The Role of Business in Protecting Human Rights Globally

auditorium hall view

By the Democracy & Human Rights Working Group*

Responsibility for protecting and defending human rights does not lie with one entity alone.  While governments have the mandate to pass and enforce laws that protect human rights, other entities including business, civil society, the media, and academia play a role.  The global business community, in particular, plays a critical role due to its presence in countries around the world, its ability to potentially influence the economies of these countries, and its engagement with both host country governments and employees.  Businesses understand that it is in their interest for there to be rule of law in the countries in which they work, as well as stability in the enforcement of rules and regulations. In a July 1, 2021 letter to the House Appropriations Committee, the Chamber of Commerce noted its support for the National Endowment for Democracy and its four core institutes in their work “pushing back against efforts to undermine the rule of law, human rights, and democratic norms and institutions necessary for local economies to maintain a fair and competitive commercial environment.”  For the past 25 years, there also has been a growing recognition that corporate reputations are increasingly linked to their respect for the rights of workers in their global supply chains and the well-being of people in the communities where they operate.  It is this kind of stable and fair environment that offers companies the greatest likelihood of producing returns that their investors expect and upholding the values they espouse.

In 2011, the United Nations Human Rights Council endorsed the Guiding Principles on Business and Human Rights, which states that businesses “should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved.”  While these principles are not legally binding, they have been embraced by a number of multinational corporations and have helped create a convergence among stakeholders around these principles. They have also helped to encourage governments to integrate concepts like corporate human rights due diligence in other frameworks, such as those of the Organization for Economic Cooperation and Development (OECD) and International Labour Organization (ILO) and a proposed European Union mandatory due diligence requirement.  However, much work remains, as business-related human rights abuses continue to take place in all regions of the world.  In a June 23, 2021 Forbes article, Michael Posner references the exploitation of millions of underage workers around the world, noting that “this problem is especially acute in a few industries, like cocoa farming in West Africa, rug-making in South Asia and cobalt mining in Central Africa.” Approximately 25,000 children are forced to mine cobalt in the Democratic Republic of Congo, and more than 10 million mostly South Asian migrant workers are exploited in the construction sector in Arabian Gulf countries.

In recent years, the world has become a less secure and peaceful place.  Disinformation through the abuse of social media abounds.  Economic inequality, violent conflict, and nationalism and illiberalism are on the rise in many countries as a result of governments being unwilling or unable to adequately protect the rights of their own citizens. At the same time, the power of some global companies now rivals that of governments, creating a “governance gap.”  This places greater pressure on the business community to help bridge that gap.  According to a 2018 study by the non-governmental organization, Global Justice Now, “69 of the top 100 economic entities are corporations rather than governments.”  Comparing corporate revenue to national GDP,  Walmart is now the 23rd largest economy in the world, bigger than Sweden or Belgium.  Given their power and influence, companies must increasingly work with rights-respecting governments to address or prevent human rights violations like forced or child labor and unsafe working conditions, which continue to plague global supply chains, for example.  Those that do so are more likely to be rewarded by a new generation of investors– women and millennials, for example – that favor investing in companies with strong ESG (environmental, social (labor and human rights) and governance) records.  Assets in sustainable funds rose to $37.8 trillion globally at the end of 2020, and analysts including Bloomberg predict that ESG funds will account for a third of all global assets by 2025. Companies would be wise to pay attention to these new expectations.

Governments also need to do more.  The Guiding Principles resulted in 29 countries, mostly from North America and Europe, developing their own “National Action Plans” (NAP), with another 14, mostly from Africa, Asia and Latin America, pledging to do the same.  These NAPs are intended to lay out commitments by governments to set standards for their own practices, such as procurement, and track progress through measurable outcomes, but for the most part they have been ineffective.  President Biden’s administration announced in June 2021 its intent to update the NAP and make it more meaningful.

While these are important steps, much more needs to be done.  Recommendations for the U.S. administration, Congress, and the business community for working together to defend human rights globally include:

For the USG:

  • Strengthening the National Action Plan so that U.S. government procurement, contracting, and reporting practices contain measurable outcomes and timelines.
  • Encouraging other countries to similarly strengthen their NAPs with concrete benchmarks and timelines.
  • Support initiatives to develop human rights standards, metrics and assessment systems for each industry, in consultation with investors and industry stakeholders.
  • Requiring comprehensive and detailed reporting from companies on ESG issues so that investors can make informed decisions and advocate effectively.
  • Engaging with media and civil society globally to promote awareness of human rights abuses as well as the positive role that business can play.
  • Ensuring that asset owners who wish to have human rights concerns reflected in their investments are able to do so, including beneficiaries of corporate and public pension plans.

For the business community:

  • Working with industry peers and other key stakeholders to develop industry specific standards and metrics to evaluate performance with respect to the protection of human rights throughout their global operations.
  • Operating as a positive force in local communities by operating with safe working conditions and respecting worker rights.
  • Build trust with local businesses to work with business associations toward greater awareness of international standards and support best practice implementation
  • Coordinating with local business associations and other local stakeholders to emphasize the importance of rule of law and respect for human rights to host country governments.
  • Working with local business associations to challenge local governments when they are engaged in conduct relevant to business operations that seriously undermines the protection of human rights.
  • Engaging with stakeholders at all levels, but especially with those impacted by a company’s operations.
  • Engaging with investors to address their concerns on ESG issues and significantly strengthen the S in ESG frameworks to include labor and other risks in global supply chains as well as specific measures of performance, not just processes and promises.
  • Focusing on corporate governance by adding human rights issues to meeting agendas and sensitizing board members to human rights considerations.
  • Countering disinformation globally regarding human rights abuses in part by enhancing content moderation systems on social media platforms to better address harmful content online.
  • Taking additional steps to protect privacy and free expression online globally.

 

*  The Democracy & Human Rights Working Group is a nonpartisan initiative bringing together academic and think tank experts and practitioners from NGOs and previous Democratic and Republican administrations, seeking to elevate the importance of democracy and human rights issues in U.S. foreign policy. It is convened by Arizona State University’s McCain Institute for International Leadership.  The views expressed here do not necessarily represent the positions of individual members of the group or of their organizations.

Publish Date
October 4, 2021
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