Business and human rights: implementation challenges
Chapter 3
Business and human rights
For most corporations, a systematic engagement with human rights is new territory. According to a report published by the Economist Intelligent Unit in 2015, the biggest current barrier in addressing human rights is the lack of understanding about what human rights responsibility entails for corporations. The report’s survey of 853 senior corporate executives shows that despite a strong consensus on the relevance of human rights for business, the actual implementation presents a significant challenge.1 This chapter focuses on these challenges from a conceptual and practical perspective.
In corporate practice, human rights are typically subsumed under what is termed ‘Corporate Social Responsibility’ (CSR) or ‘Corporate Sustainability’. However, the academic debate on business and human rights (BHR) has developed largely independently from the more popular concept of CSR.2 The CSR concept has evolved substantially over the past decades and has taken on different meanings in the United States (US) and Europe.3 Particularly in the US, CSR has long emphasized philanthropic giving, community service and marketing.4 BHR and some European concepts of CSR, in contrast, are more focused on where companies derive profits and how core operations affect human rights, particularly in places where states are not protecting the rights of their own people. The contribution of Florian Wettstein illustrates the more ambitious European perspective on CSR. He shows that the BHR concept, while distinct from CSR, could also profit from, for example, CSR’s focus on company culture and values.
Some forward-looking companies are beginning to address human rights issues by aligning their organizational structures and procedures with their human rights commitment. Drawing on over 20 years of experience in the senior management team at General Electric, Ben W. Heineman Jr. outlines what it takes to create a culture of integrity that enables systematic respect for human rights. Christine Bader complements Heineman’s institutional perspective by outlining typical challenges faced by individuals who are charged with the management of human rights in corporations.
To explain why addressing human rights makes good business sense for corporations, John Morrison outlines the concept of ‘the social licence’, while Rachel Davis and Caroline Rees outline the concept of ‘saliency’. Both concepts show that ignoring human rights can be costly for corporations and ‘salient’ human rights risks are therefore also material business risks.
Notes
1 The Economist Intelligence Unit, ‘The Road from Principles to Practices: Today’s Challenges for Business in Respecting Human Rights’, The Economist, 16 March 2015, www.economistinsights.com/business-strategy/analysis/road-principles-practice.
2 See F. Wettstein, ‘CSR and the Debate on Business and Human Rights: Bridging the Great Divide’ (2012) 22(4) Business Ethics Quarterly 739.
3 D. Matten and J. Moon, ‘“Implicit” and “Explicit” CSR: A Conceptual Framework for Understanding Corporate Social Responsibility’ (2008) 33(2) Academy of Management Review 404.
4 A.B. Carroll et al., Corporate Responsibility: The American Experience (Cambridge: Cambridge University Press, 2012).
Section 3.1
From side show to main act: can business and human rights save corporate responsibility?
1 Introduction
The idea of corporate social responsibility (CSR) has been around for some time. Howard Bowen’s 1953 book Social Responsibilities of the Businessman1 is generally seen as the first systematic engagement with the responsibilities of business to society.2 However, despite the long history of CSR and the plethora of different interpretations and definitions that the discussion has produced over the years, the idea has proven surprisingly resistant towards human rights as a possible focus area.
The role of foreign multinationals in apartheid South Africa may have been the first major catalyst for questions about the human rights impact of business on a broader scale and inspired numerous works dealing with the subject.3 However, while apartheid did eventually trigger a broad debate on divestment and the role of business in countries with authoritarian and oppressive governments, it did not spark a systematic debate concerning the relationship between business and human rights (BHR) in general because the doctrine of state-centricity in human rights matters was too rigid and too firmly established.4 It took 20 more years for that doctrine to weaken and a systematic debate on the role of business in relation to human rights to emerge. The killing of Nigerian playwright and activist Ken Saro-Wiwa by the Abacha government, with alleged involvement and support of the oil giant Royal Dutch Shell, is commonly seen as the tipping point that triggered the debate.5
Interestingly, the debate on BHR that emerged during the 1990s evolved largely in parallel to the established debate on CSR.6 Apart from some overlaps, for example in regard to sweatshop and child labour issues,7 the debate was largely focused on legal arguments and driven by legal scholars, which may have moved the discussion outside the core competencies of CSR scholars. The debate started to become more diverse only recently with the inception of the mandate of the United Nations (UN) Special Representative for Business and Human Rights (SRSG), John Ruggie, in 2005 and the subsequent publications of his two major reports: the UN ‘Protect, Respect and Remedy’ Framework for Business and Human Rights8 and the UN Guiding Principles on Business and Human Rights9 (Guiding Principles).
The aim of this chapter is to reflect on the rise of BHR against the background of existing conceptions of CSR, on their differences and commonalities and, most importantly, on the potential for a closer integration of the two. BHR is seen as an important step beyond CSR, but CSR also has lessons for BHR.
