Business is the major source of investment and job creation, and markets can be highly efficient means for allocating scarce resources. They constitute powerful forces capable of generating economic growth, reducing poverty, and increasing demand for the rule of law. Thereby they contribute to the realization of a broad spectrum of human rights. Nevertheless, these markets only work optimally when they are embedded within ruse, customs and institutions. Markets themselves require these to survive and thrive, while society needs them to manage the adverse effects of market dynamics and produce the public goods that markets undersupply. Indeed, history teaches us that markets pose the greatest risks - to society and business itself - when their scope and power far exceed the reach of the institutional underpinnings that allow them to function smoothly and ensure their political sustainability. The root cause of the business and human rights predicament today lies in the governance gaps created by globalization - between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences. These governance gaps provide the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation. How to narrow and ultimately bridge the gaps in relation to human rights is our fundamental challenge.
(Ruggie, J. G. (2013). Just business: Multinational corporations and human rights (Norton global ethics series). WW Norton & Company..
Principles and guidelines
In 1948, the General Assembly of the United Nations announced the Universal Declaration of Human Rights (UDHR) which covers 30 rights and freedoms. Among them are the right to freedom from torture, the right to free speech, education, life, liberty, privacy, social security and health. This declaration is a milestone in the history of human rights.
International Covenant on Civil and Political Rights (ICCPR) was adopted by the UN General Assembly in 1966. It guarantees the protection of civil and political rights and covers, among others, the prohibition of slavery and forced labour. The International Covenant on Economic, Social and Cultural Rights (ICESCR) was also adopted in that same year. Together with the ICCPR, it covers all human rights that were announced in the Universal Declaration of Human Rights and operates as a binding framework. The ICESCR includes the rights to work, to just and favourable conditions, to strike and many more.
In 2000, the United Nations Global Compact (UNGC) introduced the Ten Principles of the UN Global Compact. Their aim is to guarantee corporate sustainability by advising companies to operate in ways that meet fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption.
Updated in 2011, the OECD Guidelines for Multinational Enterprises represent the most comprehensive multilateral code of conduct for ensuring responsible business conduct (corporate social responsibility, short CSR). Chapter IV elaborates on the general human rights recommendation.
The UN Human Rights Council endorsed the UN Guiding Principles on Business and Human Rights in 2011. These guidelines help states and companies to prevent, address and remedy human rights abuses committed in business operations.
In order to help the private sector to respect human rights in Switzerland and abroad, the Federal Council published a report on the Swiss strategy for the implementation of the UN Guiding Principles on Business and Human Rights in 2016.
Although there have been many developments in the indicators, ratings and indices regarding business and human rights, measuring the respect of human rights by corporations is not an easy task. In his article, Damiano de Felice (2014) offers an overview of the most important measurement initiatives and draws attention to the challenges and opportunities that can arise.
In 2018, United Nations Global Compact released a report on insights and initiatives by Global Compact Local Networks that are advancing the UN Guiding Principles on Business and Human Rights. The report ends by advocating for more holistic action when it comes to human rights. Also, companies need to proactively manage potential and actual adverse human rights impacts, provide just and effective remedies and involve affected stakeholders throughout the decision-making process.
According to the conclusions and recommendations of the 2018 report of the Working Group on Business and Human Rights, very little has been done in terms of states fulfilling their obligation under Guiding Principle 4 and that generally much remains to be done regarding the implementation of the Guiding principles.
In 2019, the OECD’s Ministerial Council Meeting published a report which addressed the need for more support and resources from governments for the National Contact Points (NCPs). NCPs are government-supported offices that promote the OECD Guidelines for Multinational Enterprises and help ensure responsible business conduct.
As the G20 Summit in Osaka in 2019 approached, the United Nations Working Group on Business and Human Rights called upon G20 countries to fulfil their commitments and fully implement the UN Guiding Principles on Business and Human Rights in this statement.
Much has been achieved over the past decades as many guidelines, principles and initiatives have been put in place. However, for many businesses it is still not in their interest to assure the protection of human rights, hence, the importance to ask: how to better align business interests and human rights?