Punishment of the Crime of Genocide, 78 U.N.T.S. 277, entered into force Jan. 12, 1951; and individual criminal responsibility (including for corporate officers) established by the Rome Statute of the International Criminal Court, UN Doc. A/CONF.183/9 (1998), entered into force July 1, 2002; as well as increasing responsibilities voluntarily assumed by businesses under the OECD Guidelines for Multinational Enterprises (see note 11, supra); the ILO Tripartite Declaration on Principles concerning Multinational Enterprises (see note 12, supra); and the Global Compact (see note 13, supra). Due to the length limitations on Current Development pieces, this article does not address that issue in greater detail.

40 As one author stated, "strangely, there is no agreed definition for a transnational corporation". Alejo José G. Sison, When Multinational Corporations Act as Governments: The Mobil corporation experience, in Perspectives on Corporate Citizenship 168 (Jörg Andriof & Malcolm McIntosh eds., 2001).

41See Barbara Frey, The Legal and Ethical Responsibilities of Transnational Corporations in the Protections of International Human Rights, 6 Minn. J. Global Trade 153 (1996) (citing Jonathan Charney, Transnational Corporations and Developing Public International Law, 1983 Duke L.J. 748, 749 n. 1 (1983 )); Menno T. Kamminga, Holding Multinational Corporations Accountable for Human Rights Abuses: A Challenge for the EC, in Philip Alston, The EU and Human Rights 553 (1999) ( "The simplest definition of multinational corporation is > an enterprise which owns or controls production or services facilities outside the country in which it is based".); Werner Feld, Nongovernmental Forces and World Politics 20-23 (1972).

42 Luzius Wildhaber, Some aspects of the Transnational Corporation in International Law, 27 Neth. Int = l Rev. 79, 80 (1980).

43 Detlev Vagts, The Multinational Enterprise: A New Challenge for Transnational Law, 83 Harv. L. Rev. 739, 740 (1980). See also Raymond Vernon, Economic Sovereignty at Bay, 47 Foreign Aff. 110, 114 (1968).

43 Detlev Vagts, The Multinational Enterprise: A New Challenge for Transnational Law, 83 Harv. L. Rev. 739, 740 (1980). See also Raymond Vernon, Economic Sovereignty at Bay, 47 Foreign Aff. 110, 114 (1968).

44 See Sison, supra note 40.

45See Vagts, supra note 43, at 740. Arghyrios A. Fatouros has proposed the following definition of a transnational enterprise (TNE): "a complex of legally discrete entities (ie., companies) established in several countries, forming a single economic unit (enterprise) which engages in operations transcending national borders under the direction of a sole decision-making center". Arghyrios A. Fatouros, Transnational Enterprise in the Law of State Responsibility,in International Law of State Responsibility for Injuries to Aliens 361, 362 (Richard Lillich ed., 1983). See also Transnational Corporations: International Legal Framework 227 (Arghyrios A. Fatouros ed., 1987); David Bergman, Corporations and ESC Rights, in International Human Rights Internship Program, Circle of Rights 485, 490 (2000).

46 ILO Tripartite Declaration, supra note 12, at & 6.

47 UN Code of Conduct for Transnational Corporations, supra note 10.

48 Norms, supra note 1, at & 20.

49Id. at & 21. A member of the Working Group provided this definition for the document and it was accepted by the Working Group at its March 2002 meeting.

50See infra note 56. The Norms focus on transnational corporations because those large businesses raise the greatest international concern and are the least susceptible to national regulation, but the Norms apply to all business enterprises. At the same time the Norms are not expected to apply as rigorously to small, local businesses with no connection to transnational corporations.

51 UN Code of Conduct for Transnational Corporations, supra note 10.

52 ILO Tripartite Declaration, supra note 12, at & 14.

53 OECD Guidelines, supra note 11.

54 UN Code of Conduct for Transnational Corporations, supra note 10.

55 The manner and extent to which they apply raise further issues. See discussion infra Sect. III (distinguishing between larger and small operations).

56 The Norms do not establish an exception but de-emphasize implementation as to small, local business: "These Norms shall be presumed to apply, as a matter of practice, if the business enterprise has any relation with a transnational corporation, the impact of its activities is not entirely local, or the activities involve violations of the right to security as indicated in paragraphs three and four". Norms, supra note 1, at & 21.

57 See Georg Kell and John Gerard Ruggie, Global markets and social legitimacy: the case for the Global Compact, 8 Transnatl Corp. 101, 111 (1999) (referring to earlier proposals for binding standards to be imposed through the World Trade Organization, "opponents are deeply concerned that seeking to impose such standards through the trade regime would be an open invitation to exploit them for protectionist purposes, to the grave disadvantages of the developing countries and the trade regime as a whole".).

58 OECD Guidelines, supra note 11, at II, & 8.

59 Norms, supra note 1, at & 15.

60 Commentary, supra note 29, at & 15(c).

Some have argued that the Norms create a "one-size fits all" approach which will be unable to accommodate adequately for the diversity of business types, sizes, and activities. 61 The Norms, however, do not employ a one-size fits all approach, but in fact deftly establish a system of relative application based on the strength, size, and other varying factors of a business which bear on its ability to affect human rights. This nuanced approach does not lower the standards for any business; it simply ensures that those with greater power and influence also have greater responsibilities.

 

The responsibility to promote and secure human rights applies in varying degrees to the private sector, for example: principles directly affecting employees; principles involving public and private business partners and their employees; principles affecting the community and the general human rights environment of that community; and other principles that can implicate the relationship of a business with public institutions, or can involve concerns for individual human rights, the environment, and the relevant community. 62 The degrees of responsibility suggest that principles for businesses should not just address issues in which a business assumes obvious direct responsibility, such as corporate labor standards, but should also include areas in which a business can assume further responsibility, through practices such as outsourcing of products or services. It should also address situations in which at least larger businesses can influence governmental actions, through, for example, encouraging the government to improve the human rights environment of a community. A set of human rights principles for businesses can be of assistance in all of these contexts. No company, no matter how influential,however, can be asked to replace governments in their primary responsibility for the protection of human rights. 63

 

The Norms, which do not distinguish between businesses on the basis of the domestic or international nature of their operations, do reflect differences between corporations with regard to their ability to assert influence on markets, governments, stakeholders, and communities by providing in the first paragraph:

States have the primary responsibility to promote, secure the fulfilment of, respect, ensure respect of, and protect human rights recognised in international as well as national law, including assuring that transnational corporations and other business enterprises respect human rights. Within their respective spheres of activity and influence, transnational corporations and other business enterprises have the obligation to promote, secure the fulfilment of, respect, ensure respect of, and protect human rights recognized in international as well as national law, including the rights and interests of indigenous peoples and other vulnerable groups. 64

The Norms recognize that opportunities to assert influence may be significantly greater for transnational and other businesses with larger resources. Accordingly, larger businesses generally have broader activities and influence and thus have greater responsibility for promoting and protecting human rights. Smaller business enterprises may not be as capable of asserting the same amount of influence as larger corporations, but can still be accountable to similar standards for the protection of human rights, especially those directly affecting employees and local community conditions. Hence, the flexible approach of the Norms provides that businesses are responsible according to their respective spheres of activity and influence. By including all businesses, the Norms recognize that all business enterprises can make a positive contribution by developing, adopting, and implementing human rights principles.

 

Content of the Norms.

 

The Norms reflect and restate the relevant principles from a wide range of human rights, labor, humanitarian, environmental, consumer protection, and anti-corruption legal principles, but also incorporate the best and most commonly used provisions from less binding documents. Further, the Norms do not endeavor to freeze standards to the extent that it draws upon past drafting efforts and present practices. The Norms incorporate and encourage further evolution.

 

The Norms appear to be more comprehensive and more focused on human rights than any of the international legal or voluntary codes of conduct that have been established by the ILO, OECD, European Parliament, UN Global Compact, trade groups, individual companies, unions, NGOs, or others. The Norms and Commentary include the right to equality of opportunity and treatment; the right to security of persons; the rights of workers, including a safe and healthy work environment and the right to collective bargaining; respect for international, national, and local laws and the rule of law; a balanced approach to intellectual property rights and responsibilities; transparency and avoidance of corruption; respect for the right to health as well as other economic, social, and cultural rights; other civil and political rights, such as freedom of movement; consumer protection; and environmental protection. In respect to each of those subjects, the Norms largely reflect, restate, and refer to existing international norms, in addition to containing some very basic methods for implementation.

 

It is also important to point out that the very first principle, entitled "General Obligations", states, as clearly as possible, that the Norms are in no manner intended to reduce the obligations of governments to promote, secure the fulfilment of, respect, ensure respect of, and protect human rights . 65 The Norms would be misused if they were employed by a government as a reason for failing fully to protect human rights or failing to provide appropriate remedies for human rights violations. This idea is further reinforced by the savings clause in paragraph nineteen. The savings clause states that nothing in the Norms should be construed as diminishing States obligations to protect and promote human rights or construed so as to limit rules or laws that provide greater protection of human rights. 66

 

The Norms include some basic implementation procedures and anticipate that they may eventually be supplemented by other techniques and processes. First, the Norms anticipate that companies will adopt and implement their own internal rules of operation to assure the protections set forth in the instrument. 67 Second, the Norms indicate that businesses would be subject to periodic monitoring that is independent, transparent, and includes input from relevant stakeholders . 68 Further, pursuant to concerns raised at the 2002 Sub-Commission meeting, the Working Group added a norm calling upon businesses to provide adequate reparations to those who have been harmed by conduct that was inconsistent with the standards provided in the Norms. 69 The addition of this principle indicates the Working Group's intent not only to stop conduct that violates human rights standards, but also to repair past harms done. It can be further read as an indication of the Working Group's intent not only to make a statement regarding the appropriate conduct of businesses, but also to require action on the part of businesses. 70

 

The non-voluntary nature of the guidelines

 

The Norms as adopted are not a voluntary corporate social responsibility initiative. The Norms include many implementation provisions, which indicates that they are not just aspirational statements of desired conduct. Further, Sub-Commission resolution 2003/16 included the creation of a mechanism for NGOs and others to submit information about businesses which are not meeting the minimum standards of the Norms. The non-voluntary nature of the Norms therefore goes beyond the voluntary guidelines found in the UN Global Compact, the ILO Tripartite Declaration, and the OECD Guidelines for Multinational Enterprises.

 

The Norms, although not voluntary, are also not a treaty either. Treaties constitute the primary sources of international human rights law. The UN Charter is both the most prominent treaty and contains seminal human rights provisions in Articles 1, 55, and 56. The United Nations has further codified and more specifically defined international human rights law in a number of treaties. Treaties create legal obligations for those nations that are party to them.

 

The legal authority of the Norms derive principally from their sources in international law in treaties and customary international law as a restatement of international legal principles applicable to companies. 71 The United Nations has promulgated dozens of declarations, codes, rules, guidelines, principles, resolutions, and other instruments, in addition to treaties, that interpret the general human rights obligations of member States under Articles 55 and 56 of the UN Charter and may reflect customary international law. The Universal Declaration of Human Rights is the most prominent of those human rights instruments, which not only provides an authoritative, comprehensive, and nearly contemporaneous interpretation of the human rights obligations under the UN Charter, but also has provisions that have been recognized as reflective of customary international law. 72

Although the interplay of treaty law, non-treaty law, and customary international law is quite complex, some observers have for working purposes identified two types of international law: "hard" law, such as treaties, and "soft" law such as recommendations. 73 Hard law is clearly intended to create legally binding obligations from the outset, whereas soft law starts in the form of recommendations and over a period of time may be viewed as interpreting treaties andhelping to establish custom or may serve as the basis for later drafting of treaties.

 

It would be unrealistic to expect business human rights standards to become the subject of treaty obligations immediately. The development of a treaty requires a high degree of consensus among nations, and although a few countries have already indicated their support for the Norms, there does not yet appear to be an international consensus on precisely what place businesses and other non-state actors have in the international legal order. The Norms, like numerous other UN recommendations and declarations, have started as "soft" law. As in preparation for drafting almost all human rights treaties, the United Nations begins with declarations, principles, or other soft law instruments. Such steps are necessary to develop the consensus required for treaty drafting. 74 Some declarations, however, have not been codified in the form of treaties because of a lack of adequate consensus. 75

 

Any treaty takes years of preliminary work and consensus building before it has a chance of receiving the approval necessary to be adopted and enter into force. Even soft law instruments may take years to develop. For example, the UN Draft Declaration on the Rights of Indigenous Peoples 76 took twelve years of drafting in the Sub-Commissions Working Group on Indigenous Populations, has already been the subject of deliberations in the Commissions Open-Ended Working Group for another nine years, and is likely to require some additional time.

 

After drafting by lesser UN bodies, such as the Sub-Commission and the Commission, the General Assembly adopts and promulgates treaties and other instruments. For example, after the General Assembly in 1948 adopted the Universal Declaration of Human Rights containing several provisions on economic and social rights, it took the Commission and the General Assembly eighteen years before the General Assembly in 1966 adopted and promulgated the International Covenant on Economic, Social and Cultural Rights 77 as a multilateral treaty. Soft law standards, however, may be adopted at any one of the many different levels within the United Nations. For example, the Norms as adopted and promulgated by the Working Group are similar to the "Body of Principles for the Protection of All Persons under Any Form of Detention or Imprisonment" adopted by the Working Group on Arbitrary Detention; 78 and as adopted and promulgated at the Sub-Commission level are similar to the resolution on "Housing and property restitution in the context of the return of refugees and internally displaced persons". 79 The Norms could be adopted and promulgated by the (1) Commission on Human Rights, such as "the protection of human rights in the context of human immunodeficiency virus (HIV) and acquired immunodeficiency syndrome (AIDS)", 80 (2) by the Economic and Social Council, such as the "Principles on the Effective Prevention and Investigation of Extra-Legal, Arbitrary and Summary Executions", 81 (3) and, of course, by the General Assembly, such as the "Declaration on the Elimination of Violence against Women". 82 Obviously, the higher the UN body and the more consensus achieved in adopting soft law principles, such as the Norms, the greater the authority the principles would obtain, 83 but also the principles will derive authority from broad acceptance in international practice.

 

Hence, the legal authority of the Norms now derive principally from their sources in international law as a restatement of international legal principles applicable to companies, but they have room to become more binding in the future. The level of adoption within the United Nations, further implementation by the Working Group, and increasingly broad acceptance of the Norms will continue to play an important role in the development of the binding nature of the Norms.