Snapshot
Shell in Nigeria10
On Tuesday, 31 October 1995, Nigerian playwright and minority-rights activist Ken Saro-Wiwa, along with eight of his followers, were sentenced to death by a specially convened tribunal of the Abacha regime in Nigeria. Saro-Wiwa was spearheading widespread protests against exploitation and environmental degradation by oil companies in the Ogoni land. Protests against the environmental destruction caused by oil companies had been growing throughout the Niger Delta since the 1970s. The most devastating of such protests occurred in January 1993. It was silenced violently by government forces, resulting in the destruction of countless villages, displacing tens of thousands of Ogoni villagers, and leaving some 2,000 people dead. The trial against Saro-Wiwa and his colleagues was widely condemned. Key witnesses had been bribed and the charges were perceived as fabricated. As a consequence, Shell also came under attack for its alleged complicity in the campaign against Saro-Wiwa. It was alleged that Shell had requested police interventions against protesters and many thought that the company, given its powerful position in the country, had a responsibility to denounce the arrest of Saro-Wiwa and to press for his release. However, Shell commented that it was not appropriate for a private company to become involved in Nigerian politics. In his closing statement to the tribunal, Ken Saro-Wiwa asserted that Shell’s operations in the Delta would be called into question sooner or later and that the company’s day in court would surely come. Saro-Wiwa’s statement proved visionary. Not only was he correct about future litigation against Shell, but he also anticipated a future in which corporations in general would increasingly be held accountable for their involvement in human rights violations – a domain that, at the time, was widely thought to be relevant only for governments.
2 Differences at the normative level: the language of rights and its ethical implications
One may not readily see the difference between BHR and CSR; in fact, one may perceive them as addressing largely the same thing, just using different language. BHR, from that point of view, could be interpreted as a subset of CSR, specifically concerned with those social responsibilities that affect human rights. However, a closer look at the two concepts reveals that the differences cut deeper than mere semantics. The semantic differences expressed through the language of rights point to more fundamental differences concerning the ethics underlying the two concepts.
One attribute that has characterized many interpretations of CSR to this day is the perceived voluntarism of such activity. In 2006, the European Commission denoted CSR as ‘fundamentally voluntary business behavior’.11 While this perceived voluntarism can be interpreted in a strictly legal sense – simply as those responsibilities that companies adopt on a voluntary basis beyond the law – it often is equated also with moral discretion. The legal interpretation would see as voluntary whatever is not legally required. A moral interpretation, however, would see it as optional also in a moral sense: the adoption of responsibility beyond the law may be desired and admirable, in some cases perhaps even expected, but hardly a ‘must’ for companies; that is, we cannot blame them for not taking action to ensure compliance with human rights standards. Early CSR approaches, which frequently equated the social responsibility of business with the charitable donation of some of a company’s profits to social causes,12 were prone to endorse such discretionary views of CSR. While this view has become less pervasive, it has not disappeared entirely.13 ‘Too much of the time when we think about … corporate responsibility’, as Sandra Waddock and Neil Smith suggest, ‘we think about it as a discretionary responsibility.’14
Moral voluntarism of this sort does not sit well with a focus on human rights issues. The language of rights is also the language of obligation. Rights and obligations are two sides of the same coin, for otherwise the idea of a right as a particularly strong normative claim would be empty and meaningless. However, the very notion of an obligation conflicts with the perceived voluntarism of CSR, since it expresses ‘something we conceive as imposed upon our inclinations, something we must do whether we want to or not’.15 Thus, while CSR is often seen to deal with the supererogatory part of morality, that is, with those moral actions that lie beyond the call of duty, human rights responsibility deals with what we owe to each other in a morally obligatory sense.
Reducing BHR to a subset of CSR and thus applying this moral voluntarism to it may prove momentous from both a conceptual and a practical perspective. Conceptually, it will inevitably reduce human rights responsibility to mere acts of corporate goodwill. Shifting human rights from the domain of owed obligation into the domain of supererogatory moral discretion threatens to undermine the very core of what human rights aim to protect: the unconditional and equal dignity of all human beings. This is also of practical relevance: it results in public indifference towards corporate human rights conduct; it leads to corporations selectively meeting human rights standards based on economic incentives (the so-called ‘business case for human rights responsibility’16); and it promotes hands-off public policy, which sees little need to hold companies accountable for their human rights impact.
3 Differences at the institutional level: bringing governments and the law back in
The difference between BHR and CSR at the normative level also translates into differences at the institutional level, particularly with respect to the role of government and the role of the law.
3.1 The role of government
There is a distinct difference in the ways that CSR and BHR respectively conceptualize the relationship between corporate and governmental responsibility. Conventional understandings of CSR commonly presuppose, at least implicitly, a functioning and well-ordered state as a background condition.17 Because of this assumption, CSR commonly tends to adopt an isolated view of the corporation without having to engage extensively with the role of the state. That is, it defines corporate responsibilities largely without reference to the respective responsibilities of the state. Thus, conventional conceptions of CSR rely on a rather traditional separation of the public and private domains.18 While the state organizes the public domain, companies and their respective social responsibilities are located squarely in the private realm.