Addendum 3: Report of the Seminar to Discuss U.N. Human Rights Guidelines for Companies, E/CN.4/Sub.2/2001/WG.2/WP.1/Add.3 (2001).

 

                       Draft Universal Human Rights Guidelines for Companies

Addendum 3:  Report of the Seminar to Discuss U.N. Human Rights Guidelines for Companies

(Geneva, 29 - 31 March 2001)

Seminar Chairperson:  Mr. David Weissbrodt

Rapporteur:  Ms. Penny L. Parker

CONTENTS

 

Paragraphs

Introduction

1

I.     ORGANIZATION OF WORK

2 – 15

II.    GENERAL COMMENTS

16 – 73

III.  CONSIDERATION OF THE DRAFT GUIDELINES

74 –132

 

IV.  CONCLUDING COMMENTS

133-152

V.  CONCLUSION

153-155

Annex I:    Text of the draft guidelines discussed at the Seminar

Annex II:  Summary of written comments submitted by participants

Annex III: List of participants

 

Introduction

1. A seminar was held at the Palais Wilson, Geneva, from 29 March to 31 March 2001, to discuss the draft U.N. Human Rights Guidelines for Companies.  The seminar was organized by the University of Minnesota in cooperation with the Office of the High Commissioner for Human Rights, with additional financial support from the Ford Foundation and the Swiss Federal Department of Foreign Affairs as well as practical assistance from the Lutheran World Federation.  Forty-six persons participated, representing a diverse cross-section of business and academic experts, non-governmental organizations, representatives of intergovernmental organizations, and members of the Sub-Commission.  A detailed list of the participants can be found in Annex III.

 

I. ORGANIZATION OF WORK


Opening of the seminar

2. David Weissbrodt, as chair, opened the seminar by welcoming the participants.  He introduced Stefanie Grant, Chief of the Research and Right to Development Branch of the Office of the High Commissioner for Human Rights.  He thanked Ms. Grant for her important role in supporting and inspiring the planning for this seminar.  He also thanked UN staff members Scott Jerbi and Jong Gil Woo for their invaluable assistance in preparing for the seminar.

 

3.  The chair then asked each participant to introduce himself or herself and to offer some background on their participation in this project and this field.

 

4. He then remarked on the ground rules and procedure for the seminar.  The seminar would use Chatham House rules, so that there would be no attribution of remarks to particular individuals and so that each person would feel free to express themselves freely.  The rapporteur would be preparing a report of the seminar, to be presented to the Sub-Commission’s Working Group on Methods and Activities of Transnational Corporations in August 2001. 

 

5. The chair stressed that this would not be a decision-making meeting.  There was not a need to reach an agreement or a consensus.  There are very different views represented in this room.   This seminar will provide an opportunity for input to Professor Weissbrodt’s work in drafting the guidelines and later for the consideration of the Working Group in early August.  Of course, if a consenus appears, it would not be ignored, but there would not be a press for agreement at the seminar. 

 

6. Ms. Stefanie Grant, representative of the Office of the High Commissioner for Human Rights, then offered some opening remarks.  She welcomed the participants to the Palais Wilson and thanked the University of Minnesota for the organization of the seminar, the Ford Foundation for its financial support; the Swiss Federal Department of Foreign Affairs for its support; and Lutheran World Federation for its practical assistance.

 

7. Special thanks were also given to Professor Weissbrodt for his efforts to bring such a diverse group together to discuss the Sub-Commission’s draft Human Rights Guidelines for Companies which he has played such a key leadership role in developing.

 

8. The seminar had been requested by the Working Group on the working methods and activities of transnational corporations, in its report of 28 August 2000.  The Working Group requested its experts to discuss before its August 2001 session, through meetings and seminars, the work they had started in 1999.

 

9. This seminar is a welcome example of how the UN’s human rights activities are increasingly reaching out to the business community, trade unions, non-governmental organizations as well as development and environment specialists.  Having such a diverse group of experts here provides an important opportunity to shape the final document which is to be presented by the working group to the Sub-Commission for its discussion in August.

 

10. The role of the private sector in the promotion and protection of human rights is an emerging issue - the Preamble of the Universal Declaration of Human Rights provides us with some helpful guidance through its affirmation that every individual and every organ of society, keeping the Declaration constantly in mind, shall strive to promote respect for human rights.

 

11. Governments are taking an increasing interest in ensuring that businesses act in ways which are good for sustainable development, for human rights, and for international cooperation.  Likewise, in recent years, there has been an increasing awareness on the part of businesses that they must face up to their responsibilities in the human rights field.  In this regard, the High Commissioner has stressed in her statements that even though states retain the primary responsibility for ensuring the protection of human rights under the human rights treaties, there is a new awareness that such responsibility entails ensuring that companies operating from or within their jurisdiction must not undermine existing human rights obligations or the international rule of law.  It is also crucial to understand that as we move forward, it will be critical that companies continue to take the lead in developing new forms of accountability and transparency.

