Brev av s. XXX

Professor dr. juris
Ola Mestad
Centre for European Law/
Department of Petroleum and Energy Law
University of Oslo
and
Senior Global Research Fellow
NYU School of Law / Oslo, 22.01.11
Postboks 6706 St. Olavs plass
0162 Oslo
Telefon (+ 47) 22 85 93 76
Telefax (+ 47) 22 85 96 10
e-post:
Professor John Ruggie

COMMENTS TO

DRAFT GUIDING PRINCIPLES FOR THE IMPLEMENTATION OF THE UNITED NATIONS ‘PROTECT, RESPECT AND REMEDY’ FRAMEWORK

I take the opportunity to comment on the draft that has been posted for comments until 31 January 2011.

GENERAL COMMENTS

The draft is a good development from the ‘Protect, Respect and Remedy’ framework. The three most important features are, in my opinion,

1) the balancing and distinction between the state tasks and duties and the companies’ role,

2) the emphasis on remedies which is highlighted through it being a separate part of the Guiding Principles, and

3) the development of and emphasis on the Human Rights Due Diligence that companies have to undertake.

The Human Rights Due Diligence (the HRDD) is a measure that directly aims at preventing human rights violations. That is an important difference from regimes which seek to prevent violations indirectly through sanctions that apply only after a violation has taken place.

My comments are intended to improve the Guiding Principles based on accepting the underlying policy decisions, as I understand them.

Structure of the Guiding Principles

The Guiding Principles (the GPs) have a complicated regulatory structure in several respects. They are divided in four parts even if you would have expected three parts since that is the structure of the framework. This could be remedied by having an introductory text that is not numbered as a separate part.

Each of the substantive parts has foundational principles as well as “ordinary” principles. Part II and III each have two foundational principles. That weakens the communication of the foundational principles, especially since the commentary text comes between the text of the principles.

With respect to part II, this could be improved if GP 1 and 2 were written together as one provision covering the legal obligations of the state as well as its policy obligation towards companies. Part III is somewhat more difficult because GP 12 has an extensive text. In my opinion, it would be better if the first paragraph of GP 12 was written together with GP 13, and the provisions on the scope of application of GP 12 (litra a – c) were included as parts of a new GP 13. Writing together GP 12 and 13 would demonstrate more clearly the responsibility and the most important way of handling it. And the scope of application parts of GP 12 (GP 12 litra a – c) are more technical than foundational.

The separate section B, containing definitions, is unnecessary. The five definitions of business enterprise, corporate, human rights risks, grievance and grievance mechanism should all be included in the commentary. That would make it easier to read the GPs. The definition of “internationally recognized human rights” is also just a clarification of the content of GP 12.a (which I suggest should be moved to 13). That definition could either be moved to the commentary to GP 12.a or included in the text of GP 12.

It is a good idea to have the commentary to the principles following directly on the text of each principle. But in some parts of the commentaries, the text overlaps too much with the text of the actual provisions.

COMMENTS TO THE INDIVIDUAL PRINCIPLES

To GP 1 and 2

When setting out States’ obligations, in both provisions, the wording “their territory and/or jurisdiction” is used. This relates to the difficult issues of so-called extraterritoriality. It would be good if the issues were clarified as far as possible. GP 1 concerns the difficult issue of states’ legal obligations and should keep the expression. In GP 2 which regulates encouragement, it should be stated “in their territory”, only. The logic of the principle is that the state where the company is domiciled should do the encouragement. Then the activities could be elsewhere, either within the state’s territory or jurisdiction or in other territories and jurisdictions.

The commentary to GP 2 on extraterritoriality also relates to GP 1, as far as I can understand. That is also an argument for merging those two principles into one provision. Another minor point is that the commentary only talks about issues of extraterritoriality but the wording of GP 2 itself surely also covers activities in the home country. The expression “their global operations” must mean the whole range of operations in all countries?

In the second last paragraph of the commentary to GP 2, it is referred to “their treaty obligations”. That should be clarified through an example. Does it refer to human rights conventions, or for example, to the UN Convention on corruption and similar treaties which require criminalization of violations?

To GP 12

As mentioned above, the foundational principles of GP 12 and 13 should be restructured.

It is positive that the sphere-of-influence concept is not used in the provision.

The wording of GP 12 refers to the “eight International Labor Organization core conventions”. Only insiders understand what this refers to as it stands now. The content of the ILO core conventions on association freedom and collective bargaining, forced labor, child labor and discrimination should be mentioned in the commentary with a reference to the conventions.

Issues of corporate groups are mentioned in the commentary. What is said is unclear. I would think that under all circumstances all the separate corporate entities within a corporate group would have to respect human rights. But the corporate group itself may choose to have a common policy on respect for human rights which would take care of the issues on behalf of all the entities of the group. The question of separate responsibilities could be important in cases where the parent company sees its operations as one economic entity but its policies do not respect human rights. Then the management of a subsidiary in another country would be under a separate responsibility to follow the recommendations of the GP.

To GP 13

The wording should include “may” in the third line: “any adverse human rights impacts they may cause or contribute to”.