 

IV. IMPLEMENTATION

 

Implementation will be a key area of future development for the Norms. The Norms and its Commentary themselves also contain several provisions regarding implementation. Generally, the Norms start by discussing how businesses themselves can implement the Norms, and then move on to discuss how intergovernmental bodies (such as the United Nations), States, unions, and others can play a role in implementation. 84 These methods and others should be considered by the Working Group and others as the Norms continue to develop.

 

Implementation bybusiness enterprises.

 

Realizing that human rights obligations will be most effective if internalized as a matter of company policy and practice, the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights call upon businesses to adopt the substance of the Norms as the minimum standards for their own company codes of conduct or internal rules of operation and to adopt mechanisms for creating accountability within the company. 85

 

The Norms then call upon companies to disseminate their adopted internal rules consistent with the Norms. Dissemination requires businesses to ensure that the Norms are communicated in a manner ensuring that all relevant stakeholders can understand their meaning. 86 Promulgation assuresthat those persons who are most affected by the companys actions know of the companys responsibility to promote and protect human rights. 87 It also ensures the companys responsibilities will be made known to the general public B further legitimating and institutionalizing the existence of its responsibilities. 88

 

Business enterprises adopting and disseminating 89 their codes of conduct should then implement internal rules of operation in conformity with Norms. They should provide training to managers and representatives in practices relevant to the Norms and inform all persons, enterprises, etc. who are potentially affected by dangerous conditions produced by the transnational corporation or business enterprise. 90

 

As mentioned previously, the Norms also address implementation issues with regard to each business's supply chain. First, the Norms call upon businesses to apply and incorporate the Norms into their contracts with their business partners, and ensure that they only do business with others who follows standards similar to the Norms. 91 The Commentary calls upon businesses to ensure that their supply chains are monitored to the extent possible. 92

 

A significant portion of implementation set forth in the Norms and Commentary involves monitoring. The Norms begin by calling on businesses to conduct internal monitoring. Businesses are to ensure that monitoring is transparent by disclosing the workplaces observed, remediation efforts undertaken, and other results of monitoring. 93 Businesses are also called upon to ensure that monitoring takes into account input from relevant stakeholders. 94 With regard to working conditions, unions are, of course, the principal stakeholders and in that context collective bargaining agreements cannot be replaced by the Norms or other mechanisms for corporate social responsibility.

 

Implementing the Norms also requires ensuring that businesses establish legitimate and confidential avenues for workers to file complaints regarding violations of the Norms, and to refrain from retaliatory actions against those workers that make complaints. 95 Once again, collective bargaining agreements and union procedures must be maintained. Businesses also must make a record of all complaints, take the proper steps to resolve the complaints, and take action to prevent reoccurrences. 96

 

The Norms further call upon businesses periodically to report on and take other measures to fully implement the Norms. 97 The Commentary further calls on businesses to work in a transparent manner, by regularly disclosing information about their activities, structure, financial situation, and performance; as well as providing information regarding the location of their offices, subsidiaries, and factories. 98 Businesses must also inform individuals who may be harmed by conditions which the businesses have created. 99

 

Businesses must also engage in periodic assessment and the preparation of impact statements. 100 Assessments and impact statements should take into account comments made by stakeholders, and the results of any such assessments should be made available to all relevant stakeholders. Businesses are also called on to assess the human rights impact of major new projects. 101 Where an assessment shows inadequate compliance with the Norms, the Commentary calls upon the business to include a plan of action for reparation and redress. 102

United Nations.

 

The Norms also provide several suggestions as to how the United Nations could aid in the implementation of the Norms. For example, the Norms suggest that human rights treaty bodies could use the Norms in the creation of additional reporting requirements for States. 103 The Norms could also be used by most of the human rights treaty bodies as the basis for their efforts to draft General Comments and Recommendations relevant to the activities of business enterprises. 104 The additional reporting requirements would request States to include reports about the compliance of business enterprises within their respective treaty regimes. 105 The treaty bodies could also use such a General Comment and thus the Norms in preparing their country conclusions and recommendations on States compliance with already existing treaty provisions. A further mechanism not mentioned specifically in the Norms or Commentary would be for the four treaty bodies with individual communications procedures to receive communications regarding governments that have failed to take effective action in response to business abuses under the respective treaties as elaborated by the Norms as well as by related General Comments and Recommendations. 106

 

The Commentary also mentions implementation by the special rapporteurs or other thematic procedures of the UN Commission on Human Rights. They could use the Norms, Commentary, and other relevant international standards for raising concerns about actions by business enterprises within their respective mandates. For example, the Commissions Special Rapporteur on adequate housing might express concerns about company actions that have resulted in forced evictions. 107 The Norms and Commentary could possibly be used to create a new thematic procedure on transnational corporations and human rights within the context of the Commission or the General Assembly.

 

The Commentary further discusses its potential use by the UN and related institutions for determining which products and services to purchase and with which businesses to develop partnerships. 108 The Norms could also be used for the development of an interactive website to post international human rights standards in regard to businesses and to receive information from individuals and organizations about the conduct of businesses in compliance with the relevant standards and codes of conduct. 109

 

Other intergovernmental organizations.

 

The Norms further call upon other international and national mechanisms, already in existence or yet to be created, to implement the Norms through periodic monitoring and verification. 110 For example, a number of intergovernmental bodies may find the Norms useful in developing, amplifying, or interpreting their own standards. The ILO and OECD could take the Norms into account when making clarifications on their already existing standards for businesses. Similarly, the OECD could use the Norms in the context of their National Contact Points. The World Bank and its constituent institutions have adopted standards for loans relating to their impact on indigenous peoples, the environment, transfer of populations, sustainable development, and gender equality. 111 The Norms might be helpful in amplifying and interpreting those World Bank standards as well as encouraging further World Bank standards.

 

The World Trade Organization agreements, which generally prohibit states from creating trade limitations, contain several exceptions allowing states to restrict trade when certain conditions are met. 112 For example, in its Agreement on Sanitary and Phytosanitary Measures, the WTO prefers to follow international standards in determining if certain technical regulations that create trade limitations are necessary to protect human, animal or plant life or health. 113 Similarly, the WTOs Agreement on Technical Barriers to Trade states that "general terms for standardization and procedures for assessment of conformity shall normally have the meaning given to them by definitions adopted within the United Nations system and by international standardizing bodies . . .. " 114 It is conceivable that the Norms could be considered one such international standard.

 

The Norms may also to be used for the creation of human rights standards on a region-by-region basis to address specific issues. 115 For example, after the passage of the North American Free Trade Agreement (NAFTA), two mechanisms were created to oversee the implementation of NAFTA with regard to environmental and labor standards. Those two mechanisms, the North American Agreement on Environmental Cooperation 116 and the Agreement on Labor Cooperation 117 , do not rely upon existing international standards for their decisions; however, the Norms could be used as a basis for fact-finding or interpreting the NAFTA standards. The European Parliament has adopted a resolution referring to basic international standards applicable to multinationals and calling upon the European Union to create a legally binding code of conductfor all multinationals headquartered in the European Union (EU). 118 In addition, the EU Commission requested a study of the possibility of creating a European Monitoring Platform (EMP) in connection with their code of conduct. Particularly, the Commission requested that creation of the EMP involve participation from northern and southern NGOs, as well as indigenous and local communities, to help ensure that the EMP protects individuals in host countries anywhere in the world. The EMP, once operating, would be open to receive complaints from community and/or workers representatives, nongovernmental organizations, individual victims, or other sources from all over the world with regard to actions taken by companies that violate the EU Code of Conduct. The Working Group may take lessons from the establishment of the EMP, or the EMP may ultimately decide to use the Norms to help draft or interpret the EU Code of Conduct. Certainly, the Norms would be more comprehensive and more effective in protecting human rights than the OECD Guidelines that contain only a single sentence on human rights.

 

Regional human rights commissions and courts should also use the Norms. For example, two European Court of Human Rights cases involving corporate environmental pollution negatively affecting private and family life under Article 8 of the European Convention on Human Rights have found States liable for not conducting regulation and inspection to prevent the corporate misconduct. 119 In such situations, regional courts could refer to the Norms in determining the obligation of States and thereby encourage States to monitor the conduct of businesses within their borders. Additionally, the African Commission on Human and Peoples' Rights could have used the Norms for an additional basis for its decision against the military government in Nigeria as to its involvement and failure to limit the activities of oil companies in violating the economic and environmental rights of Ogoni residents. 120

 

Unions.

 

The Commentary encourages trade unions to use the Norms as a basis for negotiating agreements with businesses and monitoring compliance of businesses with the Norms. 121 The Norms guarantee freedom of association, including the right to establish and maintain trade unions, as well as effective recognition of the right to collective bargaining pursuant to the relevant conventions of the International Labor Organization. Unions and collective bargaining have a critical role to play in protecting the rights of workers that should be reinforced by the Norms and other corporate social responsibility standards.

 

NGOs.

 

The Commentary also encourages NGOs to use the Norms as the basis for their expectations of business conduct and monitoring compliance of businesses with the Norms. 122

 

Investors, lenders, and consumers.

 

The Commentary mentions use of the Norms as the basis for ethical investment initiatives and other compliance benchmarks. 123 Self-assessments, assessments by consultants, independent social audits, etc. if done in accordance with the Norms could be used by individual investors and socially responsible mutual funds in making their investment decisions. Banks and other lending institutions may use this information in deciding whether to lend credit. Consumers or consumer groups could use the Norms in formulating socially responsible purchasing decisions.

 

Business groups or trade associations .

 

The Norms further call upon industry groups, for example a trade association, to use the Norms in their monitoring. 124 Industry groups might adopt or adapt the Norms as their own industry code of conduct for those businesses which are members. The Norms could be used by a consortium of business enterprises as a prerequisite of membership, 125 or could be used to support the creation of a labeling system to identify products and services created under the specific standards so as to promote ethical purchasing patterns. 126

States .

The Norms also call upon States to implement the Norms. 127 The Norms ask States to use the Norms to establish and reinforce the necessary legal or administrative framework with regard to the activities of each company having a statutory seat in that country, under whose law it was incorporated or formed, where it has its central administration, where it has its principal place of business, or where it is doing business. 128 The Norms also encourage use of the Norms by national courts in connection with determining damages, criminal sanctions, and in other respects, as established by national or international law. 129 In addition, those countries where legislation already applies to the activities of business enterprises, courts could use the Norms to interpret legal standards. 130 For example, courts might refer to the Norms in assessing whet

61 See Joint View of the IOE and ICC on the draft norms on the responsibilities of transnational corporations and other business enterprises with regard to human rights (July 30, 2002) (on file with author)

62 See Business and Human Rights, supra note 6. For a discussion on levels of responsibility, see Frey, supra note 41; Douglass Cassel, International Security in the Post-Cold War Era: Can International Law Effect Global Political and Economic Stability? Corporate Initiatives: A Second Human Rights Revolution, 19 Fordham Intl L.J. 1963 (1996); Steven R. Ratner, Corporations and Human Rights: A Theory of Legal Responsibility, 11 Yale L. J. 443 (2001).

63 See Business and Human Rights, supra note 6.

64 Norms, supra note 1, at & 1.

65 Norms, supra note 1, at & 1.

66 Id . at & 19.

67 See id. at & 15.

68 See id. at & 16.

69 "Transnational corporations and other business enterprises shall provide prompt, effective, and adequate reparation to those persons, entities, and communities that have been adversely affected by failures to comply with these Norms through, inter alia , reparations, restitution, compensation, and rehabilitation for any damage done or property taken. In connection with determining damages, in regard to criminal sanctions, and in all other respects, these Norms shall be enforced by national courts and/or international tribunals, pursuant to national and international law". Id. at & 18.

70 See id. at & 17.

71 Cf., e.g., International Law Commission, Draft Code of Offences against the Peace and Security of Mankind, Report of the International Law Commission on its 6th Session, 9 GAOR, Supp. (No. 9), UN Doc. A/2693 (1954), reprinted in 2 Y.B. Intl L. Comm = n (1954); Draft Articles on Responsibility of States for Internationally Wrongful Acts, in Report of the International Law Commission on the Work of its Fifty-third Session, UN GAOR, 56 th Sess., Supp. No. 10, UN Doc. A/56/10 (2001).

72 See Hurst Hannum, The Status of the Universal Declaration of Human Rights in National and International Law, 25 Ga. J. Intl & Comp. L . 287 (1995/96). Among other prominent non-treaty human rights instruments are: Standard Minimum Rules for the Treatment of Prisoners; Declaration on the Rights of Disabled Persons; Code of Conduct for Law Enforcement Officials; Declaration on the Right to Development; Body of Principles for the Protection of All Persons under Any Form of Detention or Imprisonment; Principles on the Effective Prevention and Investigation of Extra-Legal, Arbitrary and Summary Executions; Declaration on the Protection of All Persons from Enforced Disappearances; Declaration on the Protection of All Persons Belonging to National or Ethnic, Religious or Linguistic Minorities; Declaration on the Elimination of Violence Against Women; Vienna Declaration and Platform of Action; and Beijing Declaration and Platform of Action.

73 See Dinah L. Shelton, Compliance with International Human Rights Soft Law, in International Compliance with Non-Binding Accords 119 (Edith Brown Weiss ed., 1998).

74 The consensus surrounding some declarations has evolved quite quickly to prompt the development of a treaty. For example, the Declaration on the Protection of All Persons from Being Subjected to Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment of 1975 (G.A. res. 3452 (XXX), annex, 30 UN GAOR Supp. (No. 34) at 91, UN Doc. A/10034 (1975) was followed quite rapidly by the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment of 1984. G.A. res. 39/46, annex, 39 UN GAOR Supp. (No. 51) at 197, UN Doc. A/39/51 (1984), entered into force June 26, 1987.

75 See, e.g., Declaration on the Elimination of All Forms of Intolerance and of Discrimination Based on Religion or Belief, GA Res. 36/55, 36 UN GAOR Supp. (No. 51) at 171, UN Doc. A/36/684 (1981).

76 Sub-Commission, Draft Declaration on the Rights of Indigenous Peoples, E/CN.4/Sub.2/1994/2/Add.1 (1994).

77 International Covenant on Economic, Social and Cultural Rights, G.A. res. 2200A (XXI), 21 UN GAOR Supp. (No. 16) at 49, UN Doc. A/6316 (1966), 993 UNT.S. 3, entered into force Jan. 3, 1976.

78 UN Commission on Human Rights Working Group on Arbitrary Detention, Body of Principles for the Protection of All Persons under Any Form of Detention or Imprisonment regarding the situation of immigrants and asylum seekers, UN Doc. E/CN.4/2000/4/Annex 2 (1999).

