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Freshfields Sustainability

| 4 minutes read

UN Global Forum on Business and Human Rights: day two - the role of policy, investment agreements and private standards in improving outcomes on the ground

Day 2 of this year’s Forum saw calls for a ‘smart mix’ of business and human rights regulation in domestic law, suggestions for investment policy reform, requests for leadership by governments in public procurement policy, criticisms of self-certification on human rights, an overview of the global modern slavery crisis and an update on the proposed UN Treaty on business and human rights.

A ‘smart mix’ of human rights regulation

There were calls on day two of the UN Global Forum on Business and Human Rights for policy coherence in state action to ensure business conduct aligns with international human rights standards.

Dante Pesce of the UN’s Working Group on Business and Human Rights advocated for a ‘smart mix’ of regulation to address the issue, while Asako Okai of the UN Development Programme called for more countries to develop national action plans.

Christine Kaufmann, chair of the OECD Working Party on Responsible Business Conduct, stressed that while there are a number of different standards that seek to address human rights violations in a commercial context (for example the OECD Guidelines for Multinational Enterprises, the International Labour Organization MNE Declaration and the UN Guiding Principles for Business and Human Rights), in practice all of the frameworks are fully aligned and mutually reinforcing.

Participants also acknowledged that policy can only go so far, and greater attention needs to be paid to raising awareness of human rights issues, particularly in business and law schools.

Investment policy ‘must be reformed’ to drive change

International investment policy and practice also has a vital role to play in protecting human rights according to Elisabeth Tuerk of the United Nations Conference on Trade and Development (UNCTAD). She proposed ‘urgent action’ in re-orienting International Investment Agreements (IIAs) towards sustainable development, which by extension would include greater emphasis on protecting human rights. Ms Tuerk suggested that at present, IIA policy development is ‘misaligned’ with similar efforts to address human rights violations, which play only a minor role in investment policy decisions. 

In UNCTAD’s view it is important to fix the IIAs that are currently in place (which number around 3,300 treaties, 2,600 of which are in force), while future agreements should be reformed through a ‘multi-stakeholder’ process that is both transparent and inclusive.

Government procurement should lead the way

Another important lever for change is public procurement, given that governments spend a combined €1tn on goods and services every year.

Pillar 1 of the UN Guiding Principles covers public spending (and the UN’s Sustainable Development Goals call for states to implement sustainable procurement regimes), yet many government frameworks - and even those put in place by international financial institutions such as the World Bank - are not developed with these standards in mind.

According to the UN Guiding Principles (and as confirmed by Christine Kaufmann), public procurement ‘is clearly an aspect of the state duty to protect’, while speakers also questioned governments’ credibility to demand that businesses conduct human rights due diligence when they themselves are transacting with countries where human rights are not respected.  

Are private certification programmes ‘manipulative’?

Genevieve LeBaron of Sheffield University’s Political Economy Research Unit called into question the efficacy of private standard-setting initiatives in improving outcomes on the ground.

Ms LeBaron suggested that certification may not always have an impact on the treatment of workers, and indeed surveys have shown that in many cases employees are not even aware that they are working at a certified facility.

Discussing ways to address the challenge, Charity Ryerson, co-founder and legal director of the Corporate Accountability Lab, pointed out that every major multinational has codes of conduct in place with its suppliers, which could be adapted to name stakeholders and workers as ‘third-party beneficiaries’.

Modern slavery ‘one of top three crimes globally’

Tackling modern slavery is one of the biggest challenges in the field of business and human rights. Just how big was laid bare on day 2, with the Forum hearing that modern slavery is a ‘$115bn-a-year business that belongs in the top three crimes globally’.

Legislation such as the UK Modern Slavery Act and its Australian equivalent were praised for helping raise awareness, but Emma Crates from the Office of the UK Independent Anti-Slavery Commissioner said it was still hard to hold companies to account. She suggested that some industries are particularly nervous about what they disclose, and modern slavery statements are too often skewed towards policy rather than risk.

While many modern slavery laws focus on disclosure, some take a different approach. Brazil for example publishes an annual ‘dirty list’ of companies that engage in modern slavery, and has rescued more than a million people from the trade so far. However in recent times progress has stalled amid political attacks on labour inspections.

For speakers such as Fiona Reynolds, CEO of the UN-supported Principles for Responsible Investment, ‘celebrating’ companies that perform well is more effective than naming and shaming those that don’t. James Cockayne, director of the United Nations University Centre for Policy Research, also said that modern slavery was a ‘market failure’ that requires engagement from the finance sector to drive systematic change.

He held up Australia’s modern slavery legislation for praise given that it covers the financial sector, and also highlighted the Liechtenstein Initiative for a Financial Sector Commission on Modern Slavery and Human Trafficking, a public-private partnership between the governments of Liechtenstein, Australia and the Netherlands, and private sector entities in the principality.

Much work to be done on UN treaty

Progress is being made towards the UN’s legally binding instrument on business and human rights. A revised draft was published in July this year, and the Forum heard yesterday that this has received wider recognition as a basis for further negotiations than its predecessor, the zero draft from July 2018.

The fifth session of the open-ended Working Group of the Human Rights Council (OEIGWG) was staged in October, where substantial comments and proposals were presented.

Participants heard that there was no contradiction in supporting a binding treaty alongside the Guiding Principles, which together would be mutually reinforcing. However, there is still a lot of work to do before a treaty can be adopted, with stakeholders invited to submit their comments on the amended draft before the end of February 2020.

Stat of the day

$115bn – the amount of money generated by the crime of modern slavery each year

Quote of the day 

‘Attention is focused very much on the business part of “business and human rights”, but we should not forget the important role of the state’

Guy Ryder, Director-General of the International Labour Organization


human rights