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Human Rights Watch Calls For Binding International Agreements and Actions on Corporate Social Responsibility

Human Rights Watch World Report 2006

The Human Rights Watch World Report 2006 contains information on human rights developments in more than 60 countries in 2005. The new report includes an outstanding essay by Lisa Misol, researcher with the Business and Human Rights Program at Human Rights Watch.

Private Companies and the Public Interest
Why Corporations should Welcome Human Rights Rules By Lisa Misol

In this essay the author starts by stressing that, "For most corporations, having clear, consistent rules would be preferable to being subjected to unfair competition and a confusing mix of standards that provides little guidance to companies and little comfort for victims of human rights abuse. This essay argues that enforceable global standards are desirable, inevitable, and, contrary to received wisdom, good for business."

The author provides an extensive and compelling analysis and, in so doing, highlights the roles that rogue companies play and why it is especially important that approaches be put in place that serve the overwhelming majority of corporations that strive to take a constructive approach to human rights. The following is the concluding key section of the essay:

The Way Forward

" Social responsibility is not the first issue for which corporations have begun to recognize the advantage of enforceable standards with broad reach. A similar dynamic emerged after the U.S. government’s adoption in 1977 of the Foreign Corrupt Practices Act, which made it illegal for companies operating in the United States to bribe foreign officials. The U.S. law was adopted in the wake of a domestic corporate scandal but, once in place, put U.S. companies at a competitive disadvantage because their foreign competitors remained free to continue securing business through bribery. In response, U.S. firms pressed for—and got—a multilateral treaty to even out the competitive environment.

" After years of complaints, the Organization for Economic Cooperation and Development (OECD) in 1997 adopted a treaty requiring all its member states to criminalize such bribery. The OECD’s thirty members account for some two-thirds of the world’s goods and services and 90 percent of global private capital flows. China remains outside the treaty, but as its companies increasingly operate overseas its exclusion will become legally less tenable.

" The OECD already has set out corporate social responsibility standards. Its Guidelines for Multinational Enterprises have been endorsed by a total of thirty-nine countries, including nine non-OECD members. The adhering countries are home to ninety-seven of the world’s top one hundred multinational companies. The OECD Guidelines are voluntary but do have an implementation process run by governments, and are widely used to judge corporate conduct. For example, a U.N. expert panel publicly chastised a number of Western companies operating in Congo for failing to comply with the OECD Guidelines. In addition, NGOs have lodged formal complaints against some of these companies under OECD procedures.

"OECD member countries, following on the anti-bribery effort, should move to make their CSR standards binding. They should adopt a treaty under which they agree to enact laws similar to the OECD Guidelines that would be enforceable under national criminal or civil codes, carrying penalties such as fines or, in extreme cases, imprisonment. Like anti-bribery laws, this national legislation would bind any company operating in that nation’s jurisdiction.

"In addition, the United Nations, which has already drafted non-binding norms on corporate conduct, might provide a forum to negotiate a universally applicable treaty. U.N. discussions on business and human rights have tended to be highly polarized, but a new approach may emerge. In 2005 the United Nations’ human rights body launched a two-year process to examine these issues. The Commission on Human Rights created a mandate for a high-level expert, appointed in July 2005 by the U.N. Secretary-General, to raise awareness of the human rights responsibilities of companies, look at the tough issues that have blocked progress to date, and map a way forward. An advantage of this U.N.-led process is that it is explicitly focused on human rights and brings together governments, companies, and concerned civil society groups from around the world.

"The U.N. mandate—if focused appropriately—has the potential to move beyond a purely voluntary approach toward effective human rights protection that combines elements of voluntarism with enforcement potential on core rights issues. It carries risks as well. Unless human rights are taken as the point of departure, the process could degenerate into a consensus around weak “standards” that are lower than those derived from human rights law and principles.

"Though any such agreements or treaties will take time, it is crucial to begin to move down that road. The next few years offer a valuable opportunity to break the current impasse on the corporate accountability debate. Already, many corporations are engaged with other stakeholders in various processes to debate and refine CSR standards. These companies are working on several fronts to develop CSR standards and widen their application within and across different industries.

"Given the momentum behind the CSR movement, the continuing proliferation of different standards, and the problem of an unequal playing field, it is clear that business has a vital interest in helping to define human rights norms. By doing so, it can help ensure that the resulting requirements are clear, practicable, and fair. Industry also has a direct stake in seeing that these requirements are applied to all companies, regardless of where they are based, and that they are effectively implemented and enforced. Ultimately, that means making the rules universal and mandatory.
Sometimes it pays to take the initiative. For hard-headed businesspeople, the smart move is to face up to global human rights standards early and make them work by making them stick."

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Links to Some of the Most Active NGOs Engaged in CSR

  • Business and Human Rights Resource Centre
    Updated daily website highlighting news and developments of important issues relating to business and human rights; Website includes reports of corporate misconduct, as well as positive examples of "best practice" by companies.

  • Business for Social Responsibility
    BSR is a global organization that works with its member companies on a broad array of key organizational ethics and governance issues.

  • The Caux Round Table
    CRT is an international network of business leaders working to promote a "moral capitalism". The CRT advocates implementation of the CRT Principles for Business.

  • The Corporate Library
    The Corporate Library is an independent investment research firm providing corporate governance data, analysis & risk assessment tools.

  • Corporate Responsibility Index
    The Corporate Responsibility Index is a strategic management tool to enhance the capacity of businesses to develop, measure and communicate best practice in the field of corporate social responsibility. It does this through benchmarking corporate social responsibility strategy and implementation process across the four key impact areas of community, workplace, marketplace and environment.

  • Corporate Social Responsibility Initiative
    The Corporate Social Responsibility Initiative at the Harvard University Kennedy School of Government is a multi-disciplinary and multi-stakeholder program that seeks to enhance the public role of private enterprises.

  • EthicScan
    EthicScan Canada Ltd is a synthesis of three different services – an ethics consultancy, Canada's first corporate social responsibility research house, and a clearinghouse or resource centre for consumer and corporate ethics.

  • European Business Ethics Network - UK
    EBEN-UK was established in 1994 as the UK association of the European Business Ethics Network. Its purpose is to provide a forum for academics and practitioners to discuss and debate issues to do with business ethics / corporate social responsibility.

  • The Global Reporting Initiative
    A multi-stakeholder process and independent institution whose mission it is to develop and disseminate globally applicable Sustainability Reporting Guidelines.

  • International Business Leadership Forum is a is an international non-profit organisation set up in 1990 by HRH The Prince of Wales and a group of chief executives of international companies, in respc growth and change in the global economy.

  • Sustainable Business
    Website that focuses on environmental issues in business; Provides information for the “Progressive Investor” (a socially responsible and “green” investor).


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