79 UN Sub-Commission on Prevention of Discrimination and Protection of Minorities, Housing and property restitution in the context of the return of refugees and internally displaced persons, UN Doc. E/CN.4/SUB.2/RES/1998/26 (1998).

80 UN Commission on Human Rights, Protection of human rights in the context of human immunodeficiency virus (HIV) and acquired immunodeficiency syndrome (AIDS), UN Doc. E/CN.4/RES/1997/33 (1997).

81 Principles on the Effective Prevention and Investigation of Extra-Legal, Arbitrary and Summary Executions, ESC Res. 1989/65, annex, 1989 UN ESCOR Supp. (No. 1) at 52, UN Doc. E/1989/89 (1989).

82 Declaration on the Elimination of Violence Against Women, G.A. res. 48/104, 48 UN GAOR Supp. (No. 49) at 217, UN Doc. A/48/49 (1993).

83 See Rosalyn Higgins, The Development of International Law through the Political Organs of the United Nations (1963).

84 Additionally, Sub-Commission resolution 2003/16 establishes a mechanism in the Working Group for receiving information about violations by companies. See supra note 34 and accompanying text.

85 See Norms, supra note 1, at & 15. Depending on the resources and capabilities of the business enterprise, businesses should consider creating ethics committees and/or appointing ethics officers to provide oversight, counseling, and promotion of the code. Employee incentives can also be used to create accountability within a company. For example, conduct consistent with the code could be used as a basis for promotion or wage increases.

86 See Commentary, supra note 14, at & 15(a).

87 Adoption and dissemination by a company could create implicit contractual obligations, and thereby be used by stakeholders as a basis for advocacy or even litigation if the company fails to meet the standards stated in their promulgated human rights statements or assessments. See Ralph Steinhardt, Multinational Corporations and International Human Rights Law: The New Lex Mercatoria, in Non-State Actors and Human Rights (Phillip Alston ed., forthcoming 2003).

88 In the United States, it may be in the corporation's interest to adopt and promulgate a corporate code of conduct. Corporations held criminally liable for the conduct of their agents can have their sentences reduced if the corporation has an A effective compliance program @ in place to detect and deter employee violations of the law while working for the corporation. U.S. Sentencing Comm'n, Guidelines Manual ' 8A1.2, application note 3(k) (1995). That sentencing guideline has been a great incentive for U.S. corporations to establish company codes of conduct.

89 Another way of disseminating such assessments and making the assessments more comparable would be to establish a standardized numerical system for evaluating company performance under the Norms. One such standardized numerical system has been proposed by the Secretariat of the Caux Roundtable. The Caux Round Table, Caux Round Table Self-Assessment and Improvement Program, <http://www.cauxroundtable.org/Implementation%20Tools.HTM> (visited Sept. 2, 2003). Another means of verification would be through a corporate social audit similar to the current system used by public accountants for auditing company financial statements. The results of such an independent social audit could then be separately published or attached to the company annual report.

90 See Commentary, supra note 14, at && 15(b)&(e).

91 The Norms call upon businesses to incorporate the Norms in all A their contracts or other arrangements and dealings with contractors, subcontractors, suppliers, licensees, distributors, or natural or other legal persons that enter into any agreement with the transnational corporation of other business enterprise. @ See Norms, supra note 1, at & 15. The Norms do not call upon businesses immediately to stop doing business with others who do not comply with the Norms, but instead call upon businesses to "initially work [with the partner] to reform or decrease violations, but if they will not change, . . . to cease doing business with them". See Commentary, supra note 14, at & 15(c).

92 See Commentary, supra note 14, at & 16(d).

93 See id. at & 16(c).

94 See id. at & 16(i).

95 See id. at & 16(d).

96 See id. at & 16(e).

97 See Norms, supra note 1, at & 15.

98 See Commentary, supra note 14, at & 15(d).

99 See id. at & 15(e).

100 See id. at && 16(g)&(i). Impact statements can be used to examine ways to avoid or reduce adverse human rights consequences related to a proposed action. Impact statements include a description of the action, its need, anticipated benefits, an analysis of any human rights impact related to the action, an analysis of reasonable alternatives to the action, and identification of ways to reduce any negative human rights impacts.

101 See id. at & 15(g).

102 See id. at & 16(h).

103 See id. at & 16(d). See Anne Bayefsky, The UN Human Rights Treaty System in the 21st Century (2000); The Future of Human Rights Treaty Monitoring (Philip Alston & James Crawford eds., 2000).

104 For example, the Committee on Economic, Social and Cultural Rights might use the Norms in drafting, adopting, and applying a General Comment on the obligations of businesses to protect rights set forth in the International Covenant on Economic, Social and Cultural Rights. See, e.g., Committee on Economic, Social and Cultural Rights, General Comment 7, The right to adequate housing (Art. 11 (1)): forced evictions, UN Doc. E/C.12/1997/4 (1997); Committee on Economic, Social and Cultural Rights, General Comment 13, The right to adequate food (Art. 11), UN Doc. E/C.12/1999/5, para. 20 (1999); Committee on Economic, Social and Cultural Rights, General Comment 13, The right to the highest attainable standard of health, UN Doc. E/C.12/2000/4, para. 50 (1999); Human Rights Committee, General Comment 16, (Twenty-third session, 1988), Compilation of General Comments and General Recommendations Adopted by Human Rights Treaty Bodies, UN Doc. HRI\GEN\1\Rev.1, para.1 (1994); Committee on Economic, Social and Cultural Rights, General Comment 15, The right to water, UN Doc. E/C.12/2002/11, para. 23 (2002).

105 Article 5 of the Convention on the Elimination of All Forms of Racial Discrimination requires States to regulate the activities of private parties extensively in order to prevent discrimination in areas such as the right to work, right to form and join trade unions, and the right to housing. See International Convention on the Elimination of All Forms of Racial Discrimination, supra note 22, Art. 5. The Committee on the Elimination of All Forms of Racial Discrimination could increase its attention to a State' s regulation of corporations and ask States particularly to report on corporate behavior in light of the Norms. This same requirement could be used for reporting in connection with the Convention on the Elimination of Discrimination Against Women and the Convention on the Rights of the Child. See also Sub-Commission, Asbjørn Eide, Corporations, States and human rights: a note on responsibilities and procedures for implementation and compliance, UN Doc. E/CN.4/Sub.2/WG.2/WP.2 (2001) [hereinafter Eide Working Paper].

106 Mechanisms for individual complaints have been established under four principal human rights treaties. See Race Convention, supra note 22, at Art. 14; Convention Against Torture, supra note 74, at Art. 22(4)&(5); Optional Protocol to the International Covenant on Civil and Political Rights, G.A. res. 2200A (XXI), 21 UN GAOR Supp. (No. 16) at 59, UN Doc. A/6316 (1966), 999 U.N.T.S. 302, entered into force March 23, 1976. See also Eide Working Paper, supra note 105, at 12.

107 The Norms may also be useful to the Special Rapporteurs on the right to food; on the highest attainable standard of health; on extra-judicial, summary or arbitrary executions; and on the situation and fundamental freedoms of indigenous people. See also Eide Working Paper, id.

108 See Norms, supra note 1, at & 16(b). For example, the UNHCR employs procurement standards that call for consideration of the vendor = s environmental practices. UNHCR, UNHCR Guidelines for Environmentally Friendlier Procurement, OSCEA/STS (1996). UNICEF similarly uses procurement standards specifically regarding the supplier's compliance with national child labor laws and involvement in the sale or manufacture of land mines. See UNICEF Procurement Information, at

<http://www.supply.unicef.dk/business/procinfo.htm> (visited Sept. 2, 2003). Sub-Commission Resolution 2002/8 explicitly recommended that the Norms be used for the development of procurement standards (see Resolution 2002/8, supra note 28, at & 4(a)), but the Sub-Commission chose to focus on other implementation techniques in 2003. See supra note 2.

109 For an example of a website with an extensive amount of information on business and human rights, see Business & Human Rights: A Resource Website, at <http://www.business-humanrights.org> (visited Sept. 2, 2003).

110 See Norms, supra note 1, at & 16.

111 See World Bank Operational Policy (OP) 4.0 et seq (environmental protection and sustainable development guidelines); World Bank Operational Policies/Bank Procedures (OP/BP) 4.2 (protection of indigenous peoples and promotion); and Operational Policy (OP) 4.20 (promotion of gender equality).

112 Article XX of the 1947 General Agreement on Tariffs and Trade states ten exceptions in which a State may use trade-restrictive measures, including justifications such as the protection of public morals; the protection human, animal or plant life, or health; and the preservation of exhaustible natural resources. See Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15, 1994, 33 ILM 1140, reprinted in The Results of the Uruguay Round of Multilateral Trade Negotiations B The Legal Texts (1994).

113 See id. at Agreement on Sanitary and Phytosanitary Measures, Art. 2.1.

114 Id. at Agreement on Technical Barriers to Trade, Art. 1.1. The International Standards Organization (ISO) has been recognized as one such standardizing body for establishing specifications for products. ISO has also prepared standards for management systems and has begun to consider developing corporate social responsibility standards from a consumer perspective. See International Standards Organization, Development of International Standards, <http://www.iso.org/iso/en/commcentre/pressreleases/2003/Ref846.html> (visited Sept. 2, 2003).

115 Examples of regional codes used to address specific issues include: The Sullivan Statement of Responsibilities, 4 th Application, Nov. 8, 1984, 24 ILM 1464 (1985); Irish National Caucus; The MacBride Responsibilities (1984); Council of Economic Priorities Accreditation Authority; Maquiladora Standards of Conduct; Miller Responsibilities; Partner's Agreement to Eliminate Child Labor in the Soccer Ball Industry in Pakistan.

116 See North American Agreement on Environmental Cooperation, 32 ILM 1480 (1993).

117 See North American Agreement on Labor Cooperation, 32 ILM 1499 (1993).

118 European Parliament (EP), Resolution on EU standards for European Enterprises operating in developing countries: towards a European Code of Conduct, Resolution A4-0508/98 (1998).

119 Lopez Ostra v. Spain, ECHR (1994), Series A, No. 303-C; Guerra and Others v. Italy, ECHR (1998) 1998-I, No. 64.

120 See Social and Economic Rights Action Center and the Center for Economic and Social Rights v. Nigeria, African Comm. Hum. & Peoples = Rights, Comm. No. 155/96 (Oct. 13-27, 2001).

121 See Commentary, supra note 14, at & 16(c).

122 Id. For an example of an NGO making a statement on human rights responsibilities it believes all companies should follow, see Mark Curtis, Trade for Life: Making trade work for poor people (2001). As indicated above, some NGOs have already begun using the Norms as a basis for their assessment of company human rights behavior. See supra note 37.

123 See Commentary, supra note 14, at & 16(c).

124 See id. at & 16(c).

125 For example, Caux Round Table Responsibilities for Business (1986); Clean Clothes Campaign, Code of Labour Practices for the Apparel Industry Including Sportswear; and International Chamber of Commerce, Guidelines for International Investment and Business Charter for Sustainable Development.

126 Although established by an NGO, the SA8000 is an example of a labeling system used to alert consumers to the conditions in which a product was produced. The SA 8000, a human rights workplace standard development by Social Accountability International (SAI), allows retail and brand companies to join the SA8000 Signatory Program when they have demonstrated a commitment to achieving decent working conditions in their supply chains. To become a Signatory, each company defines the scope of its operations that it intends to bring into compliance with SA8000, develops a plan for achieving this goal, and issues annual progress reports to the public subject to verification by SAI before publication. Signatory benefits include the right to use the SA8000 Signatory logo. See SA8000 Signatory Benefits, at <http://ww.cepaa.org> (visited Sept. 2, 2003).

127 See Norms, supra note 1, at & 17.

128 See id.

129 See id. at & 18.

130 See Su-Ping Lu, Corporate Codes of Conduct and the FTC: Advancing Human Rights Through Deceptive Advertising Law, 38 Colum. J. Transnatl L . 603 (2000) (discussing how company human rights codes of conduct may be used by courts to hold companies liable under deceptive advertising laws). Although not mentioned in the Norms or Commentary, States could further encourage or require businesses to file reports about their compliance with the Norms in a central office or could make the filing of such annual reports a requirement of business registration, licensing, securities law, tax law, consumer protection law, etc.company has provided consumers or investors adequate information about their products and services. 131 In some countries compliance with the Norms might be relevant to determining liability for injuries caused by businesses and their officers. 132

V. CONCLUSION

Transnational corporations and other large businesses have experienced a significant increase in power since the trends of globalization started emerging and developing. With this increase in power comes an increase in responsibility. The UN Human Rights Norms for Transnational Corporations and Other Businesses help fill a major gap in the international human rights system which already addresses the responsibilities of governments, individuals, and armed opposition groups, but has not yet focused on one category of very powerful non-state actors, that is businesses.

Many companies have acknowledged their human rights obligations and the need to restore confidence in corporate social responsibility. The Norms provide companies that want to be socially responsible with an easily understood and comprehensive summary of their obligations with regard to human rights, humanitarian law, international labor law, environmental law, consumer law, anti-corruption law, etc. Accordingly, the Norms help provide a level playing field for competition. Clarifying the duties of businesses may actually benefit businesses as there is a growing body of evidence demonstrating that complying with human rights standards is beneficial to a company's bottom line. Consumers are often willing to take human rights conduct of a business into account in making their purchasing decisions. Businesses are also more likely to be exposed to liability for conduct that violates human rights standards. Clarification would provide greater guidance to businesses as to whether they should pursue a proposed course of conduct that might expose them to liability, consumer backlash, investor flight, and/or loss of the best and brightest employees. A number of companies have already expressed support for the Norms and agreed to apply them in their own operations as a way of understanding their commitment to the Universal Declaration of Human Rights.

Further, the Norms can work to strengthen the will of governments to insist that businesses avoid human rights abuses. The Norms will assist governments faced with the economic power of large companies in identifying and thus applying the international minimum standards that relate to the conduct of such companies.

Implementation still remains a key issue in the future development of these standards. While the Norms contain rudimentary mechanisms for implementation, the next step for the United Nations, States, businesses, and others will be to continue examining and developing effective methods of implementation.

* * * * * * * * * *

 

Report of the sub-commission on the promotion and protection of human rights

Report of the United Nations High Commissioner on Human Rights on the responsibilities of transnational corporations and related business enterprises with regard to human rights , U.N. Doc. E/CN.4/2005/91 (2005) * * *

Summary

The present report is submitted in response to Commission decision 2004/116. The report considers the scope and legal status of existing initiatives and standards on the responsibilities of transnational corporations and related business enterprises with regard to human rights as well as outstanding issues that require further consideration by the Commission. The report reviews existing initiatives and standards on corporate social responsibility from a human rights perspective, noting that there are gaps in understanding the nature and scope of the human rights responsibilities of business. Based on the consultative process undertaken in the compilation of the report, the High Commissioner makes conclusions and recommendations to assist the Commission in identifying options for strengthening standards on business and human rights and their implementation. . . .

