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May 06, 2013

Loopholes in Commitments to Human Rights by US Businesses, UN finds
    by Robert Kropp

While the US Government has committed to the UN Guiding Principles on Business and Human Rights, the UN Working Group on business and human rights finds that US companies fall short of standards. -- Authored by Professor John Ruggie and endorsed in 2011 by the United Nations Human Rights Council, the Guiding Principles on Business and Human Rights (UNGP) provide guidance for implementation of the Protect, Respect and Remedy Framework submitted to the Council by Ruggie in 2008.

Described by Rev. David Schilling, the director of human rights for the Interfaith Center on Corporate Responsibility (ICCR) as a "significant breakthrough and an indispensible resource for investors in assessing the human rights performance of companies," the Guiding Principles state, "Business enterprises…should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved."

A report published this year by ICCR, Calvert Investments, and the Institute for Human Rights and Business (IHRB) states, "As compelling as the business case for respecting human rights has become - focusing in particular on diminishing or avoiding risk to the company - human rights are intrinsically worthy of respect and not simply on the condition that this respect brings a financial benefit."

The US government has publicly committed to implementation of the Guiding Principles, but thus far its efforts "lack a clear, publicly-articulated vision and strategy," according to a report by the International Corporate Accountability Roundtable (ICAR). The report follows an event hosted by ICAR at Georgetown University in April, at which members of the UN Working Group on business and human rights discussed the issue of human rights and transnational corporations.

"Meeting the US government's human rights obligation to protect against human rights abuses involving business will require a range of robust measures over time," the report states. It notes that the government has taken several important steps toward implementation of the Guiding Principles: it has hosted workshops for investors and companies; developed initiatives promoting human rights in the extractive industries and private security industry; issued an executive order addressing human trafficking and a draft report on investing in Burma; and reported on its implementation of the Voluntary Principles on Security and Human Rights.

However, "there are numerous areas where further action is needed," the report states. "A national implementation plan would provide clarity of expectation for all US companies and create a framework for engaging directly with other governments and regional or global bodies to identify challenges and best practices. The plan should articulate how the US government will comply with its duty to protect human rights across government agencies and departments."

Furthermore, "Strong, effective human rights due diligence procedures are fundamental to ensure that human rights are respected in company actions both inside and outside their home territories," the report continues. "We strongly urge the US government to enact mandatory human rights due diligence requirements under US law."

ICAR also recommended that reporting on human rights due diligence efforts by companies be mandatory.

Also, "When harm occurs, the state must ensure an effective remedy is available to the victims, and business must meet its responsibility to respect human rights by cooperating with complaints processes, both judicial and non-judicial, as appropriate," the report recommends.

Among the stakeholders contributing submissions to the report was Investors Against Genocide (IAG), which argued for "procedures for accountability and remediation, and a commitment to use those procedures. Good actors may do well without these elements, but bad actors may too easily finesse general guidance to use the framework to insulate themselves from criticism while actually doing little to no good and continuing to support harm."

Other groups submitted briefs on Free Prior and Informed Consent, trafficking in persons, protection for defenders of human rights, and human rights in private prisons.

At the conference, members of the Working Group heard "allegations of significant and widespread labor practices" in the low-wage service sectors, "that, if correct, would be both illegal under US laws, as well as fall below international standards."

In the US, "the legal and regulatory framework provides weak deterrents to illegal behavior, too many loopholes to avoid compliance and little incentive for companies to behave responsibly, according to the allegations we heard," Working Group member Puvan Selvanathan stated. "Most companies still struggle to understand the implications of the corporate responsibility to respect human rights. Those that do have policies in place, in turn face the challenge of turning such policies into effective practices."

Michael Addo of the Working Group said, "Much more awareness-raising and education needs to take place. Effective implementation of the Guiding Principles by companies requires first and foremost a good understanding of the processes involved, mobilization of significant buy-in and commitment from the top of a company."

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