 

12. There is now a need to translate human rights principles into language that is relevant and helpful to the business community as it seeks both to do its part in promoting human rights and avoiding involvement in violations.  It is our hope that the Guidelines for Companies will provide the normative human rights framework to assist companies in measuring their policies and actions against human rights principles and norms.

 

Adoption of the agenda

13. The following agenda was approved:

1. Self-introduction and preliminary comments on the five general questions.

2. Discussion in five subgroups (1) General obligations, (2) Security, (3) Employment, (4) Development and environment, and (5) Implementation procedures.

3. Reports of sub-groups

4. General discussion

5. Concluding remarks

Documentation

14. The seminar had before it the version of the draft guidelines attached in Annex I.  Several participants also submitted written responses to the Chair’s five general questions.  These written responses are summarized in Annex II.

Organization of work

15. In order to review and discuss the work in an efficient manner during the seminar, the Chair suggested establishing five working groups, with a chairperson and rapporteur appointed for each group, as follows:  

Group 1: General obligations (A. Definitions, B. General obligations, F. Bribery (paragraph 18 only), L. Consumer protection, and P. Concluding provisions).

Group 2: Security (C. War crimes, and H. Security).

Group 3: Employment (D. Non-discrimination, E. Slavery, G. Work environment, I. Remuneration, J. Hours of work, and K. Collective bargaining).

Group 4: Development and Environment (F. Respect for national sovereignty (except for paragraph 18 on bribery), M. Intellectual property, N. Environment, O. Other economic rights).

Group 5: Implementation procedures.

II. GENERAL COMMENTS

 

16. The Chair then asked participants to share their thoughts on the project as a whole, to discuss the five topics announced in advance of the meeting, and any other topics of concern to the participants. 

 

17. The five topics announced in advance of the meeting were as follows:

 

1.      Should the guidelines apply to transnational corporations only or to all companies?

2.      Should these guidelines be identified as a “code of conduct,” “principles,” “standards,” “rules,” “guiding principles”, “best practices” or some other title?

3.      Should the guidelines be legally binding or non-binding?

4.      What should be the scope of the guidelines?

5.      What techniques might be available for implementing the guidelines?

 

18. One person noted the fundamental problem was not knowing where the document would be at the end of the process.  There was a need to know whether it would be a voluntary or obligatory text.  On the subject of whether the text should apply to transnational corporations only, this speaker felt that all companies should be treated as equal.  But the text should not be legally binding. 

 

19. Another participant indicated that the objective should be to align company behaviour with social values.  There was a need for an authoritative, comprehensive, and specific code backed by the United Nations.  It should be in a mandatory legal framework.  Initially, however, it should be voluntary, eventually moving toward a binding set of rules.  This speaker also felt the rules should only apply to TNCs at least at first.  It was also hoped that the group could reach a degree of consensus at the seminar on these issues.

 

20. Another person expressed confusion over the nature of the document.  Were they to be guidelines or obligations?  She felt the text should apply to all companies, but that we should also recognize that transnational corporations have a greater obligation than smaller companies, especially those companies outside of government regulation.  There should be a preamble to lay out the relationship between states and companies.  It is not always clear how the UDHR applies to companies under the current laws.  She would also like to see movement toward binding guidelines.

 

21. Another particpant expressed the concern that there was a crowded field of codes existing presently.  There were six criteria he felt were important to look for: 1. Clarity. 2. More comprehensiveness. 3. More specificity. 4. A more authoritative text. 5. A text which was more tied to existing international standards and 6. More accountability.  The playing field should be leveled for responsible companies.  The rules should apply to all businesses across the board, not only to transnational corporations.

 

22. Yet another individual agreed that the guidelines should aply to all companies.  We may be confusing the size of companies with their influence.  If size is used as a determining factor, size needs to be defined, but she was not advocating this.  Transnational corporations have more influence but smaller companies also have influence.  Also, the guidelines should be binding to be credible.  There are too many guidelines out there already.  Information and transparency are necessary.  Without these two, it could be perceived as a public relations exercise.  It would not be credible.

 

23. Another person also commented on the crowded field of codes but said it may be a strength.  The Global Compact and Global Reporting Initiative could be used to apply more strength to this project.  The guidelines should apply to all companies.  We should consider how the guidelines are different in scope – for example, these guidelines include the subject of security forces; whereas the Global Compact and Global Reporting Initiative do not.  Also, the involvement of different actors, such as the state and other non-state actors, should be considered in how the guidelines are developed.

 

24. One person indicated that he was not sure about leveling the playing field.  It would be better to start with the big and powerful businesses first.  We should look for those who compete for best practices.  We should find ways that the work already done can be used and built upon in this project, such as the Global Compact and the other benchmarks that have already been created.

 

25. Another person responded to the comments on including the roles of states in the guidelines.  He referred to paragraph 6 of the present draft, where it states that governments have the main role to respect and promote human rights.  This paragraph answers some of the questions raised about governmental roles.

