What if every product you buy was required to come with a label that said, ‘WARNING! This product or its parts may have been produced in a facility or extracted from an area known for human rights abuses’, unless the manufacturer could prove its supply chain was devoid of unethical practices?
Human Rights labelling of products as a consumer’s “Right to Know” was one of several ideas put forward at a conference hosted by George Washington University, the UN Global Compact US Network, and the US Institute of Peace last month that brought human rights advocates, practitioners, and academics together to discuss how companies are implementing the Guiding Principles on Business and Human Rights (the GPs).
One of the overarching questions raised by the conference organiser, Professor Susan Ariel Aaronson, Ph.D., was how governments could promote business uptake and implementation of the GPs, in addition to fulfilling their own responsibilities to protect human rights through regulation.
One delegate, presenting on her company’s efforts to address Human Trafficking, noted that the US State Department had asked the company to sign onto the Code of Conduct for the Protection of Children from Sexual Exploitation in Travel and Tourism. While the GPs are voluntary and are currently not set up to receive signatories, a request from a government body for a company to sign on would likely not go unheeded, especially as the GPs do not contain specific performance requirements on human rights. What about positive incentives? Could the State Department extend its Corporate Excellence award to include a category for corporate leadership on human rights, for example?
Other ideas included incorporating the GPs into government procurement guidelines to make implementation of the GPs a requirement for federal contracting; creating incentives through bilateral and multilateral trade agreements; establishing disclosure laws in line with the California Supply Chains Transparency Act or SEC filing rules like Dodd-Frank Section 1502 to mandate disclosure of whether and how companies are identifying human rights risks and undertaking human rights due diligence in their operations; and, more controversially, developing a Foreign Human Rights Abuses Act, mirroring the Foreign Corrupt Practices Act with sentence or fine reductions for companies having implemented a ‘culture of human rights’ to include human rights due diligence, reporting, and grievance mechanisms similar to US sentencing guidelines on corporate ethical misconduct (just replace the terms “compliance and ethics program” with “human rights program”, and “criminal conduct” with “human rights abuses” – it works quite well).
Questions around methods and resources for enforcement, monitoring, and verification naturally abounded and most participants agreed that more regulation was not the answer. Instead, policymakers can play a role in raising awareness about the GPs through providing tools, conducting trainings, and establishing public-private-partnerships directly with companies or through industry associations. In fact, the European Commission is doing just that. The EC recently announced that it will support the “development of sector-specific guidance on the corporate responsibility to respect human rights” as well as “work to build the capacity of small and medium-sized enterprises in the field of human rights” through partner organisations.
The announcement is in line with the EC’s relatively new policy on corporate social responsibility, which acknowledges that “human rights…have become a significantly more prominent aspect of CSR” and “expects all European enterprises to meet the corporate responsibility to respect human rights, as defined in the UN Guiding Principles”. Under the policy, EU Member States are invited, but not required, to develop national plans for the implementation of the GPs by the end of 2012.
Will other governments adopt similar measures to promote the GPs? Professor Aaronson will shortly publish a policy brief on how policymakers can develop incentives to encourage firms to implement the GPs that, in the right hands, may help move the needle of corporate accountability in the “rights” direction.