 

CONTENTS

Introduction

I. THE SCOPE AND LEGAL STATUS OF EXISTING INITIATIVES AND STANDARDS

II. OUTSTANDING ISSUES

III. CONCLUSIONS AND RECOMMENDATIONS

Annexes

Annex I: Outline of the consultation process in response to Commission decision 2004/116

Annex II: Description of a selection of existing initiatives and standards on business and human rights

Annex III: Comparison of the scope and legal status of existing initiatives and standards listed in Annex II

Introduction

1. In its decision 2004/116, the Commission recommended to the Economic and Social Council that it request “the Office of the United Nations High Commissioner for Human Rights to compile a report setting out the scope and legal status of existing initiatives and standards relating to the responsibility of transnational corporations and related business enterprises with regard to human rights, inter alia, the draft norms contained in [document E/CN.4/Sub.2/2003/12/Rev.2] and, identifying outstanding issues, to consult with all relevant stakeholders in compiling the report, including States, transnational corporations, employers’ and employees’ associations, relevant international organizations and agencies, treaty monitoring bodies and non‑governmental organizations, and to submit the report to the Commission at its sixty-first session in order for it to identify options for strengthening standards on the responsibilities of transnational corporations and related business enterprises with regard to human rights and possible means of implementation”. The present report is submitted in response to that request.

2. In May 2004, the Office of the United Nations High Commissioner for Human Rights (OHCHR) began a consultation process as a first step in implementing the Commission’s decision. The consultation process took two principal forms. First, OHCHR sent requests to relevant stakeholders seeking their written responses to the issues raised in the Commission’s decision. On 19 May 2004, OHCHR sent notes verbale to all Member States. In June 2004, OHCHR sent letters to a selection of the organizations and bodies identified in the decision, namely transnational corporations, employers’ associations, employees’ associations, relevant international organizations and agencies, treaty monitoring bodies and non-governmental organizations. The present report refers to representatives of these organizations and bodies by the general term “stakeholders”.

3. OHCHR requested States and other stakeholders to supply information on three issues drawn on the Commission’s decision, namely:

(a) Existing initiatives and standards relating to the responsibility of transnational corporations and related business enterprises with regard to human rights;

(b) The scope and legal status of these initiatives and standards;

(c) Any outstanding issues.

4. In view of the fact that many other stakeholders were interested in contributing to the High Commissioner’s report, OHCHR accepted contributions from other stakeholders who forwarded information. To this end, OHCHR dedicated a web site to information on the report and the consultation process. A list of stakeholders contacted and written responses received are included in annex I. The full text of those responses is available on the OHCHR web site.

5. In addition to seeking written input into the report, OHCHR also consulted directly with stakeholders on the issues raised in the Commission’s decision. The High Commissioner and OHCHR staff met with stakeholders on their request and participated in meetings organized by them. On 22 October 2004, OHCHR held a public consultation with stakeholders in cooperation with the Global Compact Office. The consultation provided a forum for stakeholders to meet and discuss the three issues identified in the Commission’s decision. Over 50 entities participated (see the list in annex I). In cooperation with the Global Compact Office, OHCHR prepared a background document and a report on this consultation, which are available on the web site of the Global Compact Office.

6. The present report refers to the term “Responsibilities of transnational corporations and related business enterprises with regard to human rights” by the short hand term “business and human rights”. The present report uses the term “consultation process” to refer to the process of seeking and receiving written and oral submissions on the issues raised in the Commission’s decision.

I. The scope and legal status of EXISTING INITIATIVES AND STANDARDS

Existing initiatives and standards

7. Initiatives and standards relevant to corporate social responsibility have increased rapidly over the last 15 years. The consultation process alone identified over 200 existing initiatives and standards. Annex II contains a description of the initiatives and standards that stakeholders raised most frequently in the consultation process. Existing initiatives and standards can be categorized as follows:

(a) International instruments. International instruments such as treaties and declarations can be directed at States but of relevance to business - such as the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions - and directed specifically at business - such as the International Labour Organization Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and the OECD Guidelines for Multinational Enterprises;

(b) Nationally based standards. Nationally, legally based standards include constitutional provisions, national laws and national regulations of relevance to business activities. Nationally based standards can also have extraterritorial effect, such as the United States Alien Tort Claims Act;

(c) Certification schemes. Certification schemes are programmes established by an organization, group or network requiring adherence to a set of principles. Upon adherence, the scheme is generally monitored independently to ensure compliance. The Worldwide Responsible Apparel Production (WRAP) certification programme, the SA8000 certification scheme and the Kimberley Process Certification Scheme are examples;

(d) Voluntary initiatives. Voluntary initiatives include codes of conduct, directives, policies, third-party and self-reporting initiatives established by individual companies, groups of companies, intergovernmental organizations or civil society groups and adopted by business on a voluntary basis. The Secretary-General’s United Nations Global Compact provides an example of a voluntary initiative backed by the United Nations. Intergovernmental voluntary initiatives include the Voluntary Principles on Security and Human Rights for the extractive and energy sectors and the Extractive Industries Transparency Initiative. Non-governmental voluntary initiatives include the Global Sullivan Principles, the Caux Round Table Principles for Business and International Peace Operations Associations Code of Conduct. In the consultation process, individual companies - BASF, BP, Gap, Nexen, Pfizer, Rio Tinto, Shell, SONOFON, Storebrand and Telefonica - provided information on their voluntary initiatives;

(e) Mainstream financial indices. These are sets of social and environmental indices based on objective criteria against which companies are monitored as a means of changing the nature of business activities through investors and markets. Examples include the FTSE4Good Index and the Goldman Sachs Energy Environmental and Social Index;

(f) Tools, meetings and other initiatives. These initiatives seek to promote greater understanding of and respect for human rights in a variety of forms including methodologies for undertaking human rights impact assessments, management tools, training manuals, workshops, pilot projects, multi-stakeholder consultations, public-private partnerships and so on. The Business Leaders’ Initiative for Human Rights (BLIHR) and the Danish Institute for Human Rights Human Rights and Business Project provide examples in this category.

Scope and legal status

8. The widely varying existing initiatives and standards make any comparison of their scope and legal status a complex task. Nonetheless, the following criteria can be helpful to compare the scope and legal status of different initiatives and standards and make sense of the current business and human rights landscape. In relation to scope, the following criteria are relevant:

(a) Objectives. Initiatives and standards on business and human rights might seek to protect human rights, promote human rights or a mixture of the two. For example, the Secretary‑General’s Global Compact is promotional in character in that it asks companies to embrace, support and enact a set of core principles including two on human rights. Some initiatives are both promotional and protective; for example, certification schemes or the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy aim to encourage the positive contribution of business while minimizing and resolving risks and difficulties The OECD Guidelines create a system of national focal points to resolve specific issues arising in implementation;

(b) Source. The source of an initiative and standard - government, intergovernmental, business, civil society - can be relevant to determining its reach and authority. For example, initiatives and standards agreed or adopted in the context of the United Nations or ILO can carry significant authority given the international and intergovernmental character of these organizations;

(c) Human rights coverage. The level of specificity of references to human rights in initiatives and standards provides an important indication of scope from a human rights perspective. Many initiatives and standards refer to human rights in general terms; however relatively few actually set out specific human rights provisions that are relevant to the activities of business. For example, the OECD Guidelines on Multinational Enterprises refer to human rights in only broad terms, while the ILO Tripartite Declaration refers to specific workers’ rights;

(d) Territorial coverage.Territorial coverage of initiatives and standards is often difficult to ascertain but important in any consideration of the practical scope of an initiative or standard. Constitutional provisions and national law, for example, generally apply within national boundaries; however States, are increasingly considering laws of extraterritorial reach. Given the membership of ILO, the Tripartite Declaration and the Declaration on Fundamental Principles and Rights at Work have international coverage. At the same time, a voluntary initiative of a large company could have relatively wide territorial coverage if that company has activities in many countries;

(e) Company coverage. The number of companies actually and potentially subject to an initiative or standard is also a relevant consideration in determining scope. Some initiatives relate to one company, others are open to adherence by more than one company while others seek adherence within particular sectors. Thus, for example, the Voluntary Principles on Security and Human Rights for the extractive and energy sectors or the World Wide Responsible Apparel Production (WRAP) initiative have sectoral coverage, while others, such as the OECD Guidelines and the ILO Tripartite Declaration, potentially have a wide coverage of companies that go beyond any particular sector;

(f) Implementation and monitoring. Initiatives and standards apply a range of implementation or monitoring mechanisms. Some voluntary initiatives, such as the Global Compact, do not envisage monitoring as such. International instruments such as human rights treaties or the United Nations Convention against corruption envisage national monitoring, including at times through the application of sanctions. Other initiatives such as the Global Reporting Initiative employ verification methodologies such as reporting. Market mechanisms such as the FTSE4Good Index use independent measuring techniques.

9. The following criteria are relevant to understanding the legal status of initiatives:

(a) Binding on companies. Constitutions and national legislation in many States include human rights responsibilities that are binding on companies. Companies themselves might also make human rights initiatives binding through inclusion of specific terms to that effect in contracts;

(b) Binding on States. International treaties such as the principal human rights treaties are binding on States parties. While international declarations are not binding on States, they do indicate a level of commitment on behalf of the State to uphold the principles in the instrument;

(c) Non-binding. The bulk of existing initiatives on business and human rights fall within the category of non-binding.

A comparison of initiatives and standards

10. The table in annex III compares the scope and legal status of existing initiatives and standards identified in annex II. Of these, the consultation process highlighted four initiatives and standards which warrant closer comparison. These initiatives and standards are: the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy; the OECD Guidelines for Multinational Enterprises; the United Nations Global Compact; and the draft “Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights” (draft Norms) (E/CN.4/Sub.2/2003/12/Rev.2). Not only did these initiatives and standards attract considerable attention in the consultation process; their international character makes them particularly relevant to the Commission’s work in this area.

11. The OECD Guidelines are recommendations to business from the 30 OECD member States and eight adhering non-member States concerning conduct in many areas of business ethics. The recommendations cover a broad range of issues from compliance with local laws and regulations, safeguarding of consumer interests, abstaining from anti-competitive practices and meeting host country tax liabilities. A separate recommendation relates to human rights generally, asking business to “respect the human rights of those affected by their activities consistent with the host government’s international obligations and commitments”. Further, the commentary to the Guidelines stresses the relevance of the Universal Declaration of Human Rights. The Guidelines also include recommendations in relation to workers’ human rights such as: freedom of association, the right to collective bargaining, the effective abolition of child labour, the elimination of all forms of forced or compulsory labour and non-discrimination in employment and occupation. The 38 adhering States - which represent the source of most of the world’s foreign direct investment and are home to most major multinational enterprises - have committed themselves to promote these guidelines among multinational enterprises operating in or from their territories. The OECD Guidelines therefore have considerably wide territorial and company coverage, going beyond the territorial reach of the 38 adhering States.

12. While essentially promotional in character, the OECD Guidelines include a form of monitoring mechanism and so could also be considered to have a protective element. The mechanism consists of National Contact Points appointed by adhering States who are charged with promoting the Guidelines and handling enquiries in the national context. One of their responsibilities is to contribute to the resolution of issues that arise relating to the implementation of the Guidelines in specific instances.

13. In terms of legal status, the OECD Guidelines are purely voluntary recommendations to business; however adhering States are committed to promoting them. In spite of their significant reach, the OECD Guidelines are recommendations of 38 States and so do not have universal authority. In relation to implementation, the OECD reports that a recent survey asked managers of international companies to list influential international benchmarks for corporate behaviour; 22 per cent mentioned the Guidelines without prompting. The OECD Guidelines have been translated into 26 languages and over 60,000 web pages refer to them. Fifteen countries refer to the Guidelines in the context of their export credit and investment guarantee programmes. As of June 2004, National Contact Points had considered 79 specific instances of issues. Some of these dealt with company conduct in OECD countries, but most considered the conduct of multinational enterprises in non-OECD countries.

14. In comparison, the ILO Tripartite Declaration of Principles provides guidance to multinational enterprises as well as to domestic business, Governments and workers’ organizations on labour-related aspects of corporate social responsibility. It covers several areas related to workers’ human rights, namely: employment promotion; freedom of association and the right to organize; collective bargaining; equality of opportunity and treatment; security of employment; training; wages, benefits and conditions of work; and safety and health. The ILO Tripartite Declaration does not cover other areas of human rights. Given the universal nature of the ILO and its tripartite structure, the territorial and company reach of the Declaration is technically broader than that of the OECD Guidelines, although in practice, at least the company coverage of the two might in fact be more similar given the concentration of foreign direct investment in and between the States adhering to the OECD Guidelines. Importantly, the Declaration was adopted on a tripartite basis and thus has its origins in the support of Governments, employers and workers. The ILO Tripartite Declaration is voluntary for business, although the ILO conventions it refers to are binding on States parties. The near universal membership of the ILO emphasizes the international authority of its source. The ILO Tripartite Declaration is essentially promotional in character; however, the Guidelines also encourage business entities to establish voluntary conciliation procedures for the settlement and prevention of industrial disputes.

15. The United Nations Global Compact is a learning forum revolving around ten principles derived from key international instruments, focusing on human rights, labour standards, the environment and corruption. One of the Global Compact’s founding premises is that, without the private sector’s active involvement, there is the danger that universal principles will remain unimplemented. Consequently, the Global Compact seeks to underpin the global economy with universal values defined by international instruments. The first two principles of the Global Compact concern human rights. First, businesses should support and respect the protection of internationally proclaimed human rights and second, businesses should make sure that they are not complicit in human rights abuses. As an initiative of the Secretary-General, the Global Compact potentially has wide territorial coverage with local Global Compact networks in over 50 countries. The company coverage is also considerable, with over 1,700 formal participants, most of which are companies.

16. The Global Compact is purely voluntary for businesses, although the “internationally proclaimed human rights” it refers to are generally binding on States. In contrast with the OECD Guidelines and the ILO Tripartite Declaration, the Global Compact has no monitoring mechanism, relying on public accountability, transparency and the enlightened self-interest of companies, labour and civil society to initiate and share action in pursuing the ten principles. According to the Global Compact Office, a recent study undertaken on the Global Compact’s impact to date found that it had had a significant impact on corporate behaviour, especially in helping to hasten positive change.