 

26. The guidelines need to be explained in plain ordinary business language, according to another participant.  The text should be kept simple.  So far the text of the guidelines are very difficult to work with.  Also, the final text should apply to all companies, not just transnational corporations.  It is easier for smaller companies to implement human rights measures.  To draft these guidelines well, we also need to look at the end result of whether the guidelines will be binding or not.  We must have some type of monitoring and enforcement if they are to be binding.  There should also be mention of economic and social rights before civil and political rights are addressed.

 

27. Another person noted that the distinction that was being drawn between transnational corporations and national organizations was not a meaningful distinction for employees or consumers.  A two-tiered system that would distinguish between the two types of organizations might establish a safe haven for national organizations, which may not have to implement human rights measures.  Also, this speaker noted that the guidelines as written actually fall into two categories – mandatory requirements and aspirational.  We should look at what is absolutely mandatory and what is aspirational.  We should try to promote a culture of compliance around the world.  The value of the code will be judged by its compliance.

 

28. The guidelines should apply to all companies, according to another speaker.  This person said he would also like to see binding rules overseen by a UN body.  It is unclear if this will ensure compliance.  The guidelines should also be enforced by pursuing economic incentives.

 

29. Another person also rose to speak on the subject of the guidelines, arguing that they should apply to all companies.  They should also be called rules, not guidelines.  It will be important to have consensus over the mechanisms for the application of the standards for businesses to implement them.  Also, referring to paragraph 6 of the text – what exactly does it mean for state involvement to ensure respect?  Does it mean that the governments will enforce the guidelines?  This speaker also argued for a preambular paragraph to the text, discussing the major issues.

 

30. Human rights is central to development and prosperity, according to another participant.  She said that corporations need a systems implementation guide.  The text should also apply to all companies, not just TNCs.  There can be influential companies in the national sphere, who need to be subject to the same rules as TNCs.  The title to the document should imply more than a mere compilation of what companies are already doing.  The standards should be binding.

 

31. Another person remarked that there should be limited exceptions to the applicability of the guidelines, for companies below a certain size.  The guidelines should be binding in the long run.  We need to have a clarification of individual and joint responsibilities.  The current draft is good but there may be an imbalance of treatment of conditions in developed and developing countries.  For example, labor hours and labour standards.  Another example is intellectual property.  These subjects need to be addressed to receive consensus.  Implementation should be through NGO’s under the auspices of the UN.  The Sub-Commission might consider seeking reports from the top 100 industries annually.

 

32. Another person remarked that the key would be implementation and accountability.  There are many codes out there.  The focus of this text should be on practical guidance to companies.  This would be of more value.

 

33. Another speaker argued on behalf of limiting the guidelines to transnational corporations only.  States can have no hold over TNCs like they can over local companies.  The code should address TNCs only for this reason.  Problems exist where liabilities exist.  Bribery brings in lots of imbalance.  There were three things this speaker would like to see.  1. Acknowledgement of the violation, for example by victim recognition. 2. Attonement. A statement of the breach. And 3. Affirmation of following human rights in the future.  There are three ways that a Code could influence TNCs – in terms of responsibility and liability; in terms of social responsibility; and as human rights watchdogs.  She doesn’t want corporations to be the bodies to ensure they are following human rights standards.  Issues that arise from the activities of TNCs include jurisdiction problems, transfer of technology, attachment of properties, passing liabilities to local companies, damage limitation laws, and conditions which allow companies to walk away without paying damages or restoring safety.

 

34. Another speaker agreed that there was a big difference between TNCs and local industries.  We should be clear not to confuse the two.  He felt that the code should deal only with TNCs.  At a later date a code could deal with national corporations.  Also, companies will laugh at a code if is not binding in nature.  States should adopt national legislation to implement the guidelines.

 

35. Of the 100 largest entities in the world, one speaker noted, 50 are companies.  The code however, should address all companies.  The cumulative impact of smaller companies is still enormous.  Regarding the name of the document, he felt that we should experiment with different approaches.  Perhaps a title could be used that suggests both economic initiatives and a binding code.  Binding principles may go through intergovernmental processes which may water down the code.  More inclusivity in the scope of the document may make it more difficult to get adopted in the future.  Regarding implementation, this speaker felt that there was a need for more reporting and verification.  The Global Reporting Initiative has a key role to play in this field.  This project should look at similar issues.

 

36. Another speaker said that the answers to several of the questions posed depended on the issue of whether they would be legally binding.  He would separate out the aspirational statements from the other provisions of the current text, if they were to eventually become binding.  Right now the text has elements of both.  Also, instead of a distinction between TNCs and national companies, the issue should be when should a state be jumped over to regulate a TNC.

 

37. While it would be nice to see this text as legally binding, it was not realistic in the short period, according to another speaker.  As a consequence he felt we should start with a voluntary code, incorporating all of the best codes that were already existing.  Also, the text should apply to all companies, not just TNCs.  He felt a better way to delineate between companies might be by gross income.  For many companies already complying with voluntary codes, the transition into a binding code would be easier.

