Commentary on the United States Council for International Business 'Talking Points' on the United Nations Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights
 
By Sir Geoffrey Chandler, Founder-Chair, Amnesty International UK Business Group 1991-2001, and a former Director, Shell International

20 November 2003

In a misleading and factually inaccurate set of Talking Points the United States Council for International Business (USCIB) attacks the United Nations Norms on the Responsibilities of Transnational Corporations and other Business Enterprises with Regard to Human Rights, unanimously adopted in August this year by the United Nations Sub-Commission on the Promotion and Protection of Human Rights.  In so doing, the Council does a disservice to its members by its distorted description of an initiative which could in fact assist corporations in today's more risky and dangerous world.

Since the ending of the Cold War, companies have hugely expanded their operations, particularly into the developing world, but in so doing have confronted a context of conflict and human rights violations to an unprecedented degree.  Without appropriate policies for the challenges they confront, they have shown themselves liable to suffer significant damage not only to plant and personnel, but also to reputation, as has been the experience of a number of leading companies.  Guidelines for appropriate conduct have been developed by
intergovernmental or international organisations (not by business, as the USCIB asserts), of which the most notable are the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises.  These have assisted in creating awareness of the risks and responsibilities of business today, but only a small minority of transnational corporations have joined the Compact and the OECD Guidelines have proved an inadequate mechanism for improving corporate behaviour.  Both the Global Compact and the OECD Guidelines state that companies should respect human rights, but neither document explains what this means.  The Norms provide such an explanation.

The value of the Norms to business is that they distil, in a single comprehensive and authoritative document, the international human rights principles applicable to the whole range of business responsibilities for all businesses.  They reflect, in a manner which assists their operationalising by companies, the internationally agreed instruments of the UN Universal Declaration of Human Rights, the Convention on the Rights of the Child, and the core International Labour Organization conventions.   

 They are not legally binding, other than for those issues, such as the prohibition of slavery, already the subject of international and national law; but representing as they do the behaviour expected of corporations by the international community, they are more than voluntary.   They provide a template against which corporations can measure their own codes and the basis for a level playing field so that the better performers are not undermined by the worse.

In the generality of its conclusions the USCIB is misleading; in the detail used to justify these conclusions it is factually inaccurate.

The USCIB says 'the Norms are predicated on the belief that human rights can best  be advanced by circumventing national political and legal frameworks'.  Not so.  The first and most important paragraph of the Norms declares that 'States have the primary responsibility to respect, ensure respect for, prevent abuses of, and promote human rights recognised in international as well as national law, including ensuring that transnational corporations and other business enterprises respect human rights'.

The USCIB says the Norms 'would shift the focus away from some of the worst cases of human rights and labour abuses that take place in local economies'.  Not so.  The Norms, as their full title indicates, apply to all businesses.

The USCIB says 'Private organisations, including business, do not have the democratic mandate or authority to assume what are and should remain government responsibilities and functions'.  Yes indeed.  That is why the Norms clearly state at the outset that the responsibilities of corporations lie 'within their respective spheres of activity and influence'.

The USCIB says 'companies would be required to ensure that all companies in their entire supply chain comply with the draft code……would be required to break contracts with the suppliers that the company - not an impartial court - deems to be in non-compliance' and 'would create a legal justification for companies to break contracts at will'.  Not so.  The Norms state 'Each
transnational corporation or other business enterprise shall apply and incorporate these principles in their contracts or other arrangements and dealings with contractors, sub-contractors, suppliers and licensees in order to ensure their [the Norms'] implementation and respect'    The aim is to avoid in advance contractual disputes and to deal with the first levels of a company's contractual relations.  Moreover, the Commentary to the Norms states that companies 'using or considering entering into business relationships with contractors, sub-contractors, suppliers [etc] 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'.

Finally the USCIB says the Norms 'would create a deterrent to investing in developing countries' and 'virtually eliminate the very investment that is the best hope for economic development and improved human rights'.  For any thinking manager this is to turn reality on its head.  Security of investment today, and its acceptability to shareholders, pension funds, and government agencies which assist funding, depend increasingly on companies playing their legitimate role in defence of human rights in the totality of their operations, or in other words, as the Norms state, within their respective spheres of activity and influence. 

A 'Status Report' on the Norms which accompanies the Talking Points also contains mis-statements of fact.  It describes the Norms as a 'code of conduct' which it is not.  It describes the United Nations Sub-Commission on the Promotion and Protection of Human Rights belittlingly as an 'advisory panel' which it is not.  It is an expert body which in the 50 years of its existence has been responsible for preparing a number of the most important human rights standard-setting instruments.  It says that the Norms were prepared in three years. 
In fact they were the subject of four public hearings in Geneva in 2000, 2001, 2002 and 2003 and of meetings during March 2001 and 2003 at which representatives of business, unions, NGOs,  and the academic world were involved in re-shaping the document.  Many governments, including that of the United States, attended the sessions of the Working Group and had opportunity for input at that stage.

Through its distortion of fact and prejudiced interpretation the USCIB does a disservice not only to its members and those who invest in them, but also to the societies in which business operates.  Public trust in business has never been lower, eroded by high profile examples of environmental pollution, by human rights abuses, and, most recently, by the blatant corruption of Enron and others.  Adherence to the Norms would visibly demonstrate a belief in principle as well as profit, analogous in principle to the good citizen following the moral code embedded in society, and help to restore trust.  The Norms, on which the USCIB, like other organisations, had ample opportunity to comment in the formative stage, but failed to do so, represent an opportunity for companies, not a threat - an opportunity to assist and profit from a safer and more prosperous world.