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March 30, 2011
Guiding Principles on Business and Human Rights are Published
    by Robert Kropp

Professor John Ruggie, the UN Secretary-General's Special Representative for Business and Human Rights, provides a common platform for adoption of the Protect, Respect and Remedy Framework by states, business, and victims of human rights violations.

Following a consultation process that dates back to 2005 at least, Professor John Ruggie, the UN Secretary-General's Special Representative for Business and Human Rights (UNSRSG), has published Guiding Principles on Business and Human Rights.

The document, which seeks to provide guidance for implementation of the Protect, Respect and Remedy Framework of 2008, will be presented by Ruggie to the UN Human Rights Council for formal endorsement in June.

The Framework "rests on three pillars: the state duty to protect against human rights abuses by third parties, including business, through appropriate policies, regulation, and adjudication; the corporate responsibility to respect human rights, which means to act with due diligence to avoid infringing on the rights of others and to address adverse impacts that occur; and greater access by victims to effective remedy, both judicial and non-judicial."

The Guiding Principles, published on March 24th, "Will not bring business and human rights challenges to an end," Ruggie wrote. "But it will mark the end of the beginning: by establishing a common global platform for action, on which cumulative progress can be built, step-by-step, without foreclosing any other promising longer-term developments."

In a press release, Rev. David Schilling, the director of human rights for the Interfaith Center on Corporate Responsibility (ICCR), stated, "This global framework is a significant breakthrough and an indispensible resource for investors in assessing the human rights performance of companies and supporting greater accountability and transparency, not only in their own operations but in their supply chains." According to the press release, ICCR members have participated with Ruggie in consultations since 2005.

Schilling spoke with about the implications of the Guiding Principles.

"In the first few months of Professor Ruggie's tenure, a small group of ICCR members met with him and laid out some of the work we've been doing with companies on human rights, getting them to adopt policies," Schilling said. "There have been 47 consultations that have taken place in the last six years." Some of the issues addressed by ICCR members in those consultations include the importance of human rights impact assessments, as well as transparency and disclosure.

"One of the challenges for companies is to take leadership in a particular area when they look at their competitors and what they are doing," Schilling said. "Businesses can move farther and faster on these issues if there are clear guidelines and tools which can be applied to systems they have in place, stakeholder engagements, and community initiatives."

The successful involvement of sustainable investors in the consultations can be found in the report's emphasis on the importance of human rights policies and practices in the supply chains of multinational corporations. While conducting due diligence for human rights impacts across all suppliers in a corporation's supply chain may be "unreasonably difficult," it states, "Business enterprises should identify general areas where the risk of adverse human rights impacts is most significant, whether due to certain suppliers' or clients' operating context, the particular operations, products or services involved, or other relevant considerations, and prioritize these for human rights due diligence."

"It's important that the report addresses the issue of supply chains," Schilling said. "Although it doesn't prescribe, its primary focus on the human rights due diligence process—adopt a policy, assess impacts in great depth, and communicate responses—is a template that can be utilized, and has been utilized, by companies for their supply chains."

"The further you get from primary business relationships, the more often you find serious abuses," Schilling added. As an example of such abuses, Schilling described slave labor conditions in Brazil's pig iron industry, which provides materials to auto makers and other manufacturers of steel products.

"It's not a direct relationship with an automotive company or a steel company," he observed. "It may be six or seven steps away. But the product makes its way into the supply chains of all the users of steel. The Principles expect that companies will do more to address these issues, by knowing what the human rights risks are in their supply chains and by showing in their reporting what they're doing."

Another important indicator of the involvement of sustainable investors is the reference in the report to the inclusion of human rights issues in financial reporting. The report states, "Financial reporting requirements should clarify that human rights impacts in some instances may be material or significant to the economic performance of the business enterprise."

Schilling said, "This is a point that is absolutely critical to the investment community. The framework will help investors look at what material risks are in the human rights space. It provides the beginning of a global framework for investors to measure how a company is doing in relation to its peers on establishing human rights due diligence processes, and how they are implementing and communicating those processes."

"ICCR members see this as risk mitigation," he continued, "But we also want to know as a result of this how conditions are improving in factories, in farms, on the ground, and in communities; and if violations do occur, that remediation happens swiftly, and they are prevented from happening again."

"I think the investor community really has to get on this," Schilling said. "We're catalysts for embedding the Guiding Principles into business practice. There are disagreements as to whether this report is sufficiently mandating, and this debate is going to continue. For us, the benchmark is whether this documents leads to the development by the business community of the tools that improve human rights and the respect for human rights."


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