 

38. Another speaker felt that the standards should be called minimal standards or basic rules. This approach would rule out the term code of conduct.  This speaker prefers a more modest name.  Also, he feels the text should be written as a binding set of rules because they will be binding at some point in the future.  He feels it would need a sentence that says it is non-binding, if it is to be non-binding.  But the document right now is not written to be a binding document.  Lots of norms in the guidelines could be binding.  It should be rewritten to be more clearly binding in nature.

 

39. Another speaker noted that the text should be applicable to all businesses.  He would want them described as a minimum level of standards for all, without regard to whether they apply to developed or developing countries.  He also felt that the social dialogue created by the Global Compact was important.  We should not have parallel standards which would make companies have to choose between the two.  We should be looking for something complementary to existing standards, to assist companies.  We also need to bear in mind there will be other instruments.  We need to keep in mind the outcome in the drafting of the standards.  In other words, where will this draft text go within the UN organization?  Which level of the UN will ultimately adopt or promote it?

 

40. Another person said we need to better describe how these guidelines relate to the Global Compact.  She asked, will they be seen as an implementation of the Global Compact?  We should examine how practical they are for companies to apply.  Transparency and disclosure should be the driving factors.  It is too early to make these into binding guidelines.  Piloting and testing should be done during a voluntary stage.  It doesn’t mean the code couldn’t have teeth.  We also need to be creative in implementation mechanisms, for example, responsible investing mechanisms.

 

41. Another person repeated the concern that it was too early for binding principles.  She said it was also unclear who would monitor and enforce the guidelines as currently written.  Specificity was needed, to strengthen the code.  She also noted that references to key ILO provisions needed to be added.  It was important to complement the work of the Global Compact, not to compete with it.

 

42. Another participant noted that it was appropriate for the UN to be the institution to bring together the variety of codes that were currently occupying the field.  On the subject of compliance vs. aspirational, he noted that compliance produces minimum standards.  However, aspirational goals tend to get businesses on board.  He suggests a compliance model which would address the core issues.  The aspirational provisions in the current text should be stripped away and then linked instead to the Global Compact, which is a more aspirational document.  Then we could produce parallel guidelines.  Also, he noted that the subject of sustainable development should be added to the current text.  The inclusion of transparency is also an important issue.  On the subject of national companies vs. TNCs, big oil companies can be entirely national.  Examples are the corruption of the state run oil companies in Nigeria and Sudan.  On another other subject, this speaker feels that the text should refer to sources directly instead of rewriting or synthesizing existing standards.  Othewise, the risk is misstatement.  Also, the subjects of compliance and best practices should be separated.  Regarding implementation procedures, some examples of mechanisms he would suggest include – state adoption and the appointment of rapporteurs.  Also, voluntary guidelines could be enforced through state reporting.

 

43. Another speaker commented that the opposite of binding is non-binding, not voluntary.  The OECD guidelines are voluntary and non-binding.  The OECD is clear that governments consider these as minimal standards.  It is clear they apply whether or not companies agree.  Our guidelines should be universally applicable.  He also suggested clarifying the definition of employee, and the boundaries of the enterprise.  He also feels there should be a debate over the appropriate monitoring and verification procedures.  We need to look for new mechanisms.  The same is true for reporting.  The speaker is concerned that businesses may be trying to redefine human rights, e.g., collective bargaining.  The guidelines are not sufficient on these issues.  Glossing over these issues might lead to a retreat from already recognized norms.

 

44. The complexity of the issues, remarks another speaker, make it difficult for the guidelines to be binding.  We should try to reconcile the different points of view.  This speaker still wants an international set of binding guidelines.  But perhaps we could adopt this report as an interim step.  We could create support that way for a later internationally binding code.

 

45. There’s no contradiction in this room, noted another speaker, on the issues of slavery and war crimes.  These standards are clear.  Others are not so clear.  Intellectual property rights, for example, could mean different things to different countries.  The speaker sees the same problem in paragrah 41 (economic, social and cultural rights).  What does it mean as drafted?  What must be done should be separated from what should be done?

 

46. At this point, the chair notes that most of provisions of the guidelines are derived from other documents.  The intellectual property provisions, for example, came from WTO TRIPS Agreement.  However, not all provisions have a clear source document.

 

47. Still another speaker noted that he had become “allergic” to new codes.  The text of this code was useful.  It adds to the existing OECD and ILO activities.  It is a good initiative.  He believes the guidelines should apply to companies generally, not just to TNCs.  Also, he thinks it would be useful to distinguish the commitments which are “negative” by their nature, from those that are “positive.” The negative obligations should apply to all companies.  But the positive obligations should apply to companies in varying degrees, depending on their degree of influence.  The positive/negative distinction should be made clear if it is to be applied in this way.  He also feels it is too early to draft a binding text.  However, if it is to be made binding, the text should make clear that states have a binding obligation to ensure that, etc.  The emphasis should be on states’ obligations to act.  This approach still leaves open what to do about companies that are beyond state control.  This speaker would support a voluntary code, in the form that the guidelines stand now.  The wording will depend on the implementation mechanisms envisioned.  Ideally, the UN should have a forum where complaints will be lodged and companies required to respond.  States may not be eager to give companies such a forum.  A binding text would be weaker.  A voluntary code, on the other hand, would create momentum for a binding instrument.

