Reflections on the state of business and human rights

For many years, Human Rights Watch has investigated situations where companies have had serious human rights problems. Whether it is an oil company that relies on abusive state forces or have abusive private security forces, a construction company that mistreats its workers or a technology company that censors or spies on users at the behest of an abusive government, there are many situations where companies can directly impact human rights.

A decade ago, few companies recognized their human rights responsibilities, but today no sophisticated company denies them. In the last year, those responsibilities were recognized by the United Nations when it approved the UN Guiding Principles on Business and Human Rights. The UN Principles have flaws, but demonstrate that the international community firmly believes that businesses have human rights responsibilities.

There has been a dramatic increase in multistakeholder mechanisms to ensure companies or business activity accounts for human rights over the last few years. The Voluntary Principles on Security and Human Rights provide standards for the extractive industries. The Fair Labor Association monitors the conduct of apparel and footwear companies to protect workers. And the Global Network Initiative monitors technology companies to ensure that they protect free expression and privacy online. These and other efforts show that businesses can address human rights, but they are still voluntary measures for companies that choose to follow them. That needs to change.

Governments have the ultimate responsibility to regulate on their own and through international institutions like the World Bank Group who lend to both companies and for government-supported ventures. One interesting development is human rights and governance reporting requirements through securities regulation. Under the Dodd-Frank financial reform act in the United States, publicly listed extractives companies will have to disclose how much they pay to resource rich governments to inject much needed transparency into that sector. Europe may soon follow with similar rules.

Companies will also have to start disclosing whether they are sourcing “conflict” minerals from the Democratic Republic of Congo in 2014 under Dodd-Frank. Sadly, industry organizations are suing to try to stop these efforts. We hope that this is the beginning of an evolution towards mandatory human rights due diligence for companies as part of their obligations to shareholders.

If the last decade was about recognizing that companies have human rights responsibilities, then the next few years should be about enacting new rules that require companies to live up to those responsibilities.

Author: Arvind Ganesan is Director of the Business and Human Rights Division at Human Rights Watch.

Image: The reflection of a business man is seen as he walks down a flight of stairs in Tokyo REUTERS/Yuriko Nakao