 
KAIROS Statement on
the Report of the UN Special Representative
of the Secretary-General
on business and human rights (Dr. John
Ruggie), entitled
“Protect, Respect and Remedy: a Framework
for Business and Human Rights”
June 2008
This month the Special Representative of the Secretary-General
on business and human rights is tabling a report at the UN Human
Rights Council, entitled, Protect, Respect
and Remedy: a Framework for Business and Human Rights. KAIROS welcomes this report and
the work of the Special Representative during his three-year mandate.
The Special Representative notes that
economic globalization has brought with it a “governance
gap” in the regulation
of business activities, one that provides a “permissive
environment for wrongful acts by companies of all kinds without
adequate sanctioning or reparation.” This is largely why
the post of Special Representative was created in July 2005 – to
make progress within the United Nations institutions in closing
this gap.
KAIROS and our partners in the global
South are painfully aware of this governance vacuum and its detrimental
impact on human rights. “Every day
that passes without accountability means more lives lost or endangered,
more habitat destroyed or put at risk, more water polluted,” said Thabo Madihlaba, an activist
with the Environmental Justice Networking Forum in South Africa. “What’s
needed is for governments to hold companies to account. Our experience
is that in countries where voluntary frameworks are in place, they
just don’t get results.”
A new conceptual framework
KAIROS welcomes the conceptual framework
outlining the differentiated but complementary responsibilities
regarding business and human rights:
-
The State duty to protect against
human rights abuses by third parties, including business;
- The corporate responsibility to
respect human rights; and
- The need for more effective access
to remedies.
Importantly, the report recognizes that
business can affect virtually all internationally recognized rights.
This is consistent with KAIROS’ view that human rights are universal
and inalienable. In the words of Monsignor Roger Ebacher, Archbishop
of Gatineau, Quebec, “Human rights are
not optional anywhere in the world: they are mandatory.” Attempting to limit
the scope of business’ responsibility to respect human rights
by including some rights but not others is the wrong approach.
The report recommends that companies
consider, at a minimum, the international bill of human rights
and the core conventions of the International Labour Organization
(ILO). We urge the Special Representative to include the Declaration
on the Rights of Indigenous Peoples as another fundamental standard
that companies must respect, particularly in instances where their
operations affect indigenous peoples and their lands, territories
and resources.
Binding legislation urgently needed
Home State legislation, which ensures
that companies headquartered in a particular country (e.g. the
home state) comply with internationally recognized human rights
and environmental practices when operating overseas, is urgently
needed if the existing governance gap is to be seriously addressed.
We regret that the Special Representative
stops short of recommending that home States enact legislation
to hold companies accountable for human rights abuses in their
international operations. However, we welcome his finding that
there is an emerging international consensus that States “are
not prohibited from doing so where a recognized basis of jurisdiction
exists.”
It is noteworthy that the Special Representative
specifically cites a recommendation of one of the UN treaty bodies,
the Committee on the Elimination of Racial Discrimination, which
calls on the Government of Canada to “take
appropriate legislative or administrative measures” to ensure that companies registered
in Canada respect the rights of indigenous peoples in other countries.
This recommendation supports the call for binding legislation.
KAIROS’ partners are only too
aware of the damage some Canadian companies have done to indigenous
communities and their lands. Dr. Constancio Claver, vice-president
of the Cordillera Peoples Alliance in the Philippines, spoke last
year about a mine in his country operated by Calgary-based TVI
Pacific Inc.: “[The
mine] has been in operation for six years and the indigenous people
there, the Subanons, even came to Canada in 2004 to testify before
a House of Commons committee about the pollution, population displacement
and human rights abuses, such as people being prevented from getting
access to their farmland and the bulldozing of houses.” The
mine continues its operation and, the Government of Canada has
yet to properly investigate the situation.
Access to justice is a recurring theme
within the report. States are called to “address
obstacles to access to justice, including for foreign plaintiffs – especially
where alleged abuses reach the level of widespread and systemic
human rights violations.” We urge Canada to act on the
recommendation from the UN Committee on the Elimination of Racial
Discrimination and enact legislation to hold Canadian companies
accountable for human rights compliance, including the rights of
indigenous peoples, in their overseas operations.
Canadian Roundtables on the Extractive
Sector
The Special Representative’s Report
provides the Government of Canada with numerous recommendations
for action. . Many of the policy reforms mirror recommendations
made during the National Roundtables on Corporate
Social Responsibility (CSR) and the Canadian Extractive Sector
in Developing Countries,
convened by the Canadian federal government in 2006. Dr. Ruggie
was invited to Montreal in November 2006 to address the fourth
and final Roundtable session, and he spoke very highly of the CSR
Roundtable Process and has done so subsequently.
KAIROS partners spoke passionately about
the need for action by Canada in regulating corporate activity
abroad. At the roundtable held in Calgary in October 2006, Lilia
Rocio Castaneda of Sintraminercol, a Colombian mine workers’ union, explained
the impact of foreign multinationals: “In
Colombia, resource extraction companies have exacerbated the conflict
and an already atrocious human rights situation. Regions rich in
minerals and oil have been marked by violence, paramilitary control,
and displacement. In fact, these resource-rich regions are the
source of 87% of forced displacements, 82% of violations of human
rights and international humanitarian law, and 83% of assassinations
of trade union leaders in the country.”