 

48. Another speaker comments that not enough is being done yet.  The field of human rights and business is very important.  We need to do more.  This project should be bold in its objectives.  There is conflict between desire and reality.  Many companies had not heard of the Universal Declaration of Human Rights until 1985.  Our business is to operationalize the Universal Declaration.  The guidelines could do this for companies.

 

49. Another speaker noted the three c’s of this project – completion, complementarity, and contradiction.  He doesn’t think there is as much conflict and overlap between this project and the Global Compact as some have suggested.  Both projects are valuable and should go forward.  The Global compact is aspirational.  This project is much more concrete.  These guidelines should not be aspirational.

 

50. The UN can provide a mechanism, another participant noted, to scrutinize and discuss these issues.  The evolving law on non-state actors is very positive in this regard and should be utilized to build support for this code.  On the other hand, he believes that if this code were to end up looking like any other voluntary code, like an industry group or NGO-group effort, it won’t add anything.  If it tries to generate a laundry list of issues that happen to be hot today (like conflict diamonds), but not in five years, it won’t add anything either.  His preference is to develop something that is simple and that emphasizes accountability.  In the end he believes the UN is the only legitimate forum out of which a statement of binding obligations can come.  The Sub-Commission’s work in this field is the beginning of that work.  He would emphasize simplicity at this time.

 

51. Another speaker noted that he wanted to second the comments made by others.  Couching the project as “the business obligations under the UDHR” is a helpful framework.  In looking at the aspirational vs. the practical issues, he suggests the group look at the ILO Tripartite Declaration as an example.  In that document, the ILO took the existing conventions and recommendations of the ILO and looked at their application to businesses in particular – to investigate the underlying principles that apply to businesses.  The logical question becomes, what is the obligation of business when the state fails its role.  What duty do businesses have to help states carry out their proper role?  Some states don’t seem to be able to fulfill their basic obligations to protect human rights, in the context of competition.  Do businesses need to show some restraint for this reason?

 

52. Another speaker agrees with several of the speakers about the danger of being too aspirational in this text.  But let’s not bargain it down to the bare minimum now, either.  The text should include a practical element.  Any company codes already existing are the bare minimum.  This project should go further.  It is easier to agree on child labour, etc.  Questions of health and safety are more difficult to define.

 

53. The Chair interjects at this point to note that he appreciates the comments made.  It has been a very high level discussion.  He is hesitant to insert his views too soon, but wanted to offer some guidance on how to structure the discussions that follow in smaller groups.  Perhaps each group should divide its focus between minimum guidelines (negative obligations, legally binding) and positive obligations (right to development, etc) which are more aspirational in nature.  To the extent it can, each group should identify the difference between the two types of obligations within the scope of the working group’s mandate.  Also, consider distinguishing between shall and should.  The document right now primarily uses the term “shall.”

 

54. Another observation made by a participant, was that the distinction wasn’t as much between binding and non-binding, but to what extent do the companies have to agree.  When one speaks of internationally binding standards, many international lawyers think of legally binding as something which applies to states through treaties.  It is a very different approach to have a voluntary statement, or code of conduct, for companies.  There are many steps in between.  The concept of “soft law” or “international law in the making” is relevant.  For example, the Sub-Commission might adopt these standards as a statement on what they think the law is becoming, not what is already binding as in treaties.  This may affect how the document will be implemented.  This may be even more important than if it is to formally have a legally binding character. 

 

55. Another speaker notes that the question from the beginning should be, what are we here to talk about?  What happens after this discussion?  Does a report go to the Sub-Commission?  What do they do with it?  Do they accept the report?  Should they adopt a statement regarding the concept of compulsory vs. voluntary?  If so, what happens to the content of the guidelines?  This is the problem this speaker sees with the Global Compact – it is of a voluntary nature.  How are we going to go into groups later today and grapple with this, until we know whether the text will be voluntary or legally binding?  It can’t be both.

 

56. The problem is, another person notes, if we draft the text as an international law instrument, businesses will be be very anxious and reluctant to sign up for it.  They often look at such language and become very concerned.  Many times once you explain it to them, they are relieved.  This type of tension must have arisen in connection with the ILO Tripartite Declaration.  How was it handled in the ILO?

 

57. Another speaker notes that, from his ILO experience – there were concerns about sovereignty and scope in the discussions of the Tripartite Declaration.  He likes the idea of framing this project as the Sub-Commission studying ways to interpret the Universal Declaration of Human Rights for businesses.  He doesn’t like the idea of using the Global Compact as a starting point.  It is very valuable in its own right – it is meant to be a social dialogue.  But it is not a code of conduct.  It was never intended to be a code of conduct.