17. While each of these initiatives and standards do include references to the promotion and protection of human rights, the treatment corresponds to the relevance of human rights in relation to the overall objectives and scope in each initiative. Thus, the ILO Tripartite Declaration specifically includes workers’ human rights, but not others, while the Global Compact refers to human rights generally without going into any specificity of which human rights are relevant. The references to “human rights” in the OECD Guidelines also lack specificity. As a result, there is still a gap in understanding what the international community expects of business when it comes to human rights.

The draft Norms

18. The draft “Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights “(draft Norms) attempt to impose direct responsibilities on business entities as a means of achieving comprehensive protection of all human rights - civil, cultural, economic, political and social - relevant to the activities of business. The draft Norms identify specific human rights relevant to the activities of business, such as the right to equal opportunity and non-discrimination, the right to security of persons, the rights of workers, and refers to the rights of particular groups such as indigenous peoples. The draft Norms also set out responsibilities of business enterprises in relation to environmental protection and consumer protection. As an initiative of a United Nations expert body, the draft seeks wide territorial coverage. It also seeks broad company coverage as appears from the reference in its title to “transnational corporations and other business enterprises”. The draft envisages a range of implementation mechanisms of both a promotional and protective character such as self-reporting and external verification. The Commission has indicated that the draft Norms contain “useful elements and ideas for consideration by the Commission” but, as a draft proposal, it has no legal standing.

19. The draft Norms is an attempt in filling the gap in understanding the expectations on business in relation to human rights. However, the consultation process revealed a wide range of opinions amongst stakeholders on the value and content of the draft. Employer groups, many States and some businesses were critical of the draft while non-governmental organizations and some States and businesses as well as individual stakeholders such as academics, lawyers and consultants were supportive.

20. The main arguments both against and in favour of the draft Norms are summarized below. The stakeholders critical of the draft Norms argued that:

(a) The draft Norms represents a major shift away from voluntary adherence by business to international human rights standards and the need for this shift has not been demonstrated;

(b) The style of the draft Norms is unduly negative towards business. The tone of the draft is unbalanced and does not adequately take into account the significant positive contributions of business towards the enjoyment of human rights;

(c) The recognition of legal obligations on business to “promote, secure the fulfilment of, respect, ensure respect of and protect human rights” is baseless and a misstatement of international law - only States have legal obligations under international human rights law;

(d) The human rights content of the draft Norms is vague and inaccurate. For example, the reference to international treaties and other instruments in the preambular paragraphs and under the definitions includes documents that are only recommendations, have low levels of ratification, are not self-executing or are not human rights instruments. Those documents are therefore not indicative of the state of international human rights law;


(e) The legal responsibilities on business identified in the draft Norms go beyond the standards applying to States. In particular, the wording of the draft Norms imposes duties on business to meet standards under treaties that a State in which a company was operating might not have ratified;

(f) The draft Norms require business to undertake balancing decisions more appropriate to the role of Governments. Some human rights require Governments to decide on the most appropriate form of implementation, balancing often competing interests. The democratic State is in a more appropriate position to make such decisions than companies;

(g) The imposition of legal responsibilities on business could shift the obligations to protect human rights from Governments to the private sector and provide a diversion for States to avoid their own responsibilities;

(h) The implementation provisions of the draft Norms are burdensome and unworkable. The vagueness of some of the provisions in the draft Norms would make it difficult for a tribunal to adjudicate any communication that came before it and the reporting requirements in the draft Norms are burdensome. The binding approach adopted in the draft Norms could also be counter-productive, drawing away from voluntary efforts and focusing on the implementation of only bare minimum standards;

(i) The draft Norms duplicate other initiatives and standards, particularly the OECD Guidelines for Multinational Enterprises and the ILO Tripartite Declaration.

21. Those stakeholders welcoming the draft Norms argued that they:

(a) Are the most comprehensive, clear and complete initiative or standard on business and human rights that goes beyond labour standards;

(b) Add to, rather than duplicate, existing initiatives and standards by attempting to identify the responsibilities of business in relation to specific human rights;

(c) Provide a common set of standards for all business in relation to human rights and a level playing field for competing companies;

(d) Provide a tool for evaluating current and future practices. The draft Norms offer a template of relevant rights and responsibilities against which companies can review and assess their activities in relation to human rights to assist them in understanding how operations can affect individuals and communities;

(e) Establish the right balance between the obligations of States and companies with regard to human rights. The draft Norms do not challenge the role of the State as primary duty bearer for human rights, but the draft does indicate that companies have secondary responsibilities with regard to human rights within their respective spheres of activity and influence;

(f) Provide a normative framework and template for action by States, assisting States in establishing national legislation by identifying specific areas where the State should regulate the activities of corporations in order to meet its obligations to protect human rights;

(g) Attempt to deal with the situation where a company is operating in a State which is unwilling or unable to protect human rights. The identification of direct international legal obligations applicable to business envisaged by the draft attempts to address a situation where the State has either failed to legislate effectively, or is unable to protect human rights in the particular situation;

(h) Address the current fatigue and mistrust amongst civil society in relation to voluntary initiatives which work for the well-intentioned and, although of significant value, do not cover all companies (many companies do not have a human rights policy). Voluntary initiatives are both inconsistent in their treatment of human rights and insufficient to mitigate comprehensively all threats to the enjoyment of human rights;

(i) Offer the possibility of a remedy to victims of human rights violations. This builds on voluntary initiatives which are not supervised by an independent body and which do not necessarily guarantee a right to a remedy in the case of clear violations.

22. While views on the document are divided, it is relevant to note that the draft Norms, having the status of a draft proposal, could be subject to review and consideration by the Commission. In this context, it is relevant to note that the Business Leaders’ Initiative on Human Rights is currently “road-testing” the draft Norms with companies from different international business sectors with the objective of demonstrating ways in which to implement human rights. Those business entities engaged in the “road-testing” are committed to understanding better the draft Norms as well as to finding methods of applying the content of the document by defining what is “essential”, “expected” and “desirable” behaviour for all companies. The process will continue until December 2006.

II. OUTSTANDING ISSUES

23. The following outline of “outstanding issues” is based on three general assumptions. The first is that business, like all actors in society, has to operate in a responsible manner, including through respecting human rights. This can be drawn from the Universal Declaration of Human Rights and also reflects the reality in many countries, where national legislation outlines the responsibilities of business with regard to human rights. Internationally, many companies participate in the United Nations Global Compact, which stipulates that those companies should support and respect internationally proclaimed human rights. Similarly, many businesses have already adopted voluntary guidelines and codes of conduct and are seeking greater clarity on how they can avoid problems and positively affect the enjoyment of human rights in their activities.

24. Second, business has an enormous potential to provide an enabling environment for the enjoyment of human rights through investment, employment creation and the stimulation of economic growth. The activities of business have also threatened human rights in some situations and individual companies have been complicit in human rights violations. The clarification of responsibilities of business with regard to human rights could help prevent human rights problems from arising, help States regulate business entities more effectively and at the same time assist in channelling the benefits of business towards the promotion of human rights.

25. Third, the broad review of existing initiatives and standards on business and human rights in the previous section indicates that there remains a gap in understanding the nature and scope of responsibilities of business with regard to human rights. While corporate social responsibility initiatives have grown rapidly over the last ten years, the human rights dimensions of those initiatives have not developed at an equal pace nor have they developed consistently. This, in turn, could lead to inconsistent practices between companies and across nations.

26. With this in mind, the following section identifies “outstanding issues” in order to assist the Commission in identifying “options for strengthening standards on the responsibilities of transnational corporations and related business enterprises with regard to human rights and possible means of implementation”, as stipulated by decision 2004/116.

What are the responsibilities of business with regard to human rights?

27. In considering the responsibilities of business with regard to human rights, it is important to reiterate that States are the primary duty bearers of human rights. While business can affect the enjoyment of human rights significantly, business plays a distinct role in society, holds different objectives, and influences human rights differently to States. The responsibilities of States cannot therefore simply be transferred to business; the responsibilities of the latter must be defined separately, in proportion to its nature and activities.

28. The Global Compact has identified responsibilities of business in connection with two principles:

(a) Principle One: Businesses should support and respect the protection of internationally proclaimed human rights;

(b) Principle Two: Businesses should make sure that they are not complicit in human rights abuses.

29. This provides a useful starting point for understanding the responsibilities of business with regard to human rights, suggesting three forms of responsibility. The first two responsibilities - to “respect” and to “support” human rights - relate to the acts and omissions of the business entity itself. The third responsibility on business entities - to “make sure they are not complicit” in human rights abuses - concerns the relationship between business entities and third parties.

30. A responsibility to “respect” human rights is comparatively unproblematic and requires business to refrain from acts that could interfere with the enjoyment of human rights. For example, a private detention centre institution should refrain from inflicting cruel, inhuman and degrading treatment on people detained.

31. More complex issues arise in relation to the responsibility to “support” human rights. For example, the responsibility to “support” human rights suggests that business entities carry positive responsibilities to promote human rights. On the one hand, business entities have a great and sometimes untapped potential to promote human rights through investment, and promotion of economic growth and the underlying conditions required for the enjoyment of human rights. A responsibility to “support” human rights could help channel this. On the other hand, accepting that business has positive responsibilities to use its influence to promote human rights could sit uneasily with the traditional discretion of States to make appropriate choices and exercise balance in designing policies to fulfil human rights. In this context, it is relevant to note that business entities already carry positive responsibilities in other areas of national law, for example in the law of negligence when discharging a duty of care to employees or local communities. This could provide guidance when clarifying the positive responsibilities on business to “support” human rights.

32. Similarly, subdividing the responsibility to “support” human rights into subcategories of responsibilities could be helpful. For example, the Committee on Economic, Social and Cultural Rights has subdivided the obligations of States parties to the International Covenant on Economic, Social and Cultural Rights into obligations to respect, protect and fulfil (promote, provide and facilitate) economic, social and cultural rights. The responsibilities to “support” human rights could therefore be clarified by considering what business could do to protect, promote, provide and facilitate human rights. These sub-responsibilities could then be classified as “essential”, “expected”, or “desirable” conduct of business entities.

33. The responsibility on business entities to “make sure they are not complicit in human rights abuses” similarly raises complex issues. Corporations often act with other partners in joint ventures or with national and local governments which could lead to allegations of complicity if the partner itself has abused human rights. One definition of “complicity” states that a company is complicit in human rights abuses if it authorizes, tolerates, or knowingly ignores human rights abuses committed by an entity associated with it, or if the company knowingly provides practical assistance or encouragement that has a substantial effect on the perpetration of human rights abuse.

34. Four situations illustrate where an allegation of complicity might arise against a company. First, when the company actively assists, directly or indirectly, in human rights violations committed by others; second, when the company is in a partnership with a Government and could reasonably foresee, or subsequently obtains knowledge, that the Government is likely to commit abuses in carrying out the agreement; third, when the company benefits from human rights violations even if it does not positively assist or cause them; and fourth, when the company is silent or inactive in the face of violations. As with the responsibility to “support” human rights, the duty on business to act or not act in each of these situations might not always be clear. Questions arise as to the extent of knowledge that the business entity had or should have had in relation to the human rights abuse and the extent to which it assisted through its acts or omissions in the abuse.

35. National and international criminal law has elaborated the doctrine of complicity as a basis for criminal liability, including criminal liability for legal persons for their complicity in crimes. The doctrine of complicity under national and international criminal law could therefore provide guidance in the further elaboration of this responsibility.

What are the boundaries of the responsibilities of business with regard to human rights?

36. In contrast to the limits on States’ human rights obligations, the boundaries of the human rights responsibilities of business are not easily defined by reference to territorial limits. While a small business might have relatively limited influence over the enjoyment of human rights within a particular country, a large company might influence the enjoyment of human rights across boundaries. Defining the boundaries of business responsibility for human rights therefore requires the consideration of other factors such as the size of the company, the relationship with its partners, the nature of its operations, and the proximity of people to its operations.

37. A helpful means to understand the scope and boundaries of the responsibilities of business is the non-legal concept of “sphere of influence”. The concept has not been defined authoritatively; however the “sphere of influence” of a business entity tends to include the individuals to whom it has a certain political, contractual, economic or geographic proximity. Every business entity, whatever its size, will have a sphere of influence; the larger it is, the larger the sphere of influence is likely to be. It is relevant to note that the Global Compact asks participating business entities “to embrace, support and enact, within their sphere of influence” its ten principles.

38. The notion of “sphere of influence” could be useful in clarifying the extent to which business entities should “support” human rights and “make sure they are not complicit in human rights abuses” by setting limits on responsibilities according to a business entity’s power to act. Importantly, “sphere of influence” could help clarify the boundaries of responsibilities of business entities in relation to other entities in the supply chain such as subsidiaries, agents, suppliers and buyers by guiding an assessment of the degree of influence that one company exerts over a partner in its contractual relationship - and therefore the extent to which it is responsible for the acts or omissions or a subsidiary or a partner down the supply chain. At the same time, “sphere of influence” should help draw the boundaries between the responsibilities of business and the obligations on States so that business entities do not take on the policing role of Government. Finally, the notion of “sphere of influence” could ensure that smaller business entities are not forced to undertake over-burdensome human rights responsibilities, but only responsibilities towards people within their limited sphere of influence.

39. The Commission might wish to consider and develop further the concept of “sphere of influence”.

In relation to which human rights does business have responsibility?

40. There are many sources of human rights that could be relevant to defining the rights for which business has responsibilities. At the global level, international human rights law provides the primary source. Importantly, the Universal Declaration of Human Rights has become a point of reference for many initiatives and standards on business and human rights. The International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights and the other main human rights treaties provide a further source. While human rights coverage is not equal across nations due to varying levels of ratification, it is important to note that all States have ratified at least one human rights treaty. Significantly, the Convention on the Rights of the Child, which recognizes all civil, cultural, economic, political and social rights in relation to children, has achieved almost universal acceptance with 191 ratifying States. Similarly, some human rights have become norms of customary international law and can therefore be considered to have universal application.

 

41. The international instruments give little guidance as to which human rights are relevant to the activities of business. In principle, the responsibility to “respect” human rights could apply to all recognized rights; business entities should therefore refrain from interfering with the enjoyment of any rights. However, to the extent that business entities have positive responsibilities to “support” human rights, the rights applicable to business are necessarily narrower than those applicable to States, given the very different nature of business and the role it plays in society. Importantly, rights that require sensitive balancing decisions in the public interest or intervention by a public authority would be outside the scope of business responsibilities. For example, some rights such as the rights relating to criminal trials, the right to asylum and political rights are wholly within the public functions of the State and therefore less directly relevant to business.