In March 2007, the National Roundtables
Advisory Group tabled a series of 27 policy recommendations to
the federal government – an unprecedented consensus between
representatives of industry, civil society, academia and the investment
sector. These recommendations were the first step towards necessary
binding legislation for Canadian companies. Over a year later,
the federal government has failed to adopt or implement the recommendations
emerging from the Roundtables.
The centrepiece of the National Roundtables
Advisory Group recommendations is the creation of a Canadian CSR
Framework that includes clear CSR standards for Canadian companies,
public reporting requirements, an ombudsman to receive and investigate
allegations of non-compliance, and sanctions in instances of serious
non-compliance.
Such a framework would be applied by
the federal government to condition its support to the private
sector on CSR compliance. The Special Representative supports this
principle of government support conditioned on CSR compliance,
and provides an example in the case of companies operating in conflict
zones:
“Home States could identify indicators
to trigger alerts with respect to companies in conflict zones.
They could then provide or facilitate access to information and
advice – whether from home or their overseas embassies – to
help business address the heightened human rights risks and ensure
they act appropriately when engaging with local actors. There may
be a point at which the home State would withdraw its support altogether.” --
Paragraph 49
The CSR Framework outlined in the Roundtables
Report takes a similar remedial approach prior to withdrawing support,
but would apply to all Canadian extractive sector companies operating
internationally, thus making the obligation stronger.
In designing the Canadian extractive
sector ombudsman office, it would be advisable for Canada to take
heed of the Special Representative’s six minimum qualities
of a credible, non-judicial grievance mechanism: legitimate, accessible,
predictable, equitable, rights-compatible, and transparent. Moreover,
any ombudsman office should have recourse to enact sanctions in
instances of serious non-compliance. Without these qualities, an
ombudsman office will be ineffective, since affected communities
will not see it as a practical avenue for recourse and redress.
Such has been the experience of affected
communities who have tried to lodge complaints with Canada’s
National Contact Point (NCP) under the OECD Guidelines for Multinational
Enterprises. The role of the NCP is so circumscribed in Canada
that it lacks any real powers of investigation or fact-finding.
In fact, it has led nowhere for those whose rights have been violated
by Canadian companies.
The Special Representative correctly
acknowledges, albeit diplomatically, the serious shortcomings of
the NCPs and the OECD Guidelines themselves. Unfortunately, the
report recommends only enhancing the NCPs and revising the Guidelines.
Given the very real shortcomings, this would do nothing to fulfill
the six “minimum qualities” outlined in the Report.
For Canada, the proposed CSR Framework, which includes an independent
ombudsman office and directly references the Universal Declaration
on Human Rights, is the best way forward in devising a non-judicial
grievance mechanism. Such an office could ultimately be given the
necessary stronger, quasi-judicial powers once established and
tested.
One of the clearest and most prescriptive
recommendations by the Special Representative relates to the human
rights obligations of export credit agencies (ECAs). He advises
that ECAs “should
require clients to perform adequate due diligence on their potential
human rights impacts.” This echoes recommendations from
the Canadian CSR Roundtables calling on Export Development Canada
(EDC) to apply the proposed CSR Framework to its clients. Sadly,
EDC recently released a statement on human rights that only pays
lip service to its human rights obligations and fails to require
client companies to perform human rights impact assessments. Export
Development Canada must not extend support to projects that will
have serious negative impacts on human rights or environmental
protection. Government action is necessary to amend the legislation
governing EDC to include human rights provisions, in order for
the crown corporation to uphold its obligations in this area.
Policy reforms that promote a corporate
climate of openness and accountability can facilitate the State’s
duty to protect human rights. The Special Representative speaks
highly of countries that have introduced mandatory reporting requirements
on CSR matters, including human rights. In addition, some jurisdictions
have clarified the definition of fiduciary duty for investors to
include taking into account environmental, social and corporate
governance factors. Once again, such regulatory changes were also
recommended to the Government of Canada in the CSR Roundtables
report.
A new mechanism that can be harnessed
in the business and human rights effort is the universal periodic
review process of the UN Human Rights Council. We strongly support
the recommendation for States to “include
information about business in their reports for the universal periodic
review,” and urge Canada
to include information on the extraterritorial impacts on human
rights of Canadian-based companies. When Canada submits its report
for the universal periodic review in 2009, we would expect to see
information on corporate impacts on human rights, both in Canada
and internationally. Particular attention should be paid to the
right of indigenous peoples.
Bilateral Investment Treaties (BITs)
The Special Representative notes that
markets work optimally when they are embedded with rules, customs,
and institutions – something that runs counter to current
economic globalization
Bilateral investment treaties (BITs)
are part of a growing trend within globalization, with 2,500 signed
worldwide and more appearing each day. As noted in the report, “these
treaties… permit foreign investors to take host States to
binding international arbitration, including for alleged damages
resulting from the implementation of legislation to improve domestic
social and environmental standards.”