 

58. Another person comments that he appreciates the rich debate that has been going on in this morning’s session.  Many things are on the table.  There are many different ways to go.  The challenge is, how can we do something this afternoon which will move this topic forward?  He’s not sure.  But he has a question to pose to the group.  This is really the first time where the human rights part of the UN has tried to tackle the interrelationship with businesses.  Are the techniques used in the past with governments, and changing government conduct, adequate in changing the conduct of corporate actors?  How long does it take?  How much of an investment does it take?  Are there new ways of reaching the private sector directly, with a message of what we expect? 

 

59. Summarizing the morning’s discussion, the Chair notes that there seems to be a significant amount of consensus on most of the five key questions.  (1) On the subject of whether the guidelines should apply to multi-national companies only or to all companies -- While a few participants have indicated that the largest problem is the international companies, the great majority of the participants seem to agree that the guidelines should apply to all companies.  (2) On the second question, what the title of the text should be, there wasn’t as much discussion on how to formulate the title.  Should they be called minimum guidelines?  One speaker had several other suggestions.  (3) On the third issue, binding vs. non-binding, there appears to be a much greater diversity of opinion.  It seems clear that we’re not yet ready to draft a treaty.  Some have indicated that the document should be voluntary.  But the majority of those who have spoken seem to favor some degree of obligation or binding character for these standards.  We still need to determine how the instrument will be taken on a binding chacter.  We should also note that different articles of the current draft approach this issue differently.  Some have negative obligations, that is, things that companies should not do.  Some restate previously binding obligations from other sources – such as the Genocide Convention.  You’ll have to assume they are more than voluntary, but how much more is yet to be resolved.  (4) On the scope of the guidelines, there were several comments.  All seem to be calling for a comprehensive view of the guidelines.  Topics mentioned include environmental law, transparency, bribery, etc.  Humanitarian law too has been suggested – because it fits within human rights.  (5) On techniques for implementation, there were many suggestions.  It is difficult to do a quick summary.  Some of the suggestions include: reporting mechanisms, monitoring mechanisms, complaint mechanisms, and using the UN as a forum for receiving information.  Perhaps, the Sub-Commission or its working group could have a part in this task.  UN procurement might also be a mechanism for implementation.

 

60. The chair notes that he is offering this interim summary of where the group seems to be, so that we can pull something constructive out of this rich debate.  It has been a very worthwhile and substantive discussion.  Even though there is ambiguity in this process, he urges the groups to look closely at the language and improve the text as much as possible.  Even though we don’t know what the Sub-Commission will do with this document, we need to do the best that we can.  This is often the case when drafting a document in the UN.  Let’s try to get it as right as possible, even in this context.

 

61. A question is posed to the chair on what he has in mind as minimum guidelines.  There is a difference between minimum and aspirational.  Maybe aspirational is the wrong word.  He’s interested in continual improvement -- striving toward something.  This concept should somehow be incorporated into the text.

 

62. The chair responds that there wasn’t a lot of discussion on this issue of minimum guidelines.  It may be that it isn’t the right term.  Perhaps, we should try to make the text “user friendly” as one speaker was suggesting.  In other words, we should be clarifying for companies what they must do under recognized international human rights law.  The chair indicated that he was still pondering this issue.  He hadn’t reached a final conclusion yet.

 

63. Another speaker noted that he doesn’t buy the general statement that transnational corporations are the worst violators of human rights.  They are easier to put the spotlight on.  They are more visible.  And they are probably easier to monitor.  But he doesn’t think it is fair to conclude they are the worst violators.

 

64. In response, another speaker says, to clarify, she doesn’t think that anyone in the room is saying that TNCs are the worst actors.  But because of their transnational structure, it is very difficult to get true accountability from them.  That’s the point.  They overwhelm the local state government infrastructure.  She also notes on the scope of the document that there are other topics that should be included:  Protection and prevention of abuse, access to justice when there is abuse, and reparation.  This document needs to address all of these subjects.  She will be very disappointed if it doesn’t.  Access to justice and reparation are the keys – they need to be in this document.

 

65. To respond to the challenge made by a prior speaker, one participant argues that there are no global institutions or global government structures that can deal effectively with transnational corporations.  This is the issue.  It is a matter of sovereignty.  It is very important, however, not to hand power to multinationals, even if we feel that governments are doing what they should.  An NGO recently asked him, as a business representative, to lobby the government of Sudan.  He said no.  His company had no business activities in Sudan.  This type of action would be a dangerous phenomenon.  We should not encourage it.  It makes a corporation into a small form of a state.  There ought to be a very clear difference between what a state is and what a corporation is.

 

66. Another speaker notes that there are social responsibility type audits going on in this field. We find in this area that image building is a large part of companies’ involvement.  Companies are motivated to act properly because they are being held answerable for their conduct via these audits.  We need to make sure we develop a product which permits this sortof scrutiny.