42. A non-exhaustive list of human rights more relevant to business could include: the prohibition of discrimination, the right to life, liberty and security of the person, freedom from torture, the right to privacy, freedom of opinion and expression, the right to seek, receive and impart information, freedom of association, the right to organize, the prohibition of bonded or forced labour, the prohibition of forms of child labour, the right to health, the right to an adequate standard of living and the right to education. Similarly, the rights of certain groups of people particularly affected by the activities of business are relevant - such as the rights of women, children, employees, indigenous peoples and migrant workers and their families.

How can the responsibilities of business with regard to human rights be guaranteed?

43. Ensuring that business respects human rights is first a matter of State action at the domestic level. States have undertaken international obligations to respect the rights of individuals and groups of individuals and to protect those rights against the actions of third parties; those third parties include business entities. Many countries have introduced human rights implementing legislation that regulates business entities in areas such as discrimination and workers’ human rights. Courts and quasi-judicial tribunals enforce these laws.

44. Companies also have an important role to play in ensuring that they protect human rights standards in their own operations. Voluntary initiatives on business and human rights can help to promote a culture of respect for human rights from within the company and can give human rights standards practical meaning while motivating positive change in support of human rights. Companies can also promote human rights in their relationships with business partners through the inclusion of contractual terms stipulating respect for human rights as part of a business deal. Similarly, markets mechanisms have a role to play in ensuring respect for human rights through the use of environmental and social indices and public reporting on social responsibility which rates the performance of business entities, which in turn can affect market confidence and motivate better performance.

45. Nonetheless, company and market initiatives have their limits and are not necessarily comprehensive in their coverage nor a substitute for legislative action. Importantly, while voluntary business action in relation to human rights works for the well-intentioned and could effectively raise the standard of other companies, there remains scepticism amongst sectors of civil society as to their overall effectiveness.

46. There is also a question of how to ensure respect for human rights in situations where effective governance or accountability are absent because the State is unwilling or unable to protect human rights - for example due to a lack of control over its territories, weak judiciary, lack of political will or corruption. A lack of appropriate regulation and enforcement by the State could fail to check human rights abuses adequately while also encourage a climate of impunity. A particularly complex issue involves the regulation of companies headquartered in one country, operating in a second and having assets in a third. There is concern that business entities might evade the jurisdictional power of States in some situations, which could lead to negative consequences for the enjoyment of human rights.

47. Increasing attention is being given to whether and to what extent parent companies should be subject to the law and jurisdiction of their home countries in relation to their operations abroad. The United States Alien Tort Claims Act provides one example of a home country measure which gives courts power to hear civil claims by foreign citizens for injuries caused by actions in violation of the law of nations or a treaty of the United States although other examples also exist. Subjecting parent companies to their home jurisdiction for alleged human rights abuses against claimants of the host country raises questions of respect for the national sovereignty of the host country while also highlighting several complex legal questions which require further examination. Nonetheless, home country regulation could provide an effective means of protecting human rights in situations where accountability gaps exist.

48. The Commission might wish to study and analyse in greater depth the protection of human rights in situations where a host State is unwilling or unable to protect human rights, including studying the opportunities offered by home country regulation.

Is there a need for a United Nations statement of universal standards setting out the responsibilities of business entities with regard to human rights?

49. The Commission has charged itself with identifying options for the strengthening of standards on business and human rights. In this context, there appears to be a growing interest in discussing further the development of a United Nations statement of universal standards on business and human rights. Issues the Commission might wish to examine in this regard include:

(a) Whether such a statement could help to clarify the current gap in understanding of human rights responsibilities of business and could provide a means to build upon the two human rights principles contained in the United Nations Global Compact - in particular, by giving greater clarity to the positive steps business could take to “support” human rights;

(b) Whether the international nature of a United Nations statement could assist business in creating a level playing field by identifying the standards that all business should respect;

(c) Whether a United Nations statement could assist business, States and civil society to navigate the human rights dimensions of the corporate social responsibility framework;

(d) Whether a United Nations statement might also be helpful in the development of tools to assist business to promote human rights, by providing an authoritative text to explain human rights responsibilities and to develop indicators, human rights assessment methodologies and other materials;

(e) Whether a United Nations statement might assist national Governments in developing or strengthening national standards for business conduct as it affects human rights;

(f) Whether a United Nations statement could assist treaty bodies in the process of constructive dialogue with States parties to human rights treaties by identifying with clarity the requirements on States to protect human rights from the actions of third parties.

What would the legal nature of those responsibilities be?

50. International human rights law generally imposes obligations on States, although some exceptions do exist, for example, in relation to armed groups. States parties to human rights treaties have the obligation to protect individuals and groups of individuals from the actions of third parties, including business entities. The process of elaborating a statement of universal standards on business and human rights would raise the question of the legal status of that text and whether it would impose direct legal obligations on business with regard to human rights. The Commission might wish to consider further the effect of imposing direct legal obligations on business entities under international human rights law and how such obligations might be monitored.

What tools are needed to promote respect for human rights within the activities of business?

51. In its decision 2004/116, the Commission also envisages further work on the question of implementation of standards. The consultation process identified a number of areas where further work was needed. These included the development of human rights impact assessment methodologies to assist businesses to assess the real and potential impact of operations on the enjoyment of human rights; the elaboration of training materials to assist business entities in supporting human rights within operations; compilations of best business and State practices in the field of business and human rights; the introduction and strengthening of technical assistance to States in the area of business and human rights, including judicial training, assistance in establishing national regulatory authorities and help in drafting legislation and other regulations.

CONCLUSIONS AND RECOMMENDATIONS

52. The consultative process undertaken in the preparation of this report has marked a further step in a continuing dialogue between States and different stakeholders on the question of business and human rights. In light of this process, the High Commissioner formulates the following conclusions and recommendations to help progress this dialogue and assist the Commission “to identify options for the strengthening of standards on the responsibilities of transnational corporations and related business enterprises with regard to human rights and possible means of implementation”. In doing so, the High Commissioner underlines not only the importance of this issue to the Commission’s agenda but also the need for the Commission to act expeditiously to build upon the significant momentum that currently exists to define and clarify the human rights responsibilities of business entities. Defining and clarifying these responsibilities will provide a significant basis to promote dialogue and to resolve the many challenges that stakeholders face in the area of business and human rights.

(a) On the basis of the review of existing initiatives and standards, there are gaps in understanding the human rights responsibilities of business with regard to human rights.

(b) There is a growing interest in discussing further the possibility of establishing a United Nations statement of universal human rights standards applicable to business.

(c) The present consultation process should be seen as a beginning and there is a need, through the Commission, for continued dialogue and consultation among all stakeholders on the question of business and human rights. In this context, there is a particular need to consider ways to include more effectively the views and opinions of States and stakeholders from developing countries.

(d) Much of the consultation process focused on the draft “Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights”. In spite of opinions on the draft still being divided, there is merit in identifying more closely the “useful elements” of the draft Norms noted by the Commission in its decision 2004/116. In particular, the “road-testing” of the draft Norms by the Business Leaders’ Initiative on Human Rights could provide greater insight into the practical nature of the human rights responsibilities of business. Such an initiative deserves encouragement. The High Commissioner therefore recommends to the Commission to maintain the draft Norms among existing initiatives and standards on business and human rights, with a view to their further consideration.

(e) Many of the issues identified in the present report require separate study. The principal issues that would benefit from further clarification and research include the concepts of “sphere of influence” and “complicity”; the nature of positive responsibilities on business to “support” human rights; the human rights responsibilities of business in relation to their subsidiaries and supply chain; questions relating to jurisdiction and protection of human rights in situations where a State is unwilling or unable to protect human rights; sector specific studies identifying the different challenges faced by business from sector to sector; and situation specific studies, including the protection of human rights in conflict zones.

(f) There is a significant need to develop “tools” to assist businesses in implementing their responsibilities, in particular through the development of training materials and of methodologies for undertaking human rights impact assessments of current and future business activities.


Annex I

OUTLINE OF THE CONSULTATION PROCESS IN RESPONSE TO COMMISSION DECISION 2004/116
STATES AND STAKEHOLDERS CONTACTED FOR INPUT INTO THE REPORT

States

All members and observer States of the Commission.

Transnational corporations

ABB, Agricula Chapi, Alcan, Ashanti Goldfields, BASF, British Petroleum, Eskom, Felipe Rodriguez, Gap, Hewlett Packard, Junyao Group, Li & Fung, Oil and Natural Gas Corporation, Newmont Mining, Nexen, Nissan, Novartis, Novo Nordisk, Novozymes, Petrobras, Pfizer, Ricoh, Rio Tinto, Sasol, Shell, Sonofon, Suez, Tata Iron & Steel, Telefonica, Talal Abu‑Ghazaleh Organization, Titan Cement, Unilever, Westpac.

Employer associations

The International Chamber of Commerce, the International Organization of Employers, the United States Council for International Business, the World Business Council for Sustainable Development.

Employee associations

International Confederation of Free Trade Unions, World Confederation of Labour.

Intergovernmental organizations and United Nations organizations and bodies

The Global Compact Office, International Committee of the Red Cross, International Finance Corporation, International Labour Office, International Monetary Fund, Organization for Economic Cooperation and Development, United Nations Conference on Trade and Development, United Nations Development Programme, United Nations Environment Programme, United Nations Industrial Development Organization, United Nations Research Institute for Social Development, World Bank.

Non-governmental organizations

Action Aid, American Association of Jurists, Amnesty International, Business and Human Rights Resource Centre, Business for Social Responsibility, Christian Aid, Center for Economic and Social Rights, Centre for Housing Rights and Evictions, Centre for Research on Multinational Corporations (SOMO), CSR Europe, Ethical Globalization Initiative, Danish Institute for Human Rights, Europe-Third World Centre, FIAN International, Friedrich Ebert Stiftung, Global Reporting Initiative, Henri Dunant Centre for Humanitarian Dialogue, Human Rights Advocates, Human Rights Watch, International Baby Food Action Network, International Restructuring and Education Network Europe, Organisation Mondiale Contre la Torture, Oxfam, Peoples’ Movement for Human Rights Education, The Prince of Wales Business Leaders’ Forum, Save the Children, Transparency International, World Economic Forum.

Treaty bodies

The Committee against Torture, the Committee on Economic, Social and Cultural Rights, the Committee on the Elimination of Discrimination against Women, the Committee on the Elimination of Racial Discrimination, the Committee on the Protection of the Rights of All Migrant Workers and Members of their Families, the Committee on the Rights of the Child, the Human Rights Committee.

131 The California Supreme Court recently upheld the right of consumers to sue a large corporation under the California state deceptive advertising laws for false statements regarding labor practices and working conditions in factories. See Kasky v. Nike, 27 Cal.4th 939, 45 P.3d 243 (2002), cert. granted 534 U.S. 3458 (2003), cert. dismissed as improvidently granted.

132 For example, the Norms as a restatement of international legal principles applicable to companies could be used to interpret the human rights violations that fall under the Alien Tort Claims Act (ATCA), 28 U.S.C. ' 1350 (1993). Actions under the ATCA have been brought against several large multinational corporations. See Wiwa v. Royal Dutch Petroleum, 2002 US Dist. LEXIS 3293 (S.D.N.Y. Feb. 2, 2002); Abdullahi v. Pfizer, 2002 US Dist. LEXIS 17436 (S.D.N.Y. 2002); Doe/Roe v. Unocal, Case Nos. 00-56603, 00-57197 (9th Cir. 2002); Sarei v. Rio Tinto PLC, 221 F. Supp. 2d 1116 (C.D. Cal. 2001); Bano v. Union Carbide Corp., 273 F.3d 120 (2d Cir.2001); Bowoto v. Chevron, Case No.C99-2506 CAL (N.D. Cal 1999); Doe v. Gap, Civ 99-329 (filed C.D. Cal., Jan.13, 1999).

* The annexes to the present report are circulated in the language of submission only.

** This report has been submitted late in order to include the most up-to-date information available.

 

 

END NOTES FOR U.N. HIGH COMMISSIONER’S REPORT

http://www.ohchr.org/english/issues/globalization/business/reportbusiness.htm.

http://www.unglobalcompact.org/Portal/Default.asp.

For a complete review of existing initiatives and standards on business and human rights see R. Mares, (ed), Business and Human Rights: A compilation of documents, The Raoul Wallenberg Institute Human Rights Library, vol. 13 (Martinus Nijhoff Publishers, Leiden, 2004).

The eight countries are: Argentina, Brazil, Chile, Estonia, Israel, Latvia, Lithuania and Slovenia.

For example, see the preamble which proclaims the Declaration “ as a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance, both among the peoples of Member States themselves and among the peoples of territories under their jurisdiction”.

The constitutions of some countries stipulate direct responsibility for legal persons to respect human rights. For example, the Constitution of South Africa (1996) provides in section 8 (2) that: “A provision of the Bill of Rights binds a natural or a juristic person if, and to the extent that, it is applicable, taking into account the nature of the right and the nature of any duty imposed by the right”.

The Secretary-General has noted that “individuals and companies take advantage of, maintain and have even initiated armed conflicts in order to plunder destabilized countries to enrich themselves, with devastating consequences for civilian populations” (S/2002/1300, para. 58).

Anthony Ewing, suggests the following examples of responsibilities to “support” human rights: (1) not to interfere with or oppose government efforts to protect human rights; (2) to initiate stakeholder dialogues and communicate openly with human rights organizations; (3) to become human rights advocates; (4) to educate employees and other stakeholders in human rights; and, (5) to build capacity of governments and others effectively to respect, ensure and promote human rights. “Understanding the Global Compact Human Rights Principles” in Embedding Human Rights in Business Practice, joint publication of the United Nations Global Compact and the Office of the United Nations High Commissioner for Human Rights, 2004, at p. 38.

“The Global Compact and Human Rights: Understanding Sphere of Influence and Complicity: OHCHR Briefing Paper”, in UN Global Compact/OHCHR, ibid, p. 19.

International Council on Human Rights Policy, Beyond Voluntarism: Human rights and the developing international legal obligations of companies, (Geneva, February 2002), pp. 125-136.

Under international criminal law, three elements must be met to show complicity: first, a crime must have been committed; second, the accomplice must contribute in a direct and substantial way to the crime; and, third, the accomplice must have had intent or knowledge or was reckless with regard to the commission of the crime. See International Peace Academy and Fafo AIS, Business and International Crimes: Assessing the Liability of Business Entities for Grave Violations of International Law, September 2004, p. 23 ( http://www.fafo.no/liabilities/index.htm).