Canadians have long documented how
this model, under the North America Free Trade Agreement (NAFTA),
has hindered the fulfillment of human rights. Moreover, NAFTA’s
Chapter 11 has demonstrated how – at the very core – this
type of protection for foreign investors has come at a cost to
ordinary citizens and their rights. In effect, these types of investment
rules grant rights to corporations over and above people’s
human rights.
As international binding treaties, BITs
can seriously inhibit the State Duty to Protect. Not only can corporations
sue governments over legislation that protects human or environmental
health, rulings are made by panels with no accountability and whose
decisions are binding. The end result, more often than not, is
that governments are obligated to pay public money to corporations
for alleged damages, despite the fact that they were working in
the best interests of their people. BITs can also create a “chill
effect” wherein governments, fearing the threat of a lawsuit
from foreign investors, refrain from considering or enacting new
legislation that would ultimately benefit people and may be necessary
to fulfill their international human rights obligations.
In certain respects, BITs have become “binding
legislation” entrenching corporate rights at the expense
of human rights.
BITs are part of a broader trend towards
free trade that, upon closer examination, appears skewed towards
facilitating corporate access and entrenching corporate rights
rather than promoting sustainable development and poverty eradication
or upholding human rights. While globalization has created a “governance gap,” it
also provides us with an opportunity to think in new and innovative
ways of how to ensure the primacy of human rights over and above
any guarantees granted to foreign investors. KAIROS urges the Special
Representative to further investigate how free trade impacts human
rights and the role that business plays.
Government working at cross-purposes
One of the biggest barriers to progress
on the business and human rights front is the fact that business
interests continue to trump human rights in the minds of many government
and business leaders and senior policy makers. In the words of
the Special Representative, “[the
business and human rights agenda] is often segregated within its
own conceptual and (typically weak) institutional box – kept
apart from, or heavily discounted in, other policy domains that
shape business practices, including commercial policy, investment
policy, securities regulation and corporate governance.” Canada
provides a textbook case of this.
The Special Representative decries the
resulting incoherence “where departments – such as trade, investment
promotion, development, foreign affairs – work at cross purposes
with the State’s human rights obligations and the agencies
charged with implementing them.” Take, for example, the
contrast between Canada’s promotion of mining investment
internationally and its complete inaction to date on the CSR Roundtables
recommendations. Over the past year, Prime Minister Stephen Harper
and (then) International Trade Minister David Emerson have criss-crossed
the globe to promote Canadian mining interests, from Chile, to
Tanzania, to Mongolia. Meanwhile, the Harper government continues
to delay the adoption of the CSR Framework. .
As the Special Representative rightly
points out, “[g]overnments
should not assume they are helping business by failing to provide
adequate guidance for, or regulation of, the human rights impacts
of corporate activities. On the contrary, the less governments
do, the more they increase reputational and other risks to business.” Canada
urgently needs to adopt the Roundtable Recommendations.
A troubling misstep
We are deeply troubled by the Special
Representative’s suggestion that States should more closely
align the activities of their export credit agencies with overseas
development agencies. The Report suggests that regions attracting
a given country’s trade and foreign direct investment should
also receive its overseas development assistance to help manage
the “large physical and social footprint” of such investments.
In other words, foreign aid could be inappropriately diverted to
clean up the social and environmental messes created by private
investment and trade.
Whether it takes the form of a community
development project alongside a large foreign-owned mining project,
or providing technical assistance in rewriting the country’s
mining code, Northern overseas development agencies have had a
poor track record in helping developing countries manage the negative
effects of their own country’s companies. More often, such
assistance is intended to deregulate relevant sectors of the economy
or “win the heart and minds” of local communities who
may oppose a particular private sector project on their territory.
Canada needs to ensure that its official
development agency focuses on poverty eradication and human rights
in the global South. This should be its primary goal. Under no
circumstances should our country’s foreign aid be tied to
the needs and priorities of Canadian exporters and foreign investors.
A job left to finish
KAIROS recognizes the important work
of the Special Representative to date. At the same time, we feel
that much more needs to be done in advancing the business and human
rights agenda internationally. . We are disappointed that the report
falls short of recommending specific legislative and policy changes;
changes that are urgently needed if countries are to uphold their
human rights obligations and companies given clear frameworks for
their human rights responsibilities.
KAIROS strongly recommends that the
Special Representative’s mandate be extended.
There is much to be done: further development
of the framework to include specific legislative and policy mechanisms,
review of case-studies of human rights abuses – broadly
understood - that are linked to corporate activity, how to prevent
such abuses and further investigation into the impact of free trade
on human rights and the role that business plays. In order to do
this with legitimacy, the Special Representative will need to seek
input from communities around the world who have been negatively
affected by corporate activities. This is best done by reviewing
specific cases of human rights abuses linked to corporate activity
to understand what mechanisms would be most effective in remedying
abuses and prevent similar incidents.
For more information contact: Ian Thomson, Corporate
Social Responsibility Coordinator, 1 877 403 8933 x229 ithomson
or
Rusa Jeremic, Global Economic Justice Program Coordinator, rjeremic
x225
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