To GP 15 – 19 Human Rights Due Diligence

It is very important to establish a system that basically can assist companies in avoiding human rights violations. This proposed system should be able to do that but it is complex to read. The new concept Human Rights Due Diligence (HRDD) is a fusion between four different traditions of thinking: financial due diligence, environment and social impact assessments, risk management, and transparency requirements from traditional public law and company law.

The fusion of the different traditions comes at a cost. Basically, financial due diligences are internally oriented exercises. They seek to identify factors that can influence the value of a company, no matter what the character of the causes is. Impact assessments, on the other hand, are analysis of external effects of an activity or set of activities, like consequences of an establishment on the natural environment. As a starting point, both these types of analysis focus on the effects that can be established at a certain point in time. Risk management differs from this. It is a continuous, cyclical, process through the life of a company or an activity and includes addressing the risks systematically. The complex background and the need to formulate the principles fairly abstract to cover all types of enterprises, make the system somewhat difficult to understand.

The formulation “identify, prevent, mitigate and remediate” of GP 13 which partly structures the HRDD principles has its roots in the risk management tradition. That does not fit fully into the three part “Protect, Respect & Remedy” framework. See further individual comments below.

To GP 15

Some characteristics of the HRDD are covered in GP 15 litra a, b and c in an awkward manner. Litra a and c are directed towards the content of the analysis, while b relates to the continuing aspect of the exercise. Since litra b relates to another aspect than the content, it should not split those two content oriented parts.

Further, the content requirements of the HRDD are not clearly set out. A reformulation in line with what has previously been said by the SRSG would be better. In the 2008 report of the SRSG, the scope of the HRDD is much better stated:

“Companies should consider three sets of factors. The first is the country contexts in which their business activities take place, to highlight any specific human rights challenges they may pose. The second is what human rights impacts their own activities may have within that context – for example in their capacity as producers, service providers, employers, and neighbours. The third is whether they might contribute to abuse through the relationships connected to their activities, such as with business partners, suppliers, State agencies, and other non-State actors.” (A/HRC/8/5 7 April 2008 (57))

This analysis distinguishes between three distinct factors: context, activity and relationship. It is clearly set out, in a way which is easy to communicate to others. The way it has now been phrased in the draft GPs is not so clear. The final GPs should try to use the three part framework of the 2008 report. And it may be that this should be part of GP 16 which covers the initial step of the HRDD; to “identify and assess” the possible impacts of activities instead of GP 15. This is where the three parts analysis is really helpful.

With respect to monitoring a company’s relationship to human rights violations on an “on-going” basis, as is stated in GP 15.b, I agree that that is important. But, very often, or even normally, it will be at certain stages of the activities that an analysis really is called for. This could be when establishment in a new country is planned, or new types of activities are set up, new supplier relationships developed, or a new government is coming into power. These types of situations are in line with what is said in the commentary to GP 16, second paragraph. But they will not occur on an on-going basis. Is it sensible to emphasis more strongly in the wording of the principle, or at least in the commentary to GP 15, that it is in such situations a good HRDD is really needed? To stress the on-going character of HRDDs could turn it more into a routine and a document process, and make it less effective as an exercise to prevent human rights violations? In GP 19, enterprises with “significant human rights risks” are singled out to distinguish between different communication obligations. May be that category should be applied also in other provisions like the one on the on-going character?

To GP 16 – the concept of “stakeholders”

GP 16.b uses the expression “affected groups and other relevant stakeholders”. The expression stakeholder is also used several other places in the principles and the commentaries. In GP 18.b “internal and external stakeholders” are mentioned. This must be a wider group than what is meant in GP 16.b since it includes employees. In GP 19.b it is said “risks such communications pose to stakeholders themselves, to personnel …”. Here, personnel, employees, are excluded from the stakeholder concept. In the commentary to GP 19, last paragraph, it is said “groups or individuals who may be impacted and to other relevant stakeholders, including investors”. Employees and investors “belong” to the company in other ways that other interested persons and groups, and should either be excluded from the concept or it should be clarified better.

The concept of stakeholders is well known for its vague contours. It may be useful to try to avoid it in the formulation of principles, or, to define or clarify the meaning in the commentaries. To apply a word differently within the same set of principles is not recommended.

To GP 17

Issues related to violations in the supply chain are discussed in the fourth paragraph of the commentary. Some considerations which companies may have to take into account, are mentioned. One of them is “how crucial that supplier is to its business”. That could be read to mean that it is acceptable to be supplied by a human rights violating supplier if he is very important to your business. This should be clarified.

To GP 19

This provision on communication contains two very different rules: One with an obligation to reply if asked and one on regular reporting for businesses with significant human rights risks. The provision should be somewhat rewritten to make this clearer. May be the rule on regular reporting should come first?

To GP 20

This provision, called “Remediation”, seems from the content to belong to part IV on Access to remedy. It appears to be placed in part III to fulfill the logic of the risk management structure of GP 13 – “identify, prevent, mitigate and remediate”. Should it be taken out of part III and fitted better into the overall framework?

To GP 21

GP 21 which contains substantial obligations on important issues comes at a surprising place in the GPs. GP 20 is unimportant (where it stands) and GP 22 is not very important, either. GP 21 belongs up front in part III together with GP 12 and 13 (which I want to merge). It should be placed right after them. That would also place the substantial obligations first and leave the main part of part III for the HRDD.