International Council on Human Rights Policy, op. cit., p. 136.

For example, a claim against a parent company for acts allegedly committed by a subsidiary or agent raises complex legal questions of the extent to which a parent company can be held liable for the action of its subsidiaries - particularly where the subsidiary is not subject to the laws of the home country. Legal systems generally protect parent companies - as well as company directors and individual shareholders - from liability resulting from the acts or omissions of subsidiaries. The establishment of liability of the parent company requires “piercing the corporate veil” by demonstrating a sufficiently substantial connection between the parent company and its subsidiary. This generally requires some degree of regular control by the parent company and knowledge of events and decisions of the subsidiary. See International Peace Academy and Fafo AIS, op. cit., p. 26. See also D. Kinley, and Tadaki, “From Talk to Walk: The Emergence of Human Rights Responsibilities for Corporations at International Law”, Virginia Journal of International Law, Vol. 44, No. 4, p. 962, which notes that it would appear that at least a substantial degree of operational or day-to-day control would be necessary for a business entity to attract liability for the acts of one its subsidiaries, agents, buyers or suppliers.

For example, the International Law Commission has recognized the prohibition of discrimination on the basis of race as part of customary international law. See the report of the International Law Commission on its fifty-third session, Official Records of the General Assembly, Fifty-sixth Session, Supplement No. 10 (A/56/10), p. 208. General comments No. 24 (1994) and No. 29 (2001) of the Human Rights Committee also provide some guidance on identifying customary norms.

International human rights instruments recognize some specific rights over which non-state actors do have some secondary and indirect responsibility. For example, the Convention on the Elimination of All Forms of Discrimination against Women requires States parties to take all appropriate measures to eliminate discrimination against women by any person, organization or enterprise (art. 2). Similarly, the Convention on the Rights of the Child requires the best interest of the child to be a primary consideration in all actions concerning children, including by private welfare institutions (art 3, para. 1).

See e.g., D. Kinley, and Tadaki, op. cit., pp. 966-993. See also International Council on Human Rights Policy, op. cit., pp. 21-43.

  • For example, a tribunal must establish that it has the jurisdiction to hear the case. The court must satisfy that there are grounds for hearing the case - for example, the alleged abuse occurred in the country, the courts have the authority to hear claims concerning the actions of their nationals abroad, questions of national security are at stake and so on. Similarly, the court must decide that it is the appropriate forum to hear the case. The principle of forum non conveniens gives courts discretion to refuse to hear a case where the court holds the opinion that, in the interests of all the parties and of justice, it may be more appropriately heard in another forum. The court might decide that the case should be tried in the courts of the country where the alleged abuse occurred. See e.g., International Peace Academy and Fafo AIS, op. cit., p. 27.
  • For example, the Optional Protocol to the Convention on the Rights of the Child on the involvement of children in armed conflicts recognizes that “ Armed groups that are distinct from the armed forces of a State should not, under any circumstances, recruit or use in hostilities persons under the age of 18 years ” (art. 4, para. 1).

    STATES AND STAKEHOLDERS PROVIDING INPUTS INTO THE REPORT

    States

    Australia, Austria, Belgium, Canada, Croatia, Cuba, Czech Republic, Denmark, Finland, Germany, Greece, Hungary, Italy, Lithuania, Luxembourg, Mauritius, Netherlands, Norway, Philippines, Poland, Portugal, Sweden, Switzerland, Syrian Arab Republic, United Kingdom of Great Britain and Northern Ireland, United States of America.

    Transnational corporations

    BASF, British Petroleum, Business Leaders’ Initiative on Human Rights (ABB Ltd, Barclays plc, Hewlett-Packard Company, National Grid Transco plc, Novartis Foundation for Sustainable Development, Novo Nordisk A/S, MTV Networks Europe, Statoil and the Body Shop International plc), Gap, Newmont, Nexen, Pfizer, Rio Tinto, Sasol, Shell, Sonofon, Storebrand, Telefonica.

    Employer associations

    Bundesverband der Deutschen Industrie, Business and Industry Advisory Committee to the OECD, Confederation of British Industry, Confederation of Danish Industry, International Chamber of Commerce, International Organization of Employers, Netherland’s Industry, United States Council for International Business.

    Treaty bodies

    The Committee on the Rights of the Child, The Committee on the Protection of the Rights of All Migrant Workers and Members of their Families.

    Non-governmental organizations

    Action Aid, Amnesty International, Australian Human Rights Centre, Berne Declaration, Business and Human Rights Resource Centre, CAFOD, Castan Centre, CEDHA, Christian Aid, Dutch Round Table on Business and Human Rights, ESCR-net (joint submission), Europe Third World Centre (joint submission), FIDH, Geneva Social Observatory, German Clean Clothes Campaign, Greenpeace, Human Rights First, Human Rights Watch, Humanistish Overleg Mensenrechten, Infact, Interfaith Center on Corporate Responsibility, International Baby Food Action Network, International Commission of Jurists, International Peace Academy/FAFO, Misereor (joint submission), Mineral Policy Institute (joint submission), Oxfam.

    Other stakeholders

    Business for Social Responsibility, Caux Round Table, Sir Geoffrey Chandler, Columbia University Law School Human Rights Clinic, Danish Institute for Human Rights, Ms. Surya Deva, Ethical Funds, François-Xavier Bagnoud Center for Health and Human Rights (Harvard School of Public Health), Mr. Francis House, International Business Leaders’ Forum, Mr. Menno Kamminga, King Zollinger, Lawhouse, Mr. John O’Reilly, SustainAbility, TwentyFifty.

    STAKEHOLDERS ATTENDING THE OHCHR/GLOBAL COMPACT CONSULTATION ON 22 OCTOBER 2004

    Experts

    Mr. Aron Cramer, Mr. Andrew Clapham, Mr. Klaus Leisinger.

    Transnational corporations

    ABB, ABN Amro, Alcan, BASF, Credit Suisse, Eni, Norsk Hydro, Novo Nordisk, Pfizer, Rio Tinto, Novartis Foundation for Sustainable Development.

    Employer associations

    International Organization of Employers, Confederation of British Industry.

    Employee associations

    International Confederation of Free Trade Unions, International Federation of Chemical Energy, Mine and General Workers.

    Intergovernmental organizations and United Nations organizations and bodies

    Global Compact Office, International Committee of the Red Cross, United Nations Conference on Trade and Development, United Nations Children’s Fund, United Nations Research Institute for Social Development, United Nations System Staff College.

    National human rights institution

    Danish Institute for Human Rights.

    Non-governmental organizations, consultancies and other organizations

    Amnesty International, Berne Declaration, Business and Human Rights Resource Centre, Earth Justice, Europe Third World Centre, Franciscans International, Geneva Social Observatory, Global Reporting Initiative, Greenpeace, Human Rights Watch, INFACT, International Bar Association, International Business Leaders’ Forum, International Commission of Jurists, International Council on Human Rights Policy, International Service for Human Rights, KLD Research and Analytics, Kroc Institute, Lawhouse, Norwegian Forum for Development, Respect Europe, Rights and Accountability in Development, SustainAbility Ltd, 3D-Trade-Human Rights-Equitable Economy, Misereor.

    Independent

    Mr. Bjorn Kümmel, Mr. Chip Pitts, Ms. Dorothée Baumann (University of Zurich), Mr. John O’Reilly.

    Annex II

    DESCRIPTION OF A SELECTION OF EXISTING INITIATIVES AND STANDARDS ON BUSINESS AND HUMAN RIGHTS

    Of the many existing initiatives and standards on business and human rights, the following list identifies those mentioned most prominently in the consultations.

    The ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. The Tripartite Declaration, adopted in 1977 by Governments, employer associations and employee associations, provides guidance to multinational enterprises as well as to domestic business, Governments and workers’ organizations in areas such as employment, training, conditions of work and industrial relations. The interdependent aims of the Tripartite Declaration are, on the one hand, to encourage the positive contribution that investment by multinational enterprises can make to economic and social progress, and on the other hand, to minimize and resolve the difficulties to which such investment may give rise.

    The Global Compact. The Global Compact is the voluntary corporate citizenship initiative of the United Nations Secretary-General that brings together companies, labour, United Nations agencies and civil society to support ten principles derived from key international instruments including the Universal Declaration of Human Rights. The first two principles of the 10 Global Compact Principles concern human rights. The Global Compact is a multi-stakeholder network with over 1,700 formal participants. The Global Compact was conceived as a way to help bring about a more sustainable and inclusive global economy, by underpinning it with universal values that Governments have defined through international agreements.

    The OECD Guidelines for Multinational Enterprises. The Guidelines are a government-backed set of voluntary guidelines for international business covering a broad range of issues ranging from human rights, core labour standards, fighting corruption, consumer protection and environmental protection to compliance with local laws and regulations, abstaining from anti-competitive practices and meeting host country tax liabilities. While observance of the Guidelines is voluntary for business, adhering Governments are committed to promoting them among multinational enterprises operating in or from their territories. 38 Governments - the 30 members of the OECD and eight non-members (Argentina, Brazil, Chile, Estonia, Israel, Latvia, Lithuania and Slovenia) - have adhered to them. The Guidelines were last revised in 2000.

    The draft “Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights”. The draft Norms are a set of human rights, environmental and consumer protection responsibilities of business approved by the Sub‑Commission on the Promotion and Protection of Human Rights in 2003. The draft includes provisions on the right to equal opportunity and non-discrimination, the right to security of persons, the rights of workers and respect for national sovereignty and human rights and seeks to hold business directly accountable in relation to human rights standards.

    Business Leaders’ Initiative for Human Rights (BLIHR ). BLIHR brings together ten companies (ABB, Barclays plc, Gap, Hewlett-Packard Company, National Grid Transco plc, Novartis, Novo Nordisk, MTV Networks Europe, Statoil and the Body Shop International plc) for a three-year period beginning in May 2003 to explore the ways that human rights standards and principles can inform issues of corporate responsibility and corporate governance. During the first year of the initiative, BLIHR worked together in collaboration with leading human rights and corporate responsibility experts and organizations to examine a range of relevant standards and initiatives, with a particular focus on the draft Norms described above.

    The ILO Declaration on Fundamental Principles and Rights at Work. Adopted in 1998, the ILO Declaration is addressed to all ILO member States, irrespective of whether they have ratified the core ILO conventions. Its four principle areas of application are freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labour, the abolition of child labour and the elimination of discrimination in respect of employment and occupation. Although addressed to States, the ILO Declaration has implications for the activities of business.

    Voluntary Principles on Security and Human Rights for the Extractive and Energy Sectors. The Governments of the United States and the United Kingdom, companies in the extractive and energy sectors and non-governmental organizations developed a set of voluntary principles to provide practical guidance to strengthen human rights safeguards in company security arrangements in the extractive sector. The Voluntary Principles are the basis of a global standard for the extractive sector and address three areas of mutual concern to both companies and civil society, namely: engagement with private security; engagement with public security; and risk assessment supporting security arrangements consistent with human rights. While the Voluntary Principles are essentially voluntary, they have also been annexed to contracts and can therefore also potentially become legally enforceable.

    OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Adopted in 1997, the OECD Convention on Combating Bribery seeks to combat the “widespread phenomenon” of bribery in international business transactions. The Convention requires each State party to establish measures making the bribery of a foreign official in international business transactions a criminal offence and requires the imposition of sanctions on natural and legal persons in the case of bribery. The Convention envisages prosecution of nationals of States parties for acts of bribery committed abroad where this is possible under national law. The Convention however does not specifically refer to human rights.

    The United Nations Convention against Corruption. Adopted in 2003, the Convention seeks amongst other objectives to promote and strengthen measures to prevent and combat corruption more efficiently and effectively and includes requirements that States, consistent with its legal principles, establish liability of legal persons. The Convention does not specifically refer to human rights.

    Worldwide Responsible Apparel Production (WRAP). WRAP is a certification programme, requiring manufacturers to comply with 12 universally accepted principles including principles, relating to compliance with laws and workplace relations; the prohibition of forced labour; prohibition of harassment and abuse; compensation and benefits; hours of work; prohibition of discrimination; health and safety; freedom of association and collective bargaining; environment; customs’ compliance and security. The programme’s objective is to monitor independently and certify compliance with these socially responsible global standards for manufacturing and ensure that sewn products are produced under lawful, humane and ethical conditions. Participating companies voluntarily agree that their production and that of their contractors will be certified by the WRAP certification programme as complying with these standards. 19 worldwide apparel associations participate in the scheme, which they promote among their members.

    SA8000. Social Accountability International, a non-profit organization based in the United States, established the SA8000 certification scheme in 1999 as a way for retailers, brand companies, suppliers and other organizations to maintain just and decent working conditions throughout the supply chain. SA8000 is based on international workplace norms derived from ILO Conventions, the Universal Declaration of Human Rights and the Convention on the Rights of the Child, and includes standards on child labour, forced labour, workplace health and safety, freedom of association and collective bargaining, non-discrimination, discipline, working hours, compensation, and management systems. Companies focused on production can seek certification under SA8000 while companies involved in selling goods or a combination of production and selling can join the SAI corporate involvement programme that helps companies implement the standards and report on adherence.

    Kimberley Process Certification Scheme. In 2002, 36 States and the European Union, representing countries that mine, trade and cut rough diamonds, formally adopted the Kimberley Process Certification Scheme with the ultimate aim of putting an end to trade in conflict diamonds. A declaration outlines all the steps that Governments should take to ensure certification of diamonds under the scheme. Steps include the creation of systems of internal control - including penalties for violations - to prevent conflict diamonds entering shipments of rough cut diamonds. The signatory Governments have also undertaken to monitor effectively diamond trade in order to detect and prevent trade in conflict diamonds. The Kimberley Process is ongoing and participating Governments rotate the chairpersonship of the process on an annual basis.

    The Global Sullivan Principles. The Global Sullivan Principles were developed as a voluntary code of conduct for companies doing business in apartheid - South Africa. The Principles aim to have companies and organizations of all sizes, in widely disparate industries and cultures, working toward the common goals of human rights, social justice and economic opportunity. Each endorser of the Principles makes a commitment to work towards the goals of the Principles, including through the implementation of internal policies, procedures, training and reporting structures. Endorsing companies and organizations are asked to take part in an annual reporting process to document and share their experiences in relation to implementation of the Principles.

    Global Reporting Initiative (GRI). GRI started in 1997 as a multi-stakeholder process and independent institution to develop and disseminate a globally applicable framework for reporting an organization’s sustainability performance. The framework presents reporting principles and specific content indicators to guide the preparation of organization-level sustainability reports. The framework of principles and guidelines is for voluntary use by organizations for reporting on the economic, environmental, and social dimensions of their activities, products, and services. GRI is an official collaborating centre of UNEP and works in cooperation with the Global Compact.

