By Juliet Hepker and Daniel Litvin
The next few years are likely to see intensifying pressures to toughen the landmark voluntary initiatives on business and human rights.
“Is 2007 the end for voluntary standards?”, asked Arvind Ganesan, director of the business and human rights programme of Human Rights Watch, the influential NGO, in a recent article in Business and Social Responsibility Weekly. The evolution of voluntary initiatives during this year, he argued, will help determine whether they will be the “prime vehicle to improve practices or whether pressure for new legislation and regulatory measures will supersede them.”
This may be overstating the case given that one of the most recent NGO-supported attempts to develop global regulatory standards in this area – the UN Norms on business and human rights –now appears to have been left by the political wayside. Nonetheless, even if 2007 does not see voluntary standards superseded, the very fact that the Norms have been sidelined will likely encourage activist groups to focus with renewed intensity on pushing voluntary initiatives to adopt a tougher approach – for example to develop stronger reporting and governance mechanisms.
And with many of the flagship voluntary initiatives – such as the Voluntary Principles on Security and Human Rights, Kimberley Process and Extractive Industries Transparency Initiative (EITI) – focused on the extractive sector, this is a potential trend that needs to be understood in particular by energy and mining firms.
An important signal that this is the way the wind is blowing has come from the most recent report from the UN Secretary General’s special representative on business and human rights, Professor John Ruggie. Mr Ruggie, whose every pronouncement is being closely studied by groups on either of the debate, has previously criticised the Norms, and also made positive noises about voluntary approaches. In this report (which is likely to be his penultimate as the UN special representative), he nonetheless sets out a clear, albeit sophisticated, case for what might be called “voluntarism with teeth”.
Reviewing the state of international law on corporate responsibility for human rights issues, Mr Ruggie finds that international human rights instruments currently do not seem to “impose direct legal responsibilities on corporations” (though in the case of liability for international crimes “the risk environment for companies is expanding slowly but steadily”). At the same time, however, he highlights the importance of what he describes as “soft law” mechanisms, such as the OECD guidelines for multinational enterprises and the IFC performance standards. And interestingly he includes in this category of “soft law” mechanisms voluntary multi-stakeholder initiatives such as the Voluntary Principles, EITI and Kimberley Process. Such “soft-law hybrids”, Mr Ruggie argues, have made a “singular contribution” by acknowledging that “for some purposes the most sensible solution is to base initiatives on the notion of shared responsibility”.
Importantly, in classing such initiatives as “soft law”, Mr Ruggie not only lends them a degree of credibility, but also signals that their eventual success should be judged upon whether they help to establish actual norms of behaviour among companies and industries, rather than standing merely as statements of aspiration. Mr Ruggie’s report in itself provides an initial assessment of some of the voluntary initiatives by examining, for example, the credibility of their governance structures, and the (tidbits of) evidence available so far on their operational impact.
Prodded by NGOs, of course, a number of the voluntary initiatives have already moved on from being simply statements of aspiration. The Equator Principles and Global Compact, for example, have in recent years developed somewhat tougher reporting or governance requirements. The Kimberley Process and EITI have for some time had in place relatively detailed implementation processes for participants. At the time of writing this article, meanwhile, discussions were underway between groups involved in the Voluntary Principles as to how companies should be expected to demonstrate they are actually walking the talk on security issues. And more recently-founded initiatives such as the Council for Responsible Jewellery Practices are also now developing implementation processes as they seek to add credibility to their own principles.
But even the most advanced of the voluntary initiatives in this respect are unable to provide watertight guarantees of implementation by all of their participants, and often even companies involved with them recognise that governance mechanisms need bolstering. Also, many of the initiatives face another challenge: how to broaden their membership. Often those companies or governments whose standards are most in need of improvement are least likely to be participants. Meanwhile, as noted previously in this bulletin, NGO criticisms and campaigns against individual companies over their alleged involvement human rights abuses show no sign of abating – and these include criticisms of participants in the relevant voluntary initiatives, not just of non participants. There appears to be no shortage of material, in short, for NGOs seeking to point to implementation gaps in the voluntary initiatives.
It may be that, whatever their flaws, some of the initiatives are already starting to have a beneficial effect on the ground (albeit this is hard to judge without a detailed, independent survey). But what all this means in terms of the politics of the debate is that NGOs and other activists are likely to continue to prod and provoke the initiatives to show more teeth, to toughen their procedures, and to more effectively guarantee implem-entation, for many years to come.
The eventual result of this process, to borrow from Mr Ruggie’s ideas, may be that the “soft law” of voluntary initiatives crystallises over the next decade into something closer to “hard law” as they begin to act as quasi regulatory systems. This assumes naturally that the initiatives also start to help set norms of behaviour across companies and governments as a whole rather than their (often limited) current membership. But the fact that this is a possible outcome shows that voluntary initiatives actually have the potential to serve the goals of the NGOs, perhaps more powerfully than the UN Norms ever could – provided, of course, the NGOs keep up the pressure on them.