February 22, 2006
Defining Corporate Complicity in Human Rights Abuses
by Bill Baue
Business and Human Rights Seminar report maps the landscape of corporate complicity in human rights
abuses, and addresses the dichotomy of mandatory laws versus voluntary codes.
Researching and clarifying corporate complicity in human rights abuses is one of five mandates
charged to Harvard Professor John Ruggie in a July 2005 appointment as
Special Representative of the United Nations (UN) Secretary-General on Human Rights and
Transnational Corporations. Helping move this agenda forward in London in December 2005 was the
convening of the third annual Business & Human
Rights Seminar, organized by the steering committee made up of Amnesty International, Business Leaders Initiative on Human Rights, One World Trust, The Prince of Wales International Business Leaders Forum, Respect, and TwentyFifty Limited. Last week saw the release of a report summarizing
the proceedings entitled Exploring Responsibility and Complicity, the theme of the event.
"In terms of complicity, John Ruggie sees the clearest judicial definition as being
rendered by the US Court of Appeal for the
Ninth Circuit, in the Unocal case," writes Matt Shinn in the report. The Alien Tort Claims Act
( ATCA) case referred to was brought by 15 Burmese villagers alleging that Unocal (ticker:
commissioned Burmese soldiers to protect its Yadana gas pipeline knowing they committed murder,
rape, and forced labor. "That ruling stated that complicity involved three things: practical
assistance being given to the perpetrator; assistance having a substantial effect on the commission
of the criminal act, and finally the knowledge criterion."
"But the decision was vacated
because the parties settled the dispute, and so it has no current legal standing," Mr. Shinn
continued, summarizing Prof. Ruggie's comments. "It will require another court to take it up and
reach similar or different conclusions before we know how much can be built on this edifice."
The report notes that ATCA cases against companies for complicity (if not direct involvement)
in human rights abuses number 36, with three (including the Unocal case) settled out of court, 13
ongoing, and 20 dismissed.
"So ATCA has been an important instrument, but it is clumsy,
costly and uncertain for all parties,'" said Prof. Ruggie.
Other Seminar participants
advanced different modes of defining corporate complicity in human rights abuses, using actual
incidents to illustrate the dynamic. For example, Amnesty International Secretary General Irene
Khan cited the cases of Yahoo (YHOO) revealing the identity of
journalist Shi Tao to Chinese authorities, and Chevron (CVX) quelling a protest by calling
on Nigerian Joint Task Force soldiers, who killed one demonstrator.
"[T]hese are two cases
where the state clearly had the primary responsibility and obligation to protect human rights, but
it also shows the kind of complicity issues we are talking about, when a company itself does not
commit an abuse, but benefits from an abuse committed by someone else, remains silent in the face
of the abuse, or assists, aids and abets the state in committing abuse," Ms. Khan said.
Several participants addressed the issue of whether mandatory laws or voluntary corporate codes
are most effective for upholding human rights.
"[T]his is not an either-or situation . . .
[m]andatory approaches focus on setting minimum standards, while voluntary codes focus on raising
the bar," said Peter Sutherland, chair of BP (BP) and Goldman Sachs (GS). "The argument
that it has to be mandatory presupposes a lack of integrity in the internal systems."
"When we [at BP] sign up to voluntary initiatives, we in effect make them mandatory within the
company," he continued. "I'm not saying it's not a good thing to have mandatory standards: in many
cases it is . . . Progressive businesses fully support mandatory approaches, provided that they are
reasonable and not anti-competitive, because they create a level playing field and prevent abuses."
Paul Watchman, a partner at global law firm Freshfields Bruckhaus Deringer who authored an
important recent report on
fiduciary duty and socially responsible investing (SRI), believes that the dichotomy between
mandatory and voluntary approaches has been exaggerated.
"There's a need for both, but in
some instances the mandatory can diminish what's happening in the voluntary area, and if the legal
process is not rigorous and robust enough you can, as with UK environmental law, end up with
low-level enforcement, low-level fines, and the real progress is made through persuasion and
conciliation rather than prosecution," he said.
Mary Robinson, honorary chair of the
Business & Human Rights Seminar, noted that this year's event represented a dismantling of another
"In previous years there was a tendency to think of two different camps--the
business sector and NGOs [nongovernmental organizations]--even if there was a willingness to reach
across," said Ms. Robinson, who announced a shift to more frequent regional Seminars starting next
month in Johannesburg. "This year there's a strong sense of one unified camp, in which there were
different perspectives, with a greater sense of respect for the fact that businesses and NGOs
increasingly work together, constructively and appropriately."
However, she also drew
attention to stakeholders left out of this equation.
"The representatives of local groups,
such as the slum dwellers of Mumbai, have the perspective that business is definitely part of the
problem, that it's very hostile to them, undermining their livelihoods and habitat, is responsible
for large displacements, and is complicit with governments that are also not safeguarding their
interests," she said. "So in this progressive environment we might have too rosy a view: if you're
very poor and marginalised in your own country, you probably don't have a very pleasant view of