 

67. Another person notes they agree with much that has been said.  Working on corporate responsibility in his job, he has seen increasing recognition by companies of the need to embrace this area, but there is a need for realistic scrutiny to keep the pressure on.  As we think about this particular project, he urges the group to keep in mind that the number of companies that have expressed public support or acknowledgement of their obligations in this area, is still very small.  We need to consider how to increase overall participation dramatically.  The first goal should be to further the acknowledgement process.  We’re not as far along in the world, as we are in this room.

 

68. The distinction made between treaties and other international law documents, comments another participant, is a helpful one.  This group is not a group of states.  We are not heading down a path of creating a treaty.  So we have a legal document that is not a treaty, but it has some legal effect.  He will be joining shortly a seminar on the legal effect of presidential statements in U.N. bodies.  They’re not binding instruments like treaties are, but they do have some binding character.  It’s the same thing here.  Having said that, he thinks the title “minimum guidelines” is missing the mark.  Maybe “universal” is a better way to describe it.  A universal set of guidelines.  He doesn’t think this project is heading toward an interstate treaty.  It is going to become some other type of legal document.  Let’s keep this in mind.

 

69. Another person notes that we should be thinking about other complementary approaches that have value.  Understanding that the ultimate objective is to improve the behaviour of international actors, lets explore ways to create a culture of compliance.  We should be using the moral authority of the UN in creative ways.  We need to ask ourselves, what motivates companies?  What positive influence can we bring to bear?  What aspects of UN institutions can be used to create knowledge and to create a culture of compliance?  The speaker isn’t saying that guidelines have no place.  But to the extent they are viewed as a punitive step, there needs to be a lot of community education associated with them, to create a true culture of compliance.

 

70. Another participant notes that in the end it is states that make international law -- not this group and not companies.  What we’re trying to do is develop a document that’s in a form that if the states choose to adopt it, they can.  But we are not making law here.  The project is in a very early stage.  This can get very confusing.  A simple document that could fuse or bring together these issues, would be invaluable.  One that includes business, NGO, labor groups, etc.  On the issue of TNCs vs all businesses, we need to go back to the basics of the purpose of human rights law.  We have learned that some states in power would abuse that power, and commit horrible human rights abuses.  This is why human rights law developed, after the horrors of the 2nd World War.  Large companies are absorbing some of the influence and power that used to reside in the states.  This is the basic motivation of human rights law – you go to where the power is.  However, if we’re creating something for the next 10 to 20 years, there is no logical distinction between TNCs and other companies.  It tends to be a legal fiction.  TNCs can reorganize themselves into non-TNCs.  Many of the oil companies have done this, for example.  There is no logical distinction between the two for these reasons.  So for the long term we need to be creating a document that applies to all companies, although the biggest problem at the moment is the TNCs.

 

70. The chair then concludes the morning session by commenting on how impressive the breadth and depth of the discussion has been.  We don’t have total clarity.  But it seems that most of the comments made earlier appear to have captured the consensus in the room and have been validated by the further discussion.  The guidelines should emphasize TNCs, but all businesses should comply with these standards in the long term. The name of document still needs to be debated.  On the issue of the binding vs. non-binding nature of the document, there seems to be consensus that these principles are not entirely voluntary, but they are not treaty-like either.  The guidelines are “soft law” as one speaker has indicated.  But how soft, is yet to be considered.  Let’s “muddle” through with these principles in mind as we move into our working groups this afternoon. 

 

71. One question from a participant seeks clarification as to whether the group should be looking for words easily understandable by the Sub-Commission, or by businesses.  The chair responds: that most of this document is principally directed towards companies.  But he also notes that we’re not engaged in an attempt to force consensus.  We’re attempting to get input into the document, to identify problems in the language that need to be fixed.

 

72. Another question from the group poses where the group is being asked to separate core standards from aspirational issues.  If so, in this speaker’s view there are 3 categories.  1. Core.  2. Aspirational. and 3. Explanatory language for both.  We should keep in mind that the Universal Declaration of Human Rights was drafted in the 40’s before there were many TNCs.  The speaker also asks whether a status report from the implementation working group could be made to the other groups, since implementation seems to be so important to the entire text.

 

73. The chair notes that the division into three categories suggested by the speaker should be considered by the discussion groups in the afternoon.  There will be a specific discussion group on implementation, but each group should be focussing on implementation in its respective subject matter.  For example, in the area of employment – the working group on that topic should be considering special issues that arise in regard to employment issues.  Also, the rapporteurs are invited to meet early on Saturday morning to share any cross-cutting issues which may have arisen during the Friday afternoon discussions, so that all the discussion groups will be informed of relevant concerns that may have been discussed in other discussion groups. 

