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Three questions about business and human rights

Human rights are important, but implementation raises plenty of challenges.

(Photo: tea rose/Wikimedia)

I spent the last two days at a workshop on the human rights responsibilities of business, being held at Duke University’s Kenan Institute for Ethics.

It was a wide-ranging discussion, involving representatives from academia, NGOs, and industry. The discussion was focused on the “Guiding Principles on Business and Human Rights,” developed by UN Special Representative John Ruggie. The Guiding Principles are rooted in a “Protect, Respect and Remedy” framework, which says that governments have obligations actively to protect human rights, that businesses have an obligation at least to respect human rights, and that all individuals ought to have access to remedies when their rights have been violated. The hard part, of course, is putting that framework into action, a task that has fallen to a Working Group recently established by the UN, two members of which were at the Duke workshop in an unofficial capacity.

Here are three questions—food for thought, really—related to the implementation of a human rights regime intended to apply to transnational corporations. There’s nothing special about this short list of questions (many more arose over the two-day discussion here at Duke), but it’s a starting point if you’re new to the topic.

1. How do human rights fit into the range of other issues related to “business doing the right thing”? This is both a conceptual question and a question about the practicalities of implementation, especially for companies already engaged in measuring, tracking, comparing, and training for performance in terms of CSR, sustainability, compliance, good governance, etc. Are there performance metrics typically understood as part of CSR reporting, for example, that could be repurposed as human rights measures?

2. How large does a company have to be in order to have “serious” human rights obligations? Obviously, all companies should respect human rights. But demonstrating respect can be done in a variety of ways. Big companies are increasingly expected to do much more than stay out of trouble: they’re expected to evaluate the risks their operations pose to human rights, and sometimes to report on such evaluations. The Coca Colas and Walmarts of the world have the resources to do this. But companies are enormously variable in size and capacity, from the sole proprietor through the SME all the way up to Walmart, ExxonMobil, and Toyota. Smaller companies may have neither the financial resources nor the know-how to implement rigorous human-rights monitoring and policy-making. Guiding Principle #15 says that “In order to meet their responsibility to respect human rights, business enterprises should have in place policies and processes appropriate to their size and circumstances….” But the word “appropriate” leaves a lot to be figured out.

3. Who will pay for increased monitoring, reporting, and policy-making within particular supply chains? Note that this is only loosely related to the question of who should pay. When a new set of costs are imposed on a value chain, which participant in that value chain foots the bill is an empirical question, but (as economists Tyler Cowen and Alex Tabarrok point out) the answer is likely to be determined in part by the relative (in)elasticity of supply of, and demand for, that particular product or service. Roughly speaking, a powerful retailer is likely to be able to force a less-powerful manufacturer to suck up the costs of making sure there are no downstream human-rights risks. This may bring about unanticipated consequences, including unintended reductions in the well-being of average workers. That’s not to say that such reductions in well-being wouldn’t be justified (after all, we’re trying to protect human rights here). But it is to say that such risks ought to be considered.

No one questions very seriously the significance of human rights. But rights aren’t the only ethically-important constraint on business behaviour, and that raises problems. By their very nature, rights tend to resist efforts to achieve balance: they tend to be understood as absolutes, lines beyond which we must not step. That gives rights-based arguments a lot of potency. But it also means that businesses face serious challenges in doing the socially-responsible thing, namely balancing the pursuit and protection of human rights with other, arguably equally important moral obligations.