    Fair Labor Association. The Fair Labor Association (FLA) is a non-profit organization combining the efforts of industry and civil society to promote adherence to international labour standards and to improve working conditions worldwide. FLA endorses an industry-wide code of conduct based on ILO labour standards and holds participating companies accountable for the conditions under which their products are produced through an independent monitoring system. There are currently 12 leading brand name companies participating in FLA.

    The Extractive Industry Transparency Initiative. In 2002, the United Kingdom Government announced the Extractive Industries Transparency Initiative at the World Summit on Sustainable Development in Johannesburg. The initiative aims to increase transparency over payments by companies to governments and Government-linked entities, as well as transparency over revenues by those host country Governments through voluntary reporting submitted to an independent third party. The initiative is multi-stakeholder and seeks the involvement of small, medium and multinational businesses, industry groups, intergovernmental and non-governmental organizations as well as host and home country Governments.

    Caux Round Table Principles for Business. Designed in 1994 by a network of business leaders, the Caux Round Table Principles aim to express a standard to measure business behaviour through the identification of shared values and the reconciliation of differing values. The Principles set out responsibilities of business in relation to a range of issues including respect for the environment, avoidance of illicit operations and respect for customers, employees, investors, suppliers, competitors and communities. The Principles identify the responsibility of business to respect human rights and democratic institutions and promote them wherever possible. The Caux Round Table promotes the Principles through a range of networks that includes employer associations, civil society and the Global Compact Office.

    International Peace Operations Code of Conduct. The International Peace Operations Association (IPOA) is a non-profit organization of private sector service companies, non‑governmental organizations and individuals engaged in international peace operations around the world that aims to help international peace operations succeed by utilizing the capabilities of the private sector. IPOA approved its revised Code of Conduct in 2004. Through the Code of Conduct, IPOA members pledge to adhere to principles of human rights, transparency, accountability and ethical conduct at levels that go beyond strict legal requirements.

    The Danish Institute for Human Rights (DIHR)Human Rights and Business Project. Since 1999, the Human Rights and Business Project of DIHR, in joint sponsorship with the Confederation of Danish Industries and the Industrial Fund for Developing Countries, has focused on clarifying the responsibility of business in relation to human rights through the development of concrete tools which can be used by companies to evaluate their human rights performance. DIHR has focused in particular on the development of the Human Rights Compliance Assessment tool - a diagnostic test, consisting of individual indicators which companies run to ensure that their practices remain compliant with human rights.

    FTSE4Good Index. FTSE Group, an independent company whose sole business is the creation and management of indices and associated data services, has developed the FTSE4Good index series to measure the performance of companies that meet globally recognized corporate responsibility standards and to facilitate investment in those companies. For inclusion in the company assessment process, a company must meet criteria requirements in three areas: working towards environmental sustainability; developing positive relationships with stakeholders; and upholding and supporting universal human rights.

    Goldman Sachs Energy Environmental and Social Index. Goldman Sachs, a global investment banking, securities and investment management firm, has developed an environmental and social index for the oil and gas industry to identify specific environmental and social issues likely to be material for company competitiveness and reputation. The index relies on 30 criteria over 8 categories, namely: climate change; pollution; human rights; management diversity and incentives; investment in the future; workforce; safety; and transparency and vision. Goldman Sachs published its first index in 2004.

    The United States Alien Torts Claims Act. This Act empowers United States courts to hear civil claims of foreign citizens for injuries by actions in violation of the law of nations or a treaty to which the United States is party.

    Individual corporate codes of conduct, statements, principles and policies. Some businesses establish their own principles and standards on human rights and related issues to which they adhere voluntarily. The following companies provided information in the consultation process on such initiatives: BASF, BP, GAP, Nexen, Prizer, Rio Tinto, Shell General Business Principles, SONOFON, Storebrand and Telefonica.


    Annex III

    Comparison of the scope and legal status of existing initiatives and standards listed in annex II

     

    Description

    Objectives

    Source

    Human rights coverage

    Territorial coverage

    Company coverage

    Implementation/
    monitoring

    Legal status

    ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy

    International instrument directed at States and business

    Promotion and protection

    ILO member States and associated employer and employee associations

    Workers’ human rights recognized in ILO instruments

    International

    Multinational enterprises

    Conventions listed are subject to ILO supervisory mechanisms

    Non-binding (Conventions included are binding on States parties)

    Global Compact

    Voluntary initiative

    Promotion

    United Nations Secretary-General

    General reference to human rights

    Not defined

    1,700 participants to date - mostly business enterprises

    None

    Non-binding

    OECD Guidelines for Multinational Enterprises

    International instrument directed at States and business

    Promotion and protection

    OECD member States and 8 adhering States

    General references plus specific workers’ rights

    OECD member States and the 8 adhering States

    Multinational enterprises headquarter in OECD countries

    National contact points to resolve specific instances

    Non-binding but commitment by adhering States to promote

    Draft “Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights”

    Draft international instrument directed at States and business

    Promotion and protection

    Sub-Commission on the Promotion and Protection of Human Rights

    General and specific references to a wide range of rights

    International coverage envisaged

    Transnational corporations and other business enterprises

    National and international monitoring, verification and enforcement

    As a draft proposal, they have no legal standing

    Business Leaders’ Initiative for Human Rights

    Tools

    Promotion

    10 companies and civil society

    General/ specific references drawn from the draft Norms

    Not defined

    10 companies

    Results of project expected in 2006

    Non-binding


     


    Annex III ( continued)

     

    Description

    Objectives

    Source

    Human rights coverage

    Territorial coverage

    Company coverage

    Implementation/

    monitoring

    Legal status

    ILO Declaration on Fundamental Principles and Rights at Work

    International instrument directed at States of relevance to business

    Promotion and protection

    ILO member States

    Freedom of association, the elimination of forced labour and child labour and discrimination in the workplace

    International

    Indirect coverage of potentially wide pool of business

    Rights referred to are subject to ILO supervisory mechanisms as well as Global Report

    Non-binding

    Voluntary Principles on Security and HR for the Extractive and Energy Sectors

    Voluntary initiative

    Promotion

    UK and US Governments plus companies in extractive and energy sectors and NGOs

    General references to human rights

    Not defined

    Extractive and energy sectors

    Encourages risk assessment and investigation by companies

    Non-binding

    OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

    International instrument directed at States of relevance to business

    Promotion and protection

    OECD member States

    No references to human rights

    OECD Member States

    Bribery by legal persons envisaged as an offence

    Monitoring in framework of the OECD working group on bribery in international business transactions

    Binding on States parties

    Convention against Corruption

    International instrument directed at States of relevance to business

    Promotion and protection

    United Nations member States

    No references to human rights

    International

    Corruption in the private sector

    National enforcement

    Binding on States parties

    Worldwide Responsible Apparel Production (WRAP)

    Certification scheme

    Promotion and protection

    Independent

    Workers’ human rights

    Undefined (focus on countries with apparel production)

    Apparel sector

    Certification scheme

    Non-binding

    SA 8000

    Certification scheme

    Promotion and protection

    Independent

    Workers’ human rights, children’s human rights

    Undefined

    Retailers, brand companies, suppliers and others

    Certification scheme

    Non-binding


     

    Annex III ( continued)

     

    Description

    Objectives

    Source

    Human rights coverage

    Territorial coverage

    Company coverage

    Implementation/
    monitoring

    Legal status

    Kimberley Process Certification Scheme

    Certification scheme/ instrument directed at States, relevant to business

    Promotion and protection

    36 States and the European Union

    General references to human rights

    Countries that mine, trade and cut rough diamonds

    Diamond sector

    Certification scheme and monitoring by States parties

    Non-binding but commitment by States to respect and promote

    The Global Sullivan Principles

    Voluntary initiative

    Promotion and protection

    Independent

    General references to human rights

    Undefined

    Approx. 100 companies

    Annual reporting process to share experience

    Non-binding

    The Global Reporting Initiative

    Voluntary initiative

    Promotion and protection

    Independent (but in collaboration with the United Nations)

    General references to human rights

    Undefined

    Over 600 organizations using the Guidelines

    Sustainability reports

    Non-binding

    Fair Labor Association

    Voluntary initiative

    Promotion and protection

    Independent coalition of businesses and civil society

    Workers’ human rights

    Undefined

    12 leading brand name companies

    Independent monitoring mechanism and public reporting

    Non-binding

    The Extractive Industry Transparency Initiative

    Voluntary initiative

    Promotion and protection

    Governments, donors, companies, investors, civil society organizations and IFIs

    No reference to human rights

    Undefined

    Companies in the extractive sector

    Publishes guidelines on reporting

    Non-binding

    Caux Round Table Principles

    Voluntary initiative

    Promotion

    Independent

    General references to human rights

    Undefined

    International business leaders

    None

    Non-binding

    International Peace Operations Code of Conduct

    Voluntary initiative

    Promotion

    Independent

    General references to human rights

    Undefined

    Service companies engaged in international peace operations

    Engages in dialogue with stakeholders and publishes an industry newsletter

    Non-binding



     

    Annex III ( continued)

     

    Description

    Objectives

    Source

    Human rights coverage

    Territorial coverage

    Company coverage

    Implementation/
    monitoring

    Legal status

    The Danish Institute for Human Rights: Human Rights and Business Project

    Tools

    Promotion

    Independent, with support of government and participation of private sector and not-for-profit actors

    General and specific reference to a wide range of rights

    International

    Pharma, steel, agriculture, lugging, lumber, paper and cardboard, apparel and textile industries

    Enters into active dialogue with companies during the research and development phase; delivers training programmes; makes tools available for the assessment of compliance, develops codes

    Non-binding

    FTSE4Good Index

    Mainstream financial indices

    Promotion and protection

    Independent

    General to human rights

    International

    Wide

    Reviews information provided by business and independent sources to assess companies

    Non-binding

    Goldman Sachs Energy Environmental and Social Index

    Mainstream financial indices

    Promotion and protection

    Independent

    General references to human rights

    International

    Oil and gas industry

    Companies evaluated on thirty criteria in eight categories and ranked accordingly

    Non-binding


     


    Annex III ( continued)

     

    Description

    Objectives

    Source

    Human rights coverage

    Territorial coverage

    Company coverage

    Implementation/
    monitoring

    Legal status

    Alien Tort Claims Act

    National legislation

    Promotion and protection

    US Government

    No specific references, although read to encompass some human rights obligations

    International

    Wide

    Allows United States District Courts to take jurisdiction in matters involving injuries connected with the violation of the law of nations or a treaty to which the United States is a party

    Binding on companies

    Individual corporate initiatives

    Voluntary initiatives

    Promotion

    Individual companies

    Both general and specific references depending on the initiative

    Depends on the operations of the business entity

    Individual companies

    Self-monitoring

    Non-binding

     

    * * * * * * * * *

    C.H.R. RES. 2005/69, U.N. DOC. E/CN.4/2005/L.11/Add.7 at 68 (2005): 

    The Commission on Human Rights,

    Recalling its decision 2004/116 of 20 April 2004 on the responsibilities of transnational corporations and related business enterprises with regard to human rights,

    Welcoming the report of the United Nations High Commissioner for Human Rights on the responsibilities of transnational corporations and related business enterprises with regard to human rights (E/CN.4/2005/91),

    Recognizing that transnational corporations and other business enterprises can contribute to the enjoyment of human rights, inter alia through investment, employment creation and the stimulation of economic growth,

    Recognizing also that the responsible operation of transnational corporations and other business enterprises and effective national legislation can contribute to the promotion of respect for human rights and assist in channelling the benefits of business towards this goal,

    1. Requests the Secretary-General to appoint a special representative on the issue of human rights and transnational corporations and other business enterprises, for an initial period of two years, who shall submit an interim report to the Commission on Human Rights at its sixty-second session and a final report at its sixty-third session, with views and recommendations for the consideration of the Commission, with the following mandate:

    (a) To identify and clarify standards of corporate responsibility and accountability for transnational corporations and other business enterprises with regard to human rights;

    (b) To elaborate on the role of States in effectively regulating and adjudicating the role of transnational corporations and other business enterprises with regard to human rights, including through international cooperation;

    (c) To research and clarify the implications for transnational corporations and other business enterprises of concepts such as “complicity” and “sphere of influence”;

    (d) To develop materials and methodologies for undertaking human rights impact assessments of the activities of transnational corporations and other business enterprises;

    (e) To compile a compendium of best practices of States and transnational corporations and other business enterprises;

    2. Underlines that the Special Representative of the Secretary-General should take into account in his or her work the report of the United Nations High Commissioner for Human Rights and the contributions to that report provided by all stakeholders, as well as existing initiatives, standards and good practices;

    3. Requests the Special Representative, in carrying out the above mandate, to liaise closely with the Special Adviser to the Secretary-General for the Global Compact and to consult on an ongoing basis with all stakeholders, including States, the Global Compact, international and regional organizations such as the International Labour Organization, the United Nations Conference on Trade and Development, the United Nations

    Environment Programme and the Organization for Economic Co-operation and Development, transnational corporations and other business enterprises, and civil society, including employers’ organizations, workers’ organisations, indigenous and other affected communities and non-governmental organizations;

    4. Requests the Office of the High Commissioner for Human Rights to provide all necessary administrative support and financial and human resources to the Special Representative in carrying out this mandate;

    5. Requests the High Commissioner to convene annually, in cooperation with the Special Representative, a meeting with senior executives from companies and experts from a particular sector, such as the pharmaceutical, extractive or chemical industries, to consider, within the mandate of the Special Representative as set out in paragraph 1 above, the specific human rights issues faced by those sectors, to raise awareness and share best practice, and to report on the outcome of the first meeting to the Commission at its sixty-second session, under the same agenda item;

    6. Decides to continue its consideration of this question at its sixty-second session;

    7. Recommends the following draft decision to the Economic and Social Council for adoption:

    “The Economic and Social Council, taking note of Commission on Human Rights resolution 2005/69 of 20 April 2005,

    “Approves the request of the Commission to the Secretary-General to appoint a special representative on the issue of human rights and transnational corporations and other business enterprises, for an initial period of two years, to undertake the activities set out in that resolution.”

    C.H.R. res. 2005/69 was adopted 20 April 2005, by a vote of 49 in favor, 3 (Australia, South Africa, and the United States) against, and 1 (Burkino Faso) abstaining. The United States called for a vote and explained its vote against the resolution. See http://www.humanrights-usa.net/2005/0420Item17TNC.htm.

     

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