 

III. CONSIDERATION OF THE DRAFT GUIDELINES

 

74. During the Friday afternoon session, and continuing for some groups through Saturday morning, the seminar divided into five working groups to consider the various aspects of the draft text.  The seminar was then reconvened in plenary during Saturday afternoon.  The Chair asked each of the rapporteurs to give a report on their working group.  The five discussion group reports follow:

Group 1: General obligations

 

75. The rapporteur for Group 1 reported that their group considered the provisions of a general obligation in the draft document, including the definitions in paragraphs 1-5, the general obligation paragraph 6, paragraph 18 pertaining to bribery, paragraphs 34-36 on consumer protections, and the concluding provisions, paragraphs 44 to 60.

 

THE NEED FOR A PREAMBLE

 

76. The group began with a general discussion of the need for a preamble and what it should contain.  Suggestions included: (1) Explaining how this text fits into the context of the existing instruments, including the Global Compact, ILO, and OECD guidelines; and (2) Whether there should be a strict linking of the text to the source documentation, so it is clear we are not recreating the wheel, we are using the verbatim language from prior instruments, merely compiling the relevant principles into one document.

 

OTHER OVERVIEW COMMENTS

 

77.  The rapporteur reported that the group concluded that there needed to be a separate savings clause—in other words language that makes it clear that these guidelines are not intended to lower the existing human rights standards.  Where standards exist that go further than these, those standards should apply.  The savings clause needs to be removed from para 5 and made to stand alone.  Also perhaps there should be a call for companies to join the Global Compact as one of the implementation steps in the document.

 

DEFINITIONS

 

78.     In the definitions section, the group noted the comments made in the morning session on employee and stakeholder but did not come up with alternative text that they were comfortable with.  They recommended that all definitions should be parallel in structure.  A few minor modifications are necessary to achieve this objective.  The interchanging use of terms “activities”, “practices”, “operations” and “mission” should be harmonized.  Also in paragraph 5 – the definition of internationally recognized human rights –there should be an explanation of what the Bill of Human Rights is in the commentary.

 

PARAGRAPH 6: GENERAL OBLIGATION

 

79. This paragraph is perhaps the single most important provision.  This section was discussed at length.  Several ideas surfaced for rewording the text, including making it more clear that companies have separate, independent obligations to ensure respect, making states and companies obligations on a parity, differences in the meaning between responsibility, duty and obligation, negative vs. positive obligations, direct vs. indirect responsibilities, whether the word “shall” is appropriate.  Some members also had concern with the last phrase, “within their respetive spheres of activity and influence.” But in the end, we elected not to change the text.

 

BRIBERY

 

80. Comments to this paragraph included:  Perhaps there should be a reference to states’ obligations too in this paragraph.  Companies that breach these guidelines – to be held accountable if they do?  Add some implementation here and generally in the guidelines, so that states commit to take steps to ensure that these guidelines are being followed in practice.  This kind of text could also be in the resolution that adopts the guidelines.  A call on all states to adopt implementing legislation, etc.  One suggestion in the last sentence is to limit somewhat the transparency phrase by saying “enhance the transparency of their activities in this regard”. – this way it relates to the bribery concerns and is not a general call to make all aspects of their business operations transparent – which may call into question competitive information, trade secrets, etc.  Another person suggests a separate sentence – general transparency as it relates to financial payments to governments.  Reference was made to the action of BP in Angola where a general call on revenue allocation to the government is being made.  Nobody knows how much money authorities are funneling to education, or are skimming off.

 

SECTION L: CONSUMER PROTECTION

 

81. Comments to this section included: Is the reference to products wholly within a state’s boundaries necessary?  Para 34.  Someone suggests the last sentence is not necessary.  “All appropriate information” referred to in the first sentence would certainly include warning of death or serious injury.  Another person thinks it strengthens the text to add the 2nd sentence.  Most in the group agree that the text as currently written should stay as is.  And there should be perhaps added a qualification in para 36 to the “supply information” phrase – supply “appropriate” information – so that there is some reasonable limit to the type of information which must be supplied.

 

SECTION P: CONCLUDING PROVISIONS (paragraphs 44-46)

 

82. Comments to this section were the following:  Substantially similar guidelines – could be a cop out.  Suggestion is made to add the following “or substantially similar guidelines which meet international human rights standards.”  The last sentence of 45 may be too harsh.  As an interim step between doing business with a violating company and ceasing business altogether, couldn’t there be some efforts to get the supplier to reform its practices?  Add something like this: Take all necessary steps to reform or decrease these violations and, in the extreme case of suppliers who will not change, then cutting them off.  Perhaps refer to the “sphere of influence” type concept here – to make it clear the buying company has an affirmative obligation to try and rectify the bad practices, not just cease doing business with the offender.  In 46: One person suggests striking the word “stakeholders” in the first part, to avoid the question of who a stakeholder is and how one gets adequate information to them.  Another person points out this provision makes a leap between knowing where offices are located, and “reassuring” stakeholders that products are being produced under proper conditions.  To truly reassure, is to require substantial, effective monitoring.  Maybe something like “Companies should make every effort to be transparent about their supply chain, as far as realistically possible.” Take out the “so stakeholders can be reassured” – because that’